In exciting news for the Startup Monterey community, 2012 Startup Challenge Venture Division winner Apostrophe (formerly YoDerm) announced its acquisition by major telehealth platform Hims & Hers on Thursday, June 24. Apostrophe’s entire team will join the company, with CEO and co-founder Ben Holber assuming the role of CEO of the Hims & Hers dermatology business line. The deal is expected to close in the third fiscal quarter of 2021.
Holber views the move as a huge opportunity for Apostrophe. “The whole team is moving over and we are still going to be growing the Apostrophe brand,” he said. “I am excited to get resources from such a high-performing team. There are some potential benefits for our pharmacy to do fulfillment for Hims, and for their pharmacy to do some for us.”
Apostrophe will expand Hims & Hers’ dermatology capabilities and provide a fully owned compounding pharmacy, deepening the acquiring company’s commitment to providing accessible healthcare online. Hims & Hers is a telehealth platform that connects consumers to a variety of licensed healthcare professionals in numerous areas, including primary care, dermatology, sexual health, mental health, among others. The company, which also sells health and wellness products, offers services throughout the United States.
Apostrophe is the brainchild of Ben Holber and Ryan Hambley, who launched YoDerm through Startup Challenge Monterey Bay, with the goal of democratizing dermatology.
Holber and Hambley had been working on the idea of Yoderm/Apostrophe for a few months before hearing about the Startup Challenge. “We had the idea a few months before and had gone to speak with someone at a web development studio in the area, and he told us about the competition,” he said. “The deadline was that afternoon, so we applied. We made it to the final round and ultimately we were fortunate enough to win.”
According to Holber, winning Startup Challenge helped make his and his partner’s dreams a reality. “It was hugely helpful to get the funding to start. Once we had the 20K prize and credibility, it allowed us to have more conversations to find partners with regards to development.”
Originally based in Monterey, YoDerm connected patients with licensed dermatologists who diagnosed conditions through photos and prescribed medications to be picked up at local pharmacies. Rather than wait months for in-person appointments, YoDerm offered a more accessible alternative to traditional office visits.
The founders soon recognized a major road bump in the process— while YoDerm helped patients receive diagnosis, they continued to struggle with prescription fulfillment and pickup due to geography and availability. In a brilliant pivot, the company rebranded as Apostrophe and created its own compounding pharmacy that currently delivers custom formulas directly to patients across 29 states.
The company further demonstrated its commitment to health care accessibility last year. During the early days of the COVID pandemic, Apostrophe responded to the hand sanitizer shortage by shifting all operations to sell hand sanitizer at near production costs, donating all proceeds to the WHO COVID-19 Response Fund.
Since the rebrand in July 2019, Apostrophe has doubled revenue and patients each quarter, raised $6 million in seed funding, and reported a 145% growth in revenue between the first and second quarter of 2020.
Brooks McChesney, Advisory Council Member at CSUMB’s Institute for Innovations & Economic Development (iiED), was Apostrophe’s first outside business coach post-Startup Challenge. For McChesney, the acquisition is the perfect example of what Startup Challenge Monterey Bay can do for the local business and entrepreneur community.
“It’s the demonstration of a successful formula to have a home run,” he said. “The experience with Yoderm shows this is possible. We were all excited to see how Apostrophe grew from an idea by two energetic young founders, to the company it is today,” he said. “Their customer satisfaction levels are outstanding, higher than any other startup I have worked with.”
McChesney also attributes Apostrophe’ success to the opportunity they created for dermatologists. “It’s a great app for dermatologists to reach new markets. Apostrophe simplifies treatment for patients and providers by offering treatments for conditions that do not require office visits and can be diagnosed by simply uploading a photo to the app on a smartphone. Practitioners can do it from home, on the weekend, on top of whatever else they are doing.”
The iiED Executive Director Brad Barbeau is delighted with the news. “Apostrophe – Yoderm, when they won the Startup Challenge in 2012 – is a fabulous example of what energy and passion can create,” he said. “Ben and Ryan were brand-new college graduates when they decided to start Yoderm together. They got some great advisors, lived on peanut butter for a few years, and devoted themselves to being pioneers in online medicine. They exceeded even their own dreams with Apostrophe. They are an inspiration to us all!”
Holber expressed gratitude for all who have helped Apostrophe along the way. “We still have a lot of work to do, but this is an awesome milestone and we share this with a lot of stakeholders.”
