The Centers for Disease Control and Prevention currently estimates that more than 42% of U.S. adults are obese. While some argue that weight is not a direct indicator of health, the risks associated with obesity are serious. Obese adults are up to 80 times more likely to get diabetes than individuals in what's considered healthy weight ranges. Adults with obesity also pay an average of $1,429 more per year in out-of-pocket healthcare expenses.
Companies and government agencies alike are trying to find innovative solutions to combat the obesity crisis and help Americans lose weight. There's been no shortage of popular diet and weight-loss regimens over the years, from Atkins and the South Beach Diet to more recently, keto and Mediterranean diets. But one health start-up that's rapidly gaining traction in the weight loss field is Noom.
What is Noom?
Founded in 2008 by two engineers, Saeju Jeong and Artem Petakov, Noom is a personalized health coaching company with its own app. The company aims to help reinforce positive decision-making to improve the lives and health of its users. The app helps users lose weight, get fit, and stay healthy using an 100% virtual platform. After the user answers a few questions, Noom's algorithm formulates a weight loss plan and pairs them with a coach who provides dietary information, support, and guidance.
Noom offers a unique classification system for different types of foods using a "traffic light" analogy: red, yellow, and green. The app sorts foods based on their calories per unit volume (caloric density). Low-calorie foods like fruits and vegetables are in the green category, lean meats and seafood are yellow, and various snacks, treats, and sweetened beverages are classified as red. Noom recommends a daily caloric budget of eating 30% green foods, 45% yellow, and 25% red.
Users can get a custom caloric budget to formulate a weekly menu. Meanwhile, the app hosts group health coaching sessions to motivate users and reinforce their commitment to weight loss. Without oversight, losing weight can be extraordinarily difficult. In fact, approximately 79% of people who lose weight gain it back after five years.
Does Noom work?
In a study involving 35,921 users, 78% of participants reported a reduction in body weight after nine months. Of those, 23% reported losing at least 10% of their body weight. Additionally, in a diabetes prevention program, 64% of participants with diabetes who used Noom reported at least a 5% reduction in body weight after just 16 to 24 weeks.
While Noom has not been evaluated against other weight loss programs such as those developed by WW International (formerly Weight Watchers) (NASDAQ:WW) and Tivity Health (NASDAQ:TVTY), which owns Nutrisystem, the results are certainly promising. Noom has more than 50 million users and is actively growing its member base year after year.
Is Noom worth the cost?
Users can subscribe to the Noom app for either $59 per month on a month-to-month plan or pay $199 upfront ($16.58 per month) for an annual subscription. However, there are discounts available for first-time users. It's not cheap, especially for a program that doesn't include meals, exercise classes, or any in-person support.
To get the full picture, however, it is also important to look at how much patients are getting for what they pay. If the weight loss program yields significant results, users could save as much as $1,400 per year on obesity-related healthcare expenses. In addition, there's the benefits of improving the quality of life and increased longevity. Noom represents an accessible, promising, and mobile option for weight loss and health maintenance. It's an even better proposition if the cost of Noom is covered by a user's company's health and wellness program.
The future of Noom
Currently, Noom is at the last stages of venture capital funding, with more than $114.7 million in capital raised since inception. In fact, the company may be planning to launch its IPO as early as this year. Alternatively, there may be certain public companies interested in acquiring Noom to benefit from its hypergrowth and access to so many users. Either way, investors should definitely keep this innovative healthcare start-up on their watchlist.