Fighting your dental issues and $54 Billion global productivity : A startup’s approach

5 min readJul 21, 2023

According to the World Health Organization’s Global Burden of Disease Study 2017, 3.5 billion people worldwide suffer from oral disorders, many of which are preventable with adequate mouth care, diet, and access to dental health services. Dental treatment is frequently excluded from basic health insurance packages in most countries and must be paid for out of cash or as an additional insurance fee. This makes the preventative power of oral health expensive for individuals, who frequently choose not to acquire dental coverage and instead visit their dentist only in emergencies. As a result, the economic effect of unmanaged oral health is estimated to be $54 billion in lost productivity for employers, owing primarily to absence from work. And so, this week an interesting headline caught my eyes — “Torch Dental Raises $28 Mn in Funding”. There were a lot of interesting viewpoints I observed and how customers like you could have a chance of using dental care at more affordable cost if companies and dental practices can save more and pass on some benefit to the commoners like you and me in a viable way.

So, story of Torch Dental (Torch Technology Inc.) starts with sister of founders named Meriem Boukadoum, who was a dentist by profession, wasn’t satisfied about a part of her job which needs her to keep track of dental products and order them at a reasonable price through negotiation which isn’t exactly a core competency of her job. Understanding her difficulties, two founders — Khaled Boukadoum & Yassine Boukadoum, MBA grads from Havard, found that the problem has been oddly widespread across the country. Deciding to channel their inner entrepreneurship spirit, they decided to join hands with Drew Werner, who is an MIT alumni, a software engineer & son of a dental hygienist , to solve this problem and started as a company. In July 2019, they sought a financing round and raised a sum of around ~$8.5 Mn for the company with Khaled Boukadoum assuming the position of CEO.

With this funding they started to develop the business growth and they are now currently having associations with over 2000 dental practices across the U.S. with many experts and entrepreneurs supporting this idea of ecommerce platform for dental supply chain digitalization. Their latest funding round which was Series B funding they raised sum of $28 Mn from investors led by Health Velocity Capital, which generally invests in growth-stage healthcare software and services companies. The other notable investors include but not restricted to Bessemer Venture Partners, FJ Labs, Felicis Ventures etc. This is a growth focused funding to expand their operations quickly across United States and capture a large market share.

My take (analysis) on how do they do it

Company: Business model adds a good value proposition to the dental establishment as they compete on cost, time, order management and product varieties. It has been estimated that an average dental practice spends close to 6% of their revenue on supplies and the recent CoVID fiasco has only raised the levels to around 8% percent as per 2022 price. This software platform if it has ability to pull back the levels to 5–6 %, a lot of value addition shall be delivered by the software usage.

Consider the assumption based on data available that an average American dental practice makes close to a $1 Mn/year handling 1300–1500 patients (1–2 dentists) an year with average value of $650-750. Current 8% puts $ 80K spent annually per practice and if they bring the levels to modest 6% (around 25% savings which was evident in torch dental case studies as well), it can bring down the cost by $ 20K. And if they chose to price software around $2–10K a year (makes perfect logical sense) brings current revenue yearly guestimate for the company to be around anywhere from $4 Mn to 20 Mn. And by public data we could understand that there are ~ 200K dental practices (according to IBISworld) across U.S. which pegs their current market share at ~1%. If they can capture say 25% of the market share, the potential revenue for them can be anywhere from $100 Mn to 500 Mn per year. This can put them at <2% of global companies in terms of revenue.

Competitors: While the direct competitors are far less in number, they are few ecommerce players such as TSDC, Pearson Dental supplies, Brasseler, Supply clinic who could compete on the price, time, order visibility and variety aspects. However, order management and product recommendations could turn out to be the key USP for torch dental if they are to make big.

Customer: Target customer leans towards smaller and newer dental practices and their new alliance with Mdent consulting, a advisory for setting up new practice, also looks appealing to boost each other’s customer base and provide a better value addition to the dental practices.

Way forward

I could think few ways in which they could grow their business over and above the existing products or services that they are offering.

First is becoming the Amazon of dental supplies. It was also not uncommon just few years ago, Amazon was supplying a good amounts of dental supplies in U.S. and hence with intelligent recommendations and A.I. features, they can look at the prospect of becoming a hub for sourcing of all dental care needs (by even introducing app). Second, is to be an advisor to the dental startup based on data about setting up a new clinic based on dental need demands. This can be made easier as they already have a tie up with consulting firm for dental startup. Third, they could tie up with a manufacturing firms to consult them on what type of product needs are required by most dentists and advice them to modify products for greater sales. Fourth is to setup a dental practice themselves in order to cater the areas which are of high demand and less supply.

More these type of companies enter the foray make the dental costs lesser for consumers and can typically down the end customer spent. This increases the accessibility of oral care for end consumers and that can do a world of good for all the stakeholders involved.

Disclaimer: Certain information contained in here has been obtained from third-party sources. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. This piece doesn’t represent any institute or organisation’s stand or opinion and its purely a personal one.

References:

Fighting your dental issues and $54 Billion global productivity : A startup’s approach

My take (analysis) on how do they do it

Way forward

Written by Yeshwant V

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