Remote healthcare firm Hims Inc. is getting close to an arrangement to go public via a merger with special purpose acquisition company (SPAC) Oaktree Acquisition Corp., Bloomberg reported, citing unnamed sources, at a time when the SPAC model has become more popular.
The arrangement could bring a valuation of approximately $1.6 billion for Hims, according to unnamed sources in the report, who noted that Oaktree is in discussions with investors to bring in approximately $75 million to assist in providing backing for the deal. The intentions aren’t set in stone and could not come to fruition.
As it stands, Hims has notched $197 million from investors such as Forerunner Ventures and Institutional Venture Partners, among others. The company was worth approximately $1.1 billion last year per PitchBook and was started in 2017.
It is known for providing prescriptions for the treatment of conditions for which people could be reticent to go to a provider offline, such as hair loss. Clients undergo a virtual session with a physical and then get a prescription in the mail.
The firm also has grown into mental-health and urgent care offerings as the demand for remote healthcare spikes amid the coronavirus. In addition, Hims Inc. has a business called Hers for women.
As stock market indices in the United States attain new highs, SPACs are gaining momentum. They are development-stage shell firms that don’t possess their own business plans but they merge with private firms that do have them.
Getting American patients to use telehealth offerings was a challenge in a world before the coronavirus: JD Power determined that just 10 percent of consumers utilized telehealth last year.
Once COVID-19 occurred, however, doctor’s offices closed and patients, as well as providers, suddenly viewed telehealth in a new light.
Virtual visits spiked 4,345 percent for non-urgent care from March 2 to April 14 and increased 683 percent for urgent care per a recent study of NYU Langone patient visits.