INSUBCONTINENT EXCLUSIVE:
Amid expectations that early-stage funding and valuations will decline due to an economic downturn caused by the novel coronavirus
outbreak, young startups like the Brazilian dental company SouSmile, which raised in the time before COVID-19, are feeling grateful for
secured runway.
SouSmile is a direct to consumer dental company based in São Paulo
SouSmile has raised $10 million in Series A funding from Global Founders Capital, Kaszek Ventures and Canary, bringing the company total
The two-year-old startup sells an invisible aligner and whitening gels through five retail stores in shopping malls across São Paulo and
Rio.
SouSmile is a new option for Brazilians hoping to get started on orthodontic work
The process consists of an evaluation by a licensed dentist that includes a panoramic X-ray, 3D scan and a clinical exam
Then, the company approves customers for treatment
SouSmile follow-up process includes bimonthly appointments, and costs approximately $1,000, which co-founder Michael Ruah says is 60%
cheaper than comparable treatments, and can be paid in installments
Treatment is fast, taking between three to nine months.
SouSmile has a six-person co-founding team
The 100-person startup is made up of 50% licensed dentists.
Ruah anticipates that the coronavirus pandemic will have a negative short-term
revenue impact for the company, as they anticipate less foot traffic in retail stores over the coming weeks, possibly months
He hopes that because the business is still young, macro indicators won''t have a huge impact on the bottom line in the medium-to-long term
Ruah says that the most important thing is that SouSmile employees and customers are safe and healthy at this point.
Why is Brazil a good
market for a D2C dental startup?
With 2 million orthodontic cases per year, highly populous Brazil is one of the largest dental markets
globally, yet the penetration of invisible aligners is less than 2% due to prohibitive prices
Ruah compares this to the 40% penetration in the United States for adults, citing Invisalign numbers
There still a dent to be made, as SouSmile says it saw more than 10,000 bookings last year.
Ruah also cites a cultural reason as to why
Brazil is a smart market for a product like this: Brazilians care a lot about both beauty and their oral health
&Brazilians brush their teeth three times a day
They&ll go out for lunch, they&ll come back to the office and brush their teeth
Everybody has their toothbrush and toothpaste with them all the time,& he explains.
SouSmile invisible aligner costs around $1,200
Treatment lasts between 3-9 months.
Branding: Cosmetic versus health
SmileDirectClub raised nearly $440 million at a $3.2 billion valuation
before going public in 2019
The teeth-straightening company built its brand by leveraging the celebrity beauty angle with Instagram influencer campaigns that marketed
the visual results of its product
While SouSmile hopes to see big numbers like its United States -based predecessor, it wants to take more of a healthcare-first approach to
its branding, rather than cosmetic
SouSmile is up against some big challenges
Physical retail costs are expensive
Manufacturing is hard, and the company doesn''t appear to be particularly tech-enabled, relying mainly on physical retail presence for
customer acquisition.
SouSmile isn''t the only Latin American startup working on an anti-braces dental solution, either
Moons, a Mexican invisible aligner startup that just launched out of Y Combinator, may have a head start
Moons delivers a similar product as SouSmile for around the same cost, and is also using 3D printing to manufacture its aligners
Moons is targeting the Latin America market with $5 million in funding and the Y Combinator stamp of approval
Moons has already opened 18 locations across Mexico and Colombia.
But Brazilian tech can operate like a separate ecosystem apart from
adjacent Spanish-speaking Latin America due to country regulations, language barriers and shipping complications
Consumer startups that can deliver products that improve the daily lives of Brazil massive middle class are the ones that succeed, and
SouSmile now has the capital to shoot its shot.
