Venture Capital flowing into Dental Products

Venture capital money is starting to flow into dental products.

As many know, most employer covered dental insurance plans are lacking. Most plans will cover just the basics, i.e. a yearly set of full mouth x-rays, two teeth cleanings per year and a somewhat discounted rate sheet for any major work, that includes filling and root canals by the way.

The retail dental industry, we use the word “retail” to highlight dental offices vs. wholesale sales and services sold to the industry like tools, labs services and consumables. Consumables are the items that need to be reordered on a regular basis at a dental practice, like floss, fillings for cavities, etc. The “retail” dental industry for the most part is a self-pay/cash business. We pay most of the cost for services out of pocket.

The B2C dental products industry is mostly a mass market sales game, whereby sellers of products, mouthwash, electric and manual toothbrushes, floss, etc. have to garner the attention of a distracted consumer to buy their products. In this space, Venture Capitalists (VC's) are starting to jump in, as they see a market for sellers of premium brands of products that can be marketed via various social tools and mass media segmentation to an audience that will pay for it.

An example is the coconut oil-coated, exotically-flavored floss produced by Cocofloss, which costs $8 for an attractively-packaged 32-yard spool (plus shipping, if your online order is less than $10). On a cost-per-yard basis, even the spendier incumbent floss brands are roughly half the cost of Cocofloss. This is a consumable product that can generate recurring revenue. There are also electric toothbrushes that are relatively inexpensive, but charge a premium for the replacement toothbrush you will need every few months. Again, a recurring revenue model.

These model are built on the dollar shave club and harry’s razors when you get a free razor unit, but need to buy the blades.

This VC money that is making it into the B2C product line is also starting to flow into vendor lines that sell into dental practices. Retail dental services, like medical practices are a labor intensive business (bodies). Services and products that move patients out of the waiting area, into a dental chair and out fast will be looked at for more investment dollars. Products that dry quick in a patients mouth, scheduling and booking software, fast re-ordering systems with fast delivery. You see where were going here?

Anything that can make a practice more efficient, profitable, increase chair turnover  and can lead to an upsell to a patient will be areas to look at for investment dollars.

Here's a great article to help fill in some blanks:

VC money flowing in the dental market

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