SmileDirectClub
| Company type | Public (formerly) |
|---|---|
| Industry | Teledentistry, Dental aligners |
| Founded | 2014 |
| Founder | Jordan Katzman, Alex Fenkell |
| Defunct | 2023 |
| Fate | Liquidated; assets acquired by SmileSet |
| Successor | SmileSet |
| Headquarters | Nashville , United States |
Area served | United States, Canada, Australia, United Kingdom |
| Products | Clear dental aligners using 3D printing technology |
Number of employees | 6,300 (2019) |
SmileDirectClub was a U.S.-based teledentistry enterprise established in 2014 by Jordan Katzman and Alex Fenkell. With its main office located in Nashville, Tennessee, the company swiftly reached a valuation of $3 billion by 2018. In 2019, it reported revenues of $750 million and employed roughly 6,300 individuals.
In late 2023, SmileDirectClub sought protection under Chapter 11 bankruptcy but was liquidated within three months. Its assets and proprietary technology were subsequently purchased by SmileSet, which now operates as its successor.
Products
SmileDirectClub manufactured clear aligners using 3D printing technology, positioning itself as an alternative to conventional braces and competing with brands such as Invisalign. Licensed orthodontists and dental professionals provided oversight through virtual consultations. Customers received impression kits to create dental molds, which were reviewed remotely by these professionals to guide treatment plans. The company collaborated with about 225 licensed practitioners.
Despite primarily functioning online, SmileDirectClub maintained nearly 300 physical retail outlets throughout the United States, Canada, Australia, and the United Kingdom.
History
At inception, SmileDirectClub partnered exclusively with Align Technology to distribute its aligners. After disputes concerning non-compete breaches, an arbitration ruling required Align to close its retail stores and relinquish its ownership stake. Subsequently, in 2021, SmileDirectClub was mandated to pay Align $43.4 million plus accrued interest for that equity share.
In October 2018, the company secured $380 million in financing led by Clayton, Dubilier & Rice and Kleiner Perkins, resulting in a valuation of $3.2 billion. Initial investments included support from Camelot Venture Group, with NBA athlete Draymond Green joining as an investor in 2015 after using the product.
SmileDirectClub expanded into Canada toward the end of 2018 and entered markets in the United Kingdom and Australia during 2019. The brand launched a confidence-building campaign featuring singer Shawn Mendes during the 61st Annual Grammy Awards to promote enhanced smiles.
In April 2019, CVS announced plans to introduce SmileDirectClub locations within hundreds of its stores. The following month, HP partnered with SmileDirectClub to manufacture over 20 million 3D-printed dental molds annually.
SmileDirectClub filed for an initial public offering (IPO) in August 2019 and debuted on the stock market in September at $23 per share, surpassing expectations. However, shares closed on the first trading day at $16.67, reflecting a 28% drop from the initial price. Despite this market performance, the CFO reaffirmed commitment to the company’s strategic objectives.
On April 28, 2020, SmileDirectClub secured a patent for its plastic aligner manufacturing process but subsequently lost it following litigation against competitor Candid Care.
A cyberattack in April 2021 resulted in an estimated revenue loss between $10 million and $15 million due to operational downtime; however, no ransom was paid as the breach was successfully thwarted.
On August 3, 2021, a shooting incident at SmileDirectClub’s Nashville manufacturing site injured two security personnel and a manager before police neutralized the assailant. The company publicly expressed sympathy following the event.
On September 29, 2023, SmileDirectClub filed for Chapter 11 bankruptcy with plans to maintain business operations. After an unsuccessful attempt to sell the company, it announced immediate shutdown on December 8 and converted bankruptcy proceedings to Chapter 7 liquidation. Subsequently, Nashville-based SmileSet acquired SmileDirectClub’s technologies and assets, including patents and manufacturing capabilities.
Criticisms
The American Association of Orthodontists (AAO) lodged complaints against SmileDirectClub with 36 state dental regulatory boards, accusing the company of breaching professional standards. SmileDirectClub reported that 12 investigations concluded without any negative legal consequences; however, the AAO confirmed only five such closures.
In September 2019, a class-action lawsuit was initiated by customers who alleged that SmileDirectClub engaged in deceptive advertising practices and violated FDA regulations. Due to arbitration clauses embedded in the consent agreements, all but two plaintiffs opted to withdraw from the case.
The New York Times disclosed in January 2020 that SmileDirectClub employed non-disclosure agreements to suppress customer grievances, including those involving medical complications. The company responded by filing a defamation lawsuit against the publisher of Lifehacker following reports that highlighted potential product hazards. Additionally, SmileDirectClub pursued legal action against several state dental boards that imposed operational restrictions. The company's chief legal officer justified these measures as necessary to safeguard its mission of expanding access to dental care.
In March 2020, CBC News' Marketplace conducted an investigation into SmileDirectClub’s claims and treatment protocols in Toronto, uncovering misleading information and questionable orthodontic plans. Expert orthodontists reviewing these plans found none suitable for treatment; one expert cautioned about an elevated risk of harm. SmileDirectClub contested these findings and announced a series of enhancements, including improved training programs, revised forms emphasizing the importance of dental visits prior to treatment, and earlier identification of supervising dentists.
In May 2020, SmileDirectClub initiated a $2.8 billion lawsuit against NBC News, alleging inaccuracies in a report that spotlighted patient discomfort and complications associated with its aligners. The company asserted there were over 40 falsehoods in the coverage; NBC News maintained the integrity of its reporting. Ultimately, in December 2021, the lawsuit was dismissed under Tennessee’s anti-SLAPP statute due to failure to satisfy required legal criteria.
Further reading
External links
- (redirects to SmileSet)
- Telemedicine
- American companies established in 2014
- American companies disestablished in 2023
- Health care companies established in 2014
- 2014 establishments in Tennessee
- Companies that filed for Chapter 11 bankruptcy in 2023
- Health care companies based in Tennessee
- Companies based in Nashville, Tennessee
- Companies formerly listed on the Nasdaq
- 2019 initial public offerings
- Dental companies of the United States