Teeth-Straightening Startup SmileDirectClub Seeks Public Listing Amid Regulatory Scrutiny
SmileDirectClub files for an IPO to raise up to $100 million as it rapidly grows its at-home aligner business. The company faces significant pushback from dental associations over its telehealth treatment model.
SmileDirectClub files paperwork to go public and seeks to raise up to $100 million in an initial public offering. The at-home teeth-straightening company generates massive revenue growth, bringing in $432.2 million in 2018 compared to $147 million the prior year. Customers receive invisible aligners by mail after completing at-home impressions or visiting a physical SmileShop, and licensed professionals remotely monitor their progress.
The startup achieves a $3.2 billion valuation following a massive funding round in late 2018, drawing investment from major firms like Kleiner Perkins and Align Technology. SmileDirectClub markets its service as a much cheaper alternative to traditional braces, with treatments typically lasting around six months. The company claims its direct-to-consumer model costs 60 percent less than other teeth-straightening options.
Despite its financial success, SmileDirectClub faces intense legal and professional backlash as it enters the public market. The American Association of Orthodontists files complaints against the company in 36 states, arguing that skipping in-person visits and X-rays creates medical risks and violates dental practice regulations. SmileDirectClub acknowledges these ongoing regulatory battles and professional skepticism in its public filing as significant risk factors to its business.