US giant aims to take a bite out of high orthodontic bills
Simon EvansSenior reporter
Apr 2, 2019 – 12.06pm
SmilesDirect Club is majority owned by venture capital firm Camelot
It claims to be able to cut the cost of traditional braces on teeth by 60pc
It uses 3-D printing technology to produce clear aligners from a Nashville plant
Private equity-backed United States teeth-straightening company SmileDirectClub is preparing to shake up the orthodontics market in Australia.
The US$3.2 billion ($4.5 billion) company says the cost of traditional braces on children's teeth in Australia is very expensive by world standards.
SmileDirectClub president of international Kay Oswald said this made Australia a natural choice for its next phase of international expansion, following its move late last year into the Canadian market, a springboard from its core US operations.
Private equity firms are backing SmileDirectClub as it tries to shake up orthodontics in Australia. Can Stock Photo Inc / Zurijeta
"Australia is really ripe for disruption like this,'' Mr Oswald said in an interview from the group's headquarters in Nashville, Tennessee.
He said the group's extensive research had found there were consistent grumbles from Australian parents about the cost of braces and orthodontic treatment, which could cost as much as $8000 or $9000.
He said SmilesDirectClub, which uses 3-D printed clear aligners as its main treatment, could cut that cost by up to 60 per cent in many cases.
SmileDirectClub is a direct-to-consumer teeth-aligner company which began operations in 2014. Its major shareholder is venture capital firm Camelot Ventures, and late last year it raised US$380 million from a range of US private equity investors including Clayton, Dubilier & Rice, Kleiner Perkins and Spark Capital. That capital raising valued the company at US$3.2 billion.
Plastic mould
Under the SmilesDirect model, patients are sent an impressions kit in the mail with dental putty and a plastic mould, to take an impression of their bite at home. They can also choose to have that done at a SmileShop outlet, the first of which is planned to open in the Sydney CBD by the end of next month.
"We've been looking at this market for six months,'' Mr Oswald said.
The company uses 3-D printing technology at its Nashville plant to produce the aligners and set out a detailed treatment plan, using licensed dentists in Australia to monitor the progress of the patient remotely, using technology.
Mr Oswald said the patient did not need to visit a dental practice for regular check-ups. The average treatment took about six months, but the range was between four and 14 months.
"Everything can be done at home,'' he said.
Mr Oswald said SmileDirectClub aimed to have shopfronts in Sydney, Melbourne and Brisbane initially, ahead of a national expansion.
"We really want to be nimble, and to be humble,'' he said.
Convenience a big factor
He said the customer base was those who required ''mild to moderate'' orthodontics treatment. More complex cases would be referred to traditional orthodontists.
SmileDirect had treated 500,000 patients in the US since 2014 and had more than 150 physical outlets.
Mr Oswald said convenience was a big factor for busy families. "You don't have to go and see your dentist every few weeks. You don't have to plan months in advance,'' he said.
In the US, SmilesDirect Club has caused angst among traditional orthodontists, who have complained in many states to dental boards and other industry overseers.
Orthodontics Australia says the cost of a standard treatment using traditional metal braces for adolescents is usually between $5000 and $9000, but depends on the specifics of each case.
Simon Evans writes on business specialising in retail, manufacturing, beverages, mining and M&A. He is based in Adelaide. Connect with Simon on Twitter. Email Simon at simon.evans@afr.com
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