SmileDirectClub

SmileDirectClub is a teledentistry company. The company was co-founded in 2014 by Jordan Katzman and Alex Fenkell. It is based in Nashville, Tennessee.[3][4]

SmileDirectClub, LLC
TypePublic
NASDAQ: SDC
IndustryTeledentistry
Founded2014 (2014)
FoundersJordan Katzman
Alex Fenkell
Headquarters
Nashville, Tennessee[1]
,
United States
Revenue $750 Million(2019)[2]
Number of employees
6,300
Websitesmiledirectclub.com

Products

SmileDirectClub produces 3D-printed clear aligners.[5] SmileDirectClub aligners are a competitor of traditional braces and clear alignment companies like Invisalign. [6]

Communication with licensed orthodontic professionals and other SmileDirectClub staff takes place virtually. Impression kits are sent to customers, after which teeth molds are reviewed by dentists or orthodontists who oversee the treatment process. The company reportedly works with 225 licensed professionals.[7]

While most business and dentistry is conducted online, the company has 300 retail locations across the United States, Canada, Australia and the United Kingdom.[8][9]

History
SmileDirectClub celebrating the company's IPO listing on NASDAQ
SmileDirectClub in Times Square

The company initially partnered with Align Technology as an exclusive third-party distributor for its aligners.[10] After a dispute over violation of a non-compete clause claiming Align "misused confidential SmileDirectClub information and violated its fiduciary duties," Align was ordered by an arbitrator to close its retail locations.[11]

The American Association of Orthodontists (AAO) has filed complaints with 36 state dental boards, alleging that SmileDirectClub violates regulatory standards.[12][13] According to SmileDirectClub representatives, 12 of the cases have been closed and no adverse legal action has been taken against the company.[14] The AAO has stated that only five states confirmed closed cases.[14]

In October 2018, SmileDirectClub raised $380 million in an investment round led by Clayton, Dubilier & Rice and Kleiner Perkins, for a $3.2 billion valuation according to Bloomberg.[15] SmileDirectClub was initially funded by Camelot Venture Group. NBA player Draymond Green was an early investor in the company, investing in 2015, after personally using its products.[16]

The company expanded into Canada in November 2018,[17] and expanded into the UK and Australia in 2019.[9][18]

During the 61st Annual Grammy Awards, SmileDirectClub announced a collaboration with singer Shawn Mendes on campaign to show "that confidence is gained with an amazing smile."[19]

In April 2019, CVS announced that the company would add SmileDirectClub locations to hundreds of CVS stores.[20] In May 2019, HP and SmileDirectClub announced a partnership to produce over 20 million 3D-printed molds over the following year.[21]

Initial public offering

In August 2019, the company filed S-1 paperwork to go public.[22]

On September 12 2019, the company went public by offering initial shares at $23, above the expected price of $19-$22 per share. SDC's IPO opened at $20.55[23] and closed at $16.67 after the first day, a 28% loss from the initial shares offering.[24] After the loss, the CFO of the company has stated that the focus of the company will remain the same despite market evaluations.[25]

Criticisms

In January of 2020, the New York Times published an article revealing SmileDirectClub's usage of Non-Disclosure Agreements (NDAs) to silence customers who had issues with their aligners, including medical concerns.[26] The Better Business Bureau has recorded over 2,600 complaints against SmileDirectClub within the last three years, whereas the parent company of Invisalign, Align Technology, has less than 10 complaints. [27][28]

