SmileDirectClub may be the first unicorn in dentistry history.
The orthodontics startup, which makes at-home mouth guards for teeth straightening and sells them directly to consumers, went public Thursday on the Nasdaq under the ticker 'SDC.' Shares were priced at $23 ー above the expected range ー but immediately slid after opening at $20.55.
After ringing the opening bell of the Nasdaq, co-founder Alex Fenkell told Cheddar that he isn't too worried about fluctuations in the stock on a short-term basis, given that the company sees a total addressable market of $550 million.
The company has been growing like a weed, with revenues jumping 190 percent to $423 million in 2018. There are now more than 300 "SmileShops" ー brick-and-mortar locations where customers can learn more about the products. Because there's not much merchandise or many build-out needs, those locations are relatively easy to open and can be placed within existing stores. SmileDirect has partnerships with both CVS and Walgreens to that end, Fenkell said, and credits the company's growth partially to its ability to partner with existing retail chains.
"It's a playbook that we're going to start taking to other countries," he said. SmileShops are currently in the U.S., Canada, Australia, and the UK.
SmileDirectClub is among the first of the billion-dollar vertically-integrated direct-to-customer brands to go public and how it fares on the public market will be closely watched by other consumer-facing startups, from Casper in the home goods space to Hims in the burgeoning telemedicine space. Retail-based healthcare services are tricky, and the American Association of Orthodontics has filed complaints in three dozen states about SmileDirect's business model. They argue that patients need to see orthodontists in person. (SDC has orthodontists that it uses to provide care via the internet.)
For patients, though, the telemedicine aspect is a feature, not a bug, and it's why the company raised more than a billion dollars on Thursday to fund its expansion, Fenkell said. "We're just getting started."
SmileDirectClub closed on the day at $16.67 per share.