Dive Brief:

• Noom Inc., a New York-based health and weight management app powered by machine learning, on Monday hired Michael Noonan, former senior vice president of finance and head of investor relations at Bookings Holdings, as its first CFO. 

• Noom tapped Noonan to help build out its planning and forecasting capabilities as it works to grow its paying subscriber base, it said.

• COO Adam Fawer, who previously handled CFO duties, will return to focusing on operations, Noom CEO Saeju Jeong told the Wall Street Journal. Also on Monday, Noom named Paul, Weiss, Rifkind, Wharton & Garrison litigator Michal Rosenn its first general counsel and Emma Frane its vice president of communications.

Dive Insight:

Noom, which uses machine learning to offer customized health plans on its app, hopes to take advantage of accelerated demand for digital health and exercise options. 

"We're in the beginning phases of the consumerization of healthcare, which is an interesting and powerful trend," Noonan told CFO Dive. "You're seeing it in lots of public companies coming out. Whether it's Livongo, or Teladoc, or Clover Health or GoodRx, all these are really putting the consumer at the center of healthcare." 

Noom, he said, is "absolutely at epicenter" of the trend, as it helps people with their health on a consumer basis. 

"Getting weight management right, and getting to scale, will lead us to other opportunities in the company," he said. "That could be international expansion, there's a global market for us. We can also bridge to other verticals, like diabetes or hypertension management."

The privately owned company employs 2,600 people and has several million users in the U.S., Europe and Japan, according to the Journal. The app offers a free two-week trial, after which customers can select a subscription plan, the most expensive of which costs $59. 

The company doesn't disclose how many people subscribe after the trial period, or the average amount users pay each month. "We are trying to keep a lot of this close to our vest," Noonan said.

In 2021, Noom aims to grow its paying subscriber base and explore collaborations with employer-sponsored health-care plans, which could bundle its services into their benefit packages, the Journal reported. 

As inaugural CFO, Noonan aims to improve internal controls and processes, as well as planning and forecasting abilities. He also expects the company's finance team, currently consisting of seven people, to expand in 2021.

The Wall Street veteran spent nearly 20 years in banking before stepping in at Bookings Holdings in 2016, a balance that has given him both capital and operational experience, he believes.

At Bookings, he ran forecasting, guidance and financial planning & analysis, among other roles. Noom's operating philosophy moved Noonan to make the leap. 

"Bookings was very data-driven, very disciplined on marketing ROI, and let data lead the way on big decisions," he said. "I saw the same thing at Noom: a disciplined management team."

The company has raised $115 million from investors, including $58 million in a Series E round last year, the Journal reported, adding it generated a revenue of about $200 million in 2019. The company doesn't plan to release its 2020 numbers, though Noonan told CFO Dive it delivered positive cash flow and EBITDA this year, and does not need additional cash to operate. 

"We continue to evaluate an IPO," Noonan said. "We have made no decisions about that, [but] we're on the precipice of growing into a more mature, significant company. With that, we need to bring our finance team more into the limelight."

To Noonan, that means thinking of planning, budgeting and forecasting differently, as Noom is no longer a high-growth start-up but a full-fledged business. 

"We have to think about it in terms of controls and processes as we get bigger," he said. "Make sure what we're doing to create revenue and serve the customer is repeatable and controllable. I think that's a very important piece."

Additionally, before going public, Noonan says the company needs greater predictability when it comes to forecasting. "Not just a multi-year plan, but working closely with the operational side, how we forecast and plan our business on a month-to-month basis." 

Noonan foresees building "lots of finance muscle" as the company continues expanding. "The finance team here already is great, and I'm lucky to have so many tremendously talented people, but we're understaffed," he said. "I know what it's like to work at a public company, under scrutiny. I'm not saying we'll definitely do that, but as our company gets bigger, we'll have to operate in that mode regardless." 

"In terms of finance, the tough decisions are around scaling, hiring, and getting the right people on board," he said. "The biggest challenge is not just getting people, but getting the right people that can embody the culture and embody what you're trying to do. If you shortchange that very key hiring process, it'll come back to bite you later. We need so many people, but we're being very careful and circumspect."

Headline has been updated to clarify Noom's mandate.