The pandemic came like a storm affecting the whole world, and when it left, both people and businesses were tattered by it. One such teledentistry company that was clearly not immune to COVID-19 is SmileDirectClub. If you have heard it somewhere from someone, then we bet it started with ” Is SmileDirectClub going out of business 2024?” and the rest of the conversation took you by surprise at how it happened.
SmileDirectClub is known for its low pricing, which entices lower to middle-income customers. It is a US-based seller of low-cost teeth straighteners. It went public in 2019, raising $1.35 billion. This deal made its founders a billionaire.
But four years later, the story of this company completely changed. If you want to know how and what happened to SmileDirectClub, then keep reading this article.
In this article, we have compiled every information about SmileDirectClub that will help you gain some insight into the company.
Who Owns SmileDirectClub?
SmileDirectClub is a teledentistry company. It was started in 2014 by co-founders Jordan Katzman and Alex Fenkell.
The company’s current board of directors include:
- David Katzman- Chief Executive Officer and Chairman
- Steve Katzman- Chief Operating Officer and Director
- Alexander Fenkell- Co-founder and Director
- Jordan Katzman- Co-founder and Director
- Ted Ward- Director
- Richard F. Wallman- Director
- Linda Williams-Director
- Alex Dimitrief- Director
- Susan Grrenspoon Rammelt- Chief Legal Officer, EVP Business Affairs
Is SmileDirectClub Going Out Of Business 2024?
SmileDirectClub filed for Chapter 11 Bankruptcy on September 29 after failing to obtain third-party financing.
This filing will allow the company to manage its operations and also pursue capital reorganization under the supervision of the US Bankruptcy Court for the Southern District Of Texas.
At the time of the filing, SmileDirectClub owned $900 million from its creditors but only had $5 million in their cash box.
Moreover, to support its restructuring, its founders have pointed $20 million to fund the search for a suitor. According to the Chief Financial Officer of the company, SmileDirectClub will shut down its operations if the company can not find a suitor in the next two months.
The company also mortgaged its receivables and intellectual property to get more cash and borrowed $255 million via HPS Investment Partners. The company believes that filing for Chapter 11 is a plan to improve and strengthen the business.
So, as of currently, the company is not going out of business, but it’s only a matter of time before it does.
What Are The Factors Affecting The Business Of SmileDirectClub?
Ever since SmileDirectClub started in 2014, it has had many troubles, such as fights, lawsuits, and even cyber-attacks. However, the problems started when the company went public in 2019 and has not made any money since then.
To worsen their misery, the pandemic started and gave a tough time to the company. The company’s revenue declined significantly, with a decrease of 37.3% between 2019 and 2022.
Moreover, the rising inflation and interest rates limited the spending of the customers, affecting the sale of the company.
The company was further challenged by conflicts with Align Technology, the company that makes Invisalign.
SmileDirectClub alleged Align Technology had violated the restricted pact it had agreed to when it became a 19% investor in the company.
However, according to the recent judgment, SmileDirectClub was penalized $63 million on September 12.
Who Are The Top Competitors Of SmileDirectClub?
SmileDirectClub is not in a monopoly market; it has some competitors worth noting. These competitors are ranked on the basis of how many customers they have, how much money they make, how much they are worth, and how many workers they have.
Invisalign is a big company in the invisible aligner industry, just like a huge whale. The dentists and the orthodontists of the company provide you with the treatment in their offices. However, this is quite expensive.
Candid is a newbie in the industry, but they get you treatment with the actual orthodontists. The main admirers of the company are investors. This is simply because the company has a different approach to everything.
PlusDental is a company that is not only about aligners but also sell toothbrush and other mental stuff. The company is from Europe and has sold treatments to about 50,000 people, raising $88 million.
ClearCorrect was started in Texas when a dentist saw the necessity for clear aligners. However, the company was sold for $150 million dollars. During its service, it has helped more than 6 million people in 40 countries.
Byte uses special software to plan the treatment by analyzing the entire face of the patient. It is known for speedy treatment with special devices. However, the company is now sold to another big company and is planning to help 50,000 people by 2025.
What Is The Future Of SmileDirectClub?
Nothing can be said regarding the future of SmileDirectClub. However, in the industry of teledentistry, the company’s continued expansion is worth noting.
The company is expected to continue its operations during the bankruptcy. According to Yahoo Finance, the company projects growth of 17.9% for the next 5 years.
However, the future of SmileDirectClub is still being determined due to the Chapter 11 bankruptcy.
So, is SmileDirectClub going out of business 2024?
Well, the answer to this question is a bit complicated. The company has filed for bankruptcy and is looking for a suitor. The company is still operating under the supervision of a special court in Texas.
In this context, SmileDirectClub CEO David Katzman remains positive and said that he is excited about the future of the company. He further added that he looks forward to continuing work alongside leadership and the talented team to transform Smikle with reliability and the quality that customers deserve.
Why is SmileDirectClub cheaper?
In SimleDirectClub, you are not required to get an in-person appointment with a dentist, which makes it much cheaper in comparison to other teledentistry companies.
How many locations does SmileDirectClub has?
SmileDirectClub operates 300 retail locations across the USA, Canada, the United Kingdom and Australia.
Where is the headquarters of SmileDirectClub?
The company is based in Nashville, Tennessee, and therefore has its headquarters in the same state.
What is the amount of loan obtained by SmileDirectClub?
SmileDirectClub obtained a loan of $255 million from HPS Investment Partners. There’s only $138 million outstanding on the loan currently.