Public Startups

SmileDirectClub Prices IPO Above Range At $23 Per Share

At-home teeth-straightening startup SmileDirectClub priced its shares at $23 on Wednesday, ahead of its initial public trading date.

The Nashville-based startup, which will list on the Nasdaq exchange under the ticker “SDC,” raised $1.3 billion by selling more than 58.5 million shares (a number that could rise to 67.3 million shares if its underwriters exercise their option).

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SmileDirectClub makes oral inserts for individuals looking to straighten their teeth at home, claiming its products cost customers around 60 percent less than braces. Traditional metal braces typically cost between $3,000 and $7,000, according to Oral-B, while Invisalign braces cost between $4,000 and $7,400.

SmileDirectClub, in contrast, charges a $1,895 single payment for its at-home teeth straightening kit, or $85 per month for 24 months and a $250 deposit for a total of $2,290. The model has found wide investor interest, with SmileDirectClub raising $439.5 million in total funding while private according to Crunchbase data, with notable investors like Kleiner Perkins and Spark Capital,

SmileDirect said last week that it intended to price its shares between $19 and $22. With the pricing of $23 per share, the company is now valued at $8.9 billion.

SmileDirectClub last had a private valuation of $3.18 billion, according to Crunchbase.

When it dropped its S-1 last month, the company reported that its H1 2019 revenue was $373.5 million, an increase from $175.1 million during the same period in 2018. Operating costs and losses also spiked for the company, which was only founded in 2013.

SmileDirect also noted in its filing that it had received from pushback from the dental community for its products. The American Association of Orthodontists has alleged that the company’s service is “illegal and creates medical risks,” according to BuzzFeed News.

“A number of dental and orthodontic professionals believe that clear aligners are appropriate for only a limited percentage of their patients,” SmileDirectClub wrote in its S-1 filing. “National and state dental associations have issued statements discouraging use of orthodontics using a teledentistry platform.”

More tomorrow when it begins trading.

Illustration Credit: Li-Anne Dias

 

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