On June 24, newly public Hims & Hers Health, Inc. acquired teledermatology platform Apostrophe for an undisclosed sum.
Apostrophe originally launched in 2012 as YoDerm, a platform for matching patients with dermatologists, before rebranding and pivoting its business model to Apostrophe telemedicine in July 2019. The acquisition shortly follows Hims’ other acquisition of London-based Honest Health on June 14, which creates and sells hair loss-related products. Hims and its sister brand Hers already offer teledermatology services like prescription tretinoin and clindamycin for acne and anti-aging purposes. Apostrophe offers those topicals, as well as prescription-strength hydroquinone, oral spironolactone and oral antibiotics. Andrew Dudum, Hims CEO, said Apostrophe’s strength compared to Hims’ is in its diagnosing and the formulation of its prescriptions and routines through its pharmacy network.
“[Hims’ interest in Apostrophe] wasn’t really the telemedicine component, as that is an infrastructure both companies share and already built. It’s much more on the verticalization of the development, the fulfillment and the compounding of the physical products,” said Dudum.
Apostrophe has doubled its revenue and patient base every quarter, according to previous Glossy reporting. Between the first and second quarters of 2020, Apostrophe reported a 145% growth in revenue. It raised a $6 million seed round in Dec. 2019. Ben Holber, Apostrophe CEO, declined to share more recent revenue or subscriber figures. As one of the first teledermatology companies to exit, Apostrophe’s acquisition foreshadows what could be possible for other brands like Curology, Musely RX and Agency, which was founded in April by Curology co-founder Dr. David Lortscher.
Meanwhile, Hims debuted publicly via a SPAC in Oct. 2020. During the company’s first-quarter 2021 earnings in May, it reported that it had 391,000 subscribers across its business at the end of the first quarter of 2021, a 79% growth year-over-year. First-quarter 2021 revenue was $52.3 million, a 74% year-over-year growth. However, the earnings before interest, taxes, depreciation and amortization were negative $8.6 million, an increase from negative $4.6 year-over-year.
“Before DTC telemedicine, there was a clear distinction between skin care and dermatology. Skin care was in the drugstore aisle, and dermatology was in the doctor’s office,” said Holber. “Today’s skin-care consumer is also a teledermatology patient, and they have high expectations of both experiences. These blurred lines will continue to blur until there’s almost complete overlap between the two: skin care and dermatology.”
For now, Hims & Hers and Apostrophe will operate as separate companies and brands, said Dudum. Dudum said he does see the potential for Apostrophe to join Hims in its over-the-counter brick-and-mortar opportunities. In April 2020, Hims began distributing OTC products to 1,800 Target doors. He indicated that Hims is open to other acquisitions, though was mum about specifics. He said the team meets with “10-20 opportunities a month” and will move quickly to acquire when it makes sense.
“Both [Hims and Apostrophe] believe that dermatology is one of the largest growth opportunities in telemedicine and that we’re in the early innings of a paradigm shift to the consumerization of digital health,” said Holber.
