SmileDirectClub has become the latest casualty in what some are calling a startup Mass Extinction Event. The telehealth company, which aimed to revolutionize traditional orthodontics, announced on Friday that it was shutting down operations, just three months after filing for Chapter 11 bankruptcy.
According to court documents, SmileDirectClub took part in a scheduled hearing on Friday “to consider conditional relief” at the US Bankruptcy Court for the Southern District of Texas.
The demise of SmileDirectClub adds to a string of recent failures among high-flying startups. WeWork, with over $11 billion in private funding, went bankrupt earlier in the fall. Hopin, another virtual events startup valued at $7.6 billion, sold its primary business units for $15 million.
That’s not all. Bird, the e-scooter company, once the fastest startup to reach a $1 billion valuation, was delisted from the NYSE and is now valued at $7 million, less than a third of the $22 million its founder paid for a Miami mansion in 2021, according to a report from the New York Times.
At its peak, SmileDirectClub reached a valuation of $8.9 billion and secured $427 million in funding as a private company before going public in 2019. Overall, SmileDirectClub has raised a total of $694.5 million in funding over 4 rounds. Its last funding was raised on Apr 28, 2022, from a post-IPO debt round, according to data from Crunchbase. In a statement on its website, the company said:
“SmileDirectClub has made the incredibly difficult decision to wind down its global operations, effective immediately. For new customers interested in SmileDirectClub services, thank you for your interest, but aligner treatment is no longer available through our telehealth platform. For existing customers, we apologize for the inconvenience, but customer care support is no longer available. Thank you for your support and letting us improve over 2 million smiles and lives.”
Founded in 2014, SmileDirectClub acknowledged the challenging decision to wind down global operations in a statement on its website, expressing gratitude to customers for their support in enhancing over 2 million smiles and lives. Some customers, amid a 4-6 month teeth-straightening course, may find themselves stranded. The company advised them to consult local dentist offices for continued care.
SmileDirectClub had positioned itself as an affordable alternative to traditional orthodontics, aiming to democratize access to a captivating smile. Its aligners, priced at around $2,000, offered a more budget-friendly option compared to the approximately $5,000 cost of clear aligners from brick-and-mortar medical offices.
While customers won’t receive new aligners to complete their treatment, those who financed their plans are expected to continue monthly payments until the full amount is paid under the SmilePay program. Refund eligibility will be determined as the bankruptcy process unfolds.
Despite major retailers like Walmart and CVS carrying its products, the Nashville-based company filed for bankruptcy in September, with plans to restructure and thrive as an international oral care leader.
SmileDirectClub Founders, Jordan Katzman and Alex Fenkell
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- Source: https://techstartups.com/2023/12/11/smiledirectclub-a-telehealth-startup-once-valued-at-8-9-billion-shuts-down-after-bankruptcy/
