Hims, Inc Is Going Public
The company, which operates both men’s and women’s health brands and is sometimes called Hims & Hers, is merging with a special purpose acquisition company (SPAC) sponsored by investment management firm Oaktree Capital Management. It will be valued at $1.6 billion. The transaction will deliver up to $280 million in cash. Once the transaction is completed, the company will be traded on NYSE under the symbol “HIMS.” It is expected to close by the end of 2020.
“We’ve taken a roadmap that was two to three years long and compressed it into a few months,” said CEO Andrew Dudum. “We’ve launched a primary care division, at home Covid-19 saliva test and a mental health platform, which were all things we wanted to do.”
Hims is fairly unique as it does not take insurance. Instead consumers pay directly for a variety of health-related products and services, including birth control, acne treatments, and supplements mostly sold on a monthly subscription basis. (90% of its revenue is recurring).
Hims also offers a primary care product for people with ailments like sore throat, congestion and pink eye to talk to a health provider online, which is available for a flat fee of $39 per visit.
In the wake of the pandemic, Dudum said, the company has seen continued growth. However he made sure to highlight that the company has driven 100% annual revenue growth over the past two years, with gross margins of over 70%. As of June of this year, the company said it had 260,000 paid subscribers. The company is expected to be profitable soon.
“For a long time, a lot of investors thought that it was impossible to go direct-to-the consumer route,” said Dudum. “But we’re seeing a lot of trends that are driving people to companies like ours.”
Hims is backed by a variety of venture capital funds, including Founders Fund, DCM Ventures and 8VC. It also raised a private equity round from the Canadian Pension Plan Investment Board. The company has pulled in more than $150 million in funding.