Online health and wellness company Hims & Hers raised $1 billion through convertible senior notes to grow its international business and invest in artificial intelligence capabilities.
Andrew Dudum, founder and CEO of Hims & Hers, announced the raise on LinkedIn this week. He noted that it was the company’s “largest raise yet,” and “more than double” what the company set out for, “thanks to strong demand from a wide range of leading investors.”
“The offering was designed to accelerate long-term value creation and minimize shareholder dilution. More than just a raise, it’s a clear signal that people believe in what we’re building: a global healthcare platform that’s easy to use, affordable, and built around the individual,” Dudum wrote.
The company plans to use the funds to grow internationally, expand personalized care at scale, and invest in AI and data, Dudum said.
Hims & Hers is eyeing global expansion through both organic growth and strategic acquisitions, the company said in a press release. “Hims & Hers has no definitive agreements for any material acquisitions at this time. The funds will also support the technology team, led by newly appointed CTO Mo Elshenawy, to expand the company’s data pipeline, develop AI tools, and advance personalized treatments to enhance the consumer healthcare experience,” the company said.
The financing comprised of an initial $870 million in convertible senior notes, and the purchasers exercised an option to buy an additional $130 million in notes on Tuesday, according to a filing (PDF) with the U.S. Securities and Exchange Commission.
The company issued a total of $1 billion in notes, which will mature on May 15, 2030, unless earlier repurchased, redeemed or converted.
Hims launched November 2017 as a men’s wellness brand offering skincare, hair-loss products and erectile dysfunction medication. It then added a women’s health business, called Hers, focused on birth control, sexual health, and skin and hair care products.
The company went public in January 2021 through a merger with a special purpose acquisition company (SPAC) in a blank check deal that valued that valued the company at $1.6 billion.
Now a multispecialty telehealth platform, Hims & Hers connects consumers to medical care for numerous conditions related to mental health, sexual health, dermatology and primary care. The company expanded into weight loss in late 2023 with oral medication kits and added compounded GLP-1 medications to its offerings last May.
The company has seen strong growth with first-quarter revenue doubling year-over-year to reach $586 million.
Its quarterly profit soared to $50 million, up 4x compared to a profit of $11 million a year prior. The company’s total subscribers increased 38% annually to 2.4 million during the quarter.
The company’s stock spiked Tuesday after Dudum’s announcement, closing at $64 per share, up from its open price of $56 per share. Hims & Hers stock closed Friday at $64 per share.
Shares of Hims & Hers and LifeMD both skyrocketed following the news.
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