Ukrainian Artem Petakov and Saeju Jeong have been creating an application for healthy lifestyle Noom for eight years. And today it makes over $200 million a year.
In total, Noom has raised $114.7 million in investments. The investors of the project include Sequoia Capital, Samsung Ventures, Aglaé Ventures, etc.
Forbes told the story of the startup, and AIN.UA chose highlights.
Inception
Ukrainian-born Artem Petakov graduated from Princeton University, where he studied psychology and computer science. Then he worked at Microsoft, and later – at Google.
In 2008, he and Saeju Jeong came up with an idea to create an application that would “disrupt the weight loss industry.” It took 8 years to develop it: they founded the company in 2008, and Noom was launched only in 2016. Over the past few years, they have been trying to keep up with the demand for the product and release new versions based on user data.
In 4 years, Noom has more than 50 million downloads, and its revenue for the last year increased four times – to $237 million compared to $61 million in 2018. In 2017, the app earned only $12 million.
Not another weight loss application
The market for digital weight-loss tools is saturated—last year the U.S. market was worth $1.4 billion and is expected to grow.
In the App Store, there are over 200 weight loss applications, including Under Armour’s MyFitnessPal, popular Fitbit and Calm, which offer both physical and mental activities.
These apps are cheaper on a monthly subscription than Noom, which ranks 23rd among health apps in the Apple Store, and its rating in Google Play is 3.9.
According to Petakov, Noom is more like meditation apps such as Headspace or Calm than Weight Watchers for weight control. Noom does not count calories and does not tell the user what to eat and what not to eat. Instead, the app tries to learn the user’s habits, find out what is at the root of their addictions, and help to cope with them.
Subscription fee
Users can buy a subscription to Noom for a period from one month to one year. The trial version is for 14 days and costs from $1 to $18. The average monthly price of a subscription is higher or lower, based on the duration of the program a user selects.
But the company says a four-month package at $129 is most popular, thus a month of use of the service will cost $32.25.
The second-most-popular package is a six-month program at $149 (or $24.83 a month). Shorter plans of one month and two months are $59 and $99, respectively.
How does Noom work?
Noom uses artificial intelligence, evidence-based guidelines of physiology, psychology, and cognitive-behavioral therapy.
“Because we’re changing the brain, our outcomes are durable, 60% of users one year after being on Noom are still maintaining their weight loss,” Petakov says.
During the four-month program, the average weight loss for people who complete it is 7.5% of their body weight.
Noom users fill in questionnaires and establish goals such as loss of weight or centimeters in the waist. The questions are quite specific and range from a family history of diseases like diabetes or heart disease to what time of day a user tends to eat.
Noom’s coaches help users to achieve their goals, and they can communicate using a messaging feature of the app. Users can also track weight, blood pressure and blood sugar levels, and compile nutrition and exercise history. There is also a food database that includes 3.7 million items.
The team
In late 2019, Noom hired 1,000 coaches to deal with the “holiday rush” when people start taking active care of their health and body. As a result, the number of employees has grown to 1,800.
Noom says that more than 90% of employees are full time and have benefits. The head office is in New York.
Around 100 people of all employees aren’t coaches.