References
  1. Sandy Mazza. "SmileDirectClub announces 2,010 new jobs, $217M investment in Nashville HQ". Tennessean. Retrieved 26 September 2019.
  2. https://www.globenewswire.com/news-release/2020/02/25/1990443/0/en/Smile-Direct-Club-Reports-Fourth-Quarter-and-Full-Year-2019-Financial-Results.html#:~:text=FY%202019%20total%20revenue%20increased,FY%202018%2C%20to%20%24750%20million.
  3. "Teeth-straightening startup SmileDirectClub gets $3 billion valuation in new fundraising". CNBC.
  4. Stinnett, Joel (11 October 2018). "Nashville company raises $380 million at $3.2 billion valuation". bizjournals.com. Nashville Business Journal. Retrieved 30 November 2018.
  5. "Orthodontics Startup SmileDirectClub Gets $3.2 Billion Valuation". Bloomberg.
  6. Tindera, Michela. "Bracing For Competition? Cheaper Challengers Enter Invisalign's $1.5 Billion Market". Forbes. Retrieved 2019-08-29.
  7. "Teeth-straightening startups can be a cheap alternative to braces. But orthodontists have their doubts". Chicago Tribune.
  8. Sarah Toy. "SmileDirectClub went public: 5 things to know about the teeth-straightening startup". MarketWatch. Retrieved 26 September 2019.
  9. Kevin Truong. "Dental company SmileDirectClub files to go public". MedCityNews. Retrieved 26 September 2019.
  10. "Align Technology to Supply Non-Invisalign Clear Aligners to SmileDirectClub in North America". Align Technology. Retrieved 2019-05-23.
  11. "Arbitrator gives SmileDirectClub huge win over Align". Nashville Post. Retrieved 2019-05-23.
  12. Wolf, Janine (23 September 2018). "Orthodontists aren't smiling about teeth-straightening startups". mercurynews.com. The Mercury News. Retrieved 30 November 2018.
  13. "Getting Your Teeth Straightened at a Strip Mall? Doctors Have a Warning". Bloomberg.
  14. "The Cutthroat World of Orthodontic Invisible Aligner Startups". Racked.
  15. Wolf, Janine (2 November 2018). "Healthcare Startups Have Raised More This Year Than in 2012 And 2013 Combined". forbes.com. Forbes. Retrieved 30 November 2018.
  16. Michael LoRé. "Draymond Green Set For Another Big Pay Day As SmileDirectClub Goes Public". Forbes. Retrieved 26 September 2019.
  17. Taylor, Paul (12 November 2018). "Are DIY orthodontics safe?". theglobeandmail.com. The Globe and Mail. Retrieved 30 November 2018.
  18. Simon Evans. "US giant aims to take a bite out of high orthodontic bills". Financial Review. Retrieved 26 September 2019.
  19. Staff (6 February 2019). "Shawn Mendes to Launch SmileDirectClub Partnership With TV Spot During Grammys". Variety. Retrieved 28 February 2019.
  20. "CVS moves into dental care with teeth-straightening service SmileDirectClub". LA Times. Retrieved 26 September 2019.
  21. Tia Vialva. "HP AND SMILEDIRECTCLUB TO 3D PRINT 20 MILLION 3D PRINTED CLEAR ALIGNER DENTAL MOLDS PER YEAR". 3D Printing Industry. Retrieved 26 September 2019.
  22. Rose Dickey, Megan (16 August 2019). "SmileDirectClub files to go public amid concerns from dental associations". techcrunch.com. TechCrunch. Retrieved 20 August 2019.
  23. "SmileDirectClub opens for trading". Yahoo Finance. Retrieved 5 December 2019.
  24. Osipovich, Alexander. "SmileDirectClub Plunges 28% on First Day of Trading". WSJ. Retrieved 23 October 2018.
  25. Ross, Katherine (2019-09-12). "SmileDirectClub CFO on Going Public, SmilePay and Competition". TheStreet. Retrieved 2019-09-13.
  26. Griffith, Erin; Eavis, Peter (2020-01-21). "This Company Says It Will Fix Your Smile. It May Shush You if It Doesn't". The New York Times. ISSN 0362-4331. Retrieved 2020-12-05.
  27. "SmileDirectClub | Better Business Bureau® Profile". www.bbb.org. Retrieved 2020-12-05.
  28. Eavis, Erin Griffith and Peter. "This company says it will fix your smile. It may shush you if it doesn't". chicagotribune.com. Retrieved 2020-12-05.

Further reading
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