Today, SmileDirectClub announced a partnership with Walmart to sell a new line of oral care products, including toothbrushes, teeth whitening treatments, a water flosser and more. For one of the top teledentistry companies, this represents a move to make its business more compelling to customers and investors alike.
Following news of the deal this morning, SmileDirectClub shares spiked, with the stock currently trading up about 21% at $10.19. That’s significant for a company that had one of the worst first-day performances of any initial public offering over $1 billion in the U.S. since 2007. Still, SmileDirectClub’s stock is nowhere near its IPO price of $23.
SmileDirectClub’s entrance into the more traditional dental care space is clearly a move to try to differentiate itself from the likes of smaller startups like Uniform Teeth and Candid, while also creeping into oral healthcare startup Quip’s territory. As the dental care space gets more crowded, it’s no wonder why SmileDirectClub is looking to expand into already-proven business models.
SmileDirectClub’s main competitor in the more traditional dental care space — other than legacy brands like Crest and Colgate — is Quip. The New York-based startup has raised more than $60 million in funding and has sold its oral care products at Target since October 2018.
Since launching in 2014, Quip has grown its product catalog from just electric toothbrushes to include floss and toothbrushes for kids as well as an alternative to dental insurance.
By partnering with Walmart, SmileDirectClub will get increased visibility at more than 3,600 stores across the nation.
“SmileDirectClub’s debut of oral care products in mass retail extends our mission to be the consumer’s first resource for safe, affordable, and convenient oral care solutions,” SmileDirectClub Chief Global Brand Officer Josh Chapman said in a statement. “Partnering with Walmart to introduce our products reinforces our shared commitment to providing premium quality products at a price worth smiling about.”
SmileDirectClub is well-known for its teeth-straightening kits, while also infamous for its rocky relationship with dental boards across the nation. In October, SmileDirectClub filed a lawsuit against the Dental Board of California, claiming the board raided a number of its retail locations. Though, that was just the latest development in the company’s ongoing feud with dental boards and the American Association of Orthodontics.
The AAO has previously asserted that SmileDirectClub violates the law because its methods of allowing people to skip in-person visits and X-rays is “illegal and creates medical risks.” The organization has also filed complaints against SmileDirectClub in 36 states, alleging violations of statutes and regulations governing the practice of dentistry. Those complaints were filed with the regulatory boards that oversee dentistry practices and with the attorneys general of each state.
SmileDirectClub is clearly not going down without a fight, as demonstrated with its October lawsuit. And to tighten its grip on the market, perhaps an acquisition of one these smaller companies is in order.