Feb. 3, 2022
As reported here and in many other publications, Noom's rapid growth as a weight loss program is well known. The company may plan an IPO this year, and it's estimated that revenues topped $600 million last year. The company has raised $669 million to date. However, there may be some weak spots.
Businesshala reported that Noam’s key differentiator—applying psychology to achieving long-term weight loss—has recently backfired. Noom was trending on Twitter last week as current and former users criticized its focus on calorie restriction and daily weight checks. He said it appeared to be encouraging behavior like an eating disorder. A significant tweet garnered over 130,000 likes in just two days.
The technology sector has come under increasing scrutiny for the way its products can potentially cause harm. Businesshala last year published internal research from meta platforms showing how Instagram could promote dieting and fixation on weight by increasing eating disorders in some young users. Another December Journal report showed how TikTok’s algorithm was flooding teens with eating disorder videos. These reports and others have prompted regulators to take a harder look at Instagram and other apps used by this demographic.
The company is taking an aggressive and potentially controversial approach to new customer acquisition. Some recipients of Noom ads say they have been bombarded. Others say they are targeted when they do not have friends. Until last week, someone could sign up for a trial of Noam’s weight program for just 50 cents. That offer was followed up with an email offering a free trial.
We at DietBusinessWatch (powered by Marketdata LLC, the author of many weight loss market research reports), have often noted these deep discount offers at Noom (typically 80% off the regular rate). There is no doubt that Noom has taken market share away from competitors such as WW, with their laser focus on end-user groups like Millennials. However, Noom has probably collected all the "low hanging fruit", and growth from here forward may not be as easy.