On the heels of its acquisition of a British personalized health company earlier this month, Hims & Hers has snapped up direct-to-consumer dermatology startup Apostrophe.
The deal will accelerate the company's scale in dermatology and fulfillment capabilities with a fully owned pharmacy, Hims & Hers executives said in a press release. Financial details of the transaction will not be disclosed at this time.
Launched seven years ago, Apostrophe makes it easier for consumers to get Rx acne medications and treatments by connecting users with board-certified dermatologists. The company has a vertically integrated mail-order pharmacy, which is currently licensed to fulfill orders in 29 states.
This compounding infrastructure, combined with best-in-class dermatology capabilities, will expand Hims & Hers’ ability to provide consumers with some of the most advanced and personalized dermatology treatments faster and at scale, Hims & Hers executives said.
"Treatments for comprehensive dermatology-related conditions have always been important to us since the inception of Hims & Hers," Andrew Dudum, CEO and co-founder of Hims & Hers, told Fierce Healthcare.
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"Being able to build on this strong arm of our organization with Apostrophe is an incredible growth opportunity for Hims & Hers, and we believe that Apostrophe is extremely well-positioned to help us succeed, especially with the younger generation. Apostrophe’s dermatology capabilities and compounding infrastructure are some of the most advanced in the market, enabling highly personalized offerings for consumers," he said.
In the seven years since its founding, Apostrophe has built a brand that has attracted and heavily engaged Gen Z and millennial consumers, Dudum added.
The addition of Apostrophe and its infrastructure will enable Hims & Hers to scale direct-to-consumer, personalized dermatology solutions more quickly, he said, adding that it's a market with enormous potential.
"We believe we’re still in the infancy stages when it comes to the potential related to consumer-first dermatology. This is a massive industry from both a prescription and nonprescription perspective—about an estimated $44 billion market size—and we’re excited about the first-class expertise that the Apostrophe team will bring to Hims & Hers, which will help us to expand this part of our business," Dudum said.
Hims & Hers, which combines telehealth and medication delivery, started with four products and then added a women’s health business, called Hers, which focuses on birth control, sexual health and skin and hair care products.
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The fast-growing company's ambitions go far beyond e-commerce and extend into healthcare. It expanded its telehealth services last year to offer access to primary care and also rolled out online mental health services.
Hims & Hers provides access to medical care and treatment for more than a dozen conditions with more than 50 products. It has scaled its business quickly: It conducted more than 2 million telehealth consultations in 2020.
In January, Hims & Hers went public in a blank check deal that valued the company at about $1.6 billion.
Earlier this month, Hims & Hers scooped up personalized health company Honest Health to expand the company's U.K. footprint. Honest Health offers consumers hair loss-related products and has an exclusive relationship set up with a U.K. compounding pharmacy and fulfillment center. The deal lays the foundation for future expansion into U.K. and Europe, company executives said.
The company's first-quarter 2021 revenue grow 74% to $52 million.
The entire Apostrophe leadership and team is expected to join Hims & Hers to help run the company’s growing dermatology business line. Apostrophe CEO and co-founder Ben Holber will become CEO of the Hims & Hers dermatology business line, reporting directly to Hims & Hers Chief Operating Officer Melissa Baird.
The Apostrophe deal is expected to close during the third fiscal quarter of this year.