Noom Inc. hired its first finance chief to build out its planning and forecasting capabilities as the health-app maker looks to sign up more paying subscribers.
New York City-based Noom recruited Michael Noonan—formerly a senior vice president of finance at
Booking Holdings Inc.
—as chief financial officer. Chief Operating Officer Adam Fawer, who previously handled CFO duties, will return to focusing on operations, Noom Chief Executive Saeju Jeong said. Mr. Noonan joined the company earlier this month.
Noom, which offers customized health plans via its smartphone app and uses machine learning to help users with weight loss and exercise, hopes to take advantage of accelerated demand for digital health and exercise options.
Cooped up at home, many consumers in recent months have tried out new formats such as yoga classes via Zoom or programs developed by fitness and weight-loss apps. “We have seen health-based businesses doing really well,” said Stephanie Wissink, a senior research analyst covering consumer products at Jefferies Group LLC, an investment bank.
Privately owned Noom has millions of users across the U.S., its biggest market, Europe and Japan, Mr. Noonan said. Typically, it offers new customers a 14-day trial period, after which consumers choose a subscription plan for a duration of up to one year. Noom’s most expensive offering is a one-month membership, which costs $59, Mr. Noonan said. The company also offers cheaper plans.
It doesn’t disclose how many people become subscribers after the trial period is over, or the average amount that users pay per month. “We are trying to keep a lot of this close to our vest,” Mr. Noonan said.
The company last year generated about $200 million in revenue, but doesn’t plan to release this information for 2020. Noom delivered positive cash flow and earnings before interest, tax, depreciation and amortization this year, Mr. Noonan said. It currently employs about 2,600 people, Mr. Jeong said.
The company is looking to grow the number of paying subscribers while also exploring potential collaborations with employer-sponsored health-care plans, which could bundle Noom’s services into their benefit packages. Some competitors have struck these types of partnerships already, allowing them to scale their businesses faster than through sales to individual consumers, said David Grossman, a managing director at Stifel Financial Corp., an investment bank.
“There are real advantages for us moving that way,” Noom’s Mr. Noonan said about potential partnerships, adding that at the moment, the bulk of the company’s revenue comes from subscriptions from individuals. It last year agreed to a collaboration with
A/S, the Danish insulin maker, to develop digital health solutions.
Noom has raised a total of $115 million from investors, including $58 million in a Series E round last year led by Sequoia Capital. There is no plan for an initial public offering at the moment, but the company’s leaders are thinking about it, Mr. Noonan said. Noom currently doesn’t have additional financing needs, he said.
Mr. Noonan said he plans to work on improving internal controls and processes as well as Noom’s planning and forecasting. The company’s finance team, currently consisting of seven people, is expected to expand in the coming months, he said.
Write to Nina Trentmann at [email protected]
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