Consumer wellness and telehealth company Hims could be the next to throw its hat into the public markets.
According to a report from Reuters, the startup is weighing a potential sale to an unnamed special purpose acquisition company (SPAC) – a "blank-check company" that uses the proceeds of an IPO to acquire or merge another business.
The deal would value Hims at over $1 billion, Reuters' sources said, although the telehealth brand is also considering other deal options. Hims declined to comment on the news to MobiHealthNews.
News of the plans comes as the company announced another expansion to its virtual mental health offerings. In addition to the free group sessions launched in the spring, the Hims and Hers brands are offering one-on-one sessions with licensed providers for treatment of anxiety and depression.
The individual counseling is rolling out first in New York and California, the company said, with expansions to other parts of the U.S. planned for later in the year.
And to support it, Hims has picked up Julian Cohen, previously the cofounder of Breakthrough Behavioral (which was acquired by MDLive) and a behavioral health division lead at Teladoc. He will be stepping into the new role at Hims as SVP of behavioral health.
“Hims & Hers was founded to break down the barriers to accessing care and eliminate stigma, both critically important efforts if we want to improve mental healthcare in this country,” Cohen said in a statement. “I’m thrilled to be joining the company to continue to build out its mental health category of care, and help Hims & Hers address the increasing need for mental health providers and treatments.”
WHY IT MATTERS
Just past the midway point of the year, 2020's public markets have been good to digital health companies. New IPOs from names like One Medical and Accolade have each performed well, while others like Teladoc Health and Livongo have seen their share prices skyrocket as a result of COVID-19.
These performances; recent word that AmWell, another telemedicine giant, is also looking to go public; and Hims' newly revealed plans all suggest a level of confidence that was absent during the digital health industry's roughly three-year IPO lull.
The mental health expansion, meanwhile, brings another option to consumer-friendly behavioral healthcare. With initial consultations set at $59 and a key strategic hire, it looks like the company is serious about slicing itself a piece of the behavioral telehealth pie.
THE LARGER TREND
While new digital behavioral health offerings enter the market at a fairly steady clip, the COVID-19 emergency and broad calls for more mental health options appear to have driven new support for virtual behavioral health services. Mindfulness app makers Headspace and Big Health both saw solid fundraises within the last few months, while Omada and others began offering mental health components of their platforms for free during the COVID-19 emergency.
There is also some evidence from market observers that increased utilization of these services doesn't represent an unusual spike, but the continuation of a steady upward trend.