SmileDirectClub Inc., a dental aligner manufacturer, has filed for bankruptcy just a few years after its highly successful IPO. The Nashville-based company made the Chapter 11 declaration in Texas as a means to sustain operations while working on a strategy to settle its debts. As part of a revival plan, the company’s founders are expected to invest a minimum of $20 million back into the business.
SmileDirectClub gained popularity by introducing plastic aligners as a more affordable alternative to traditional braces, utilizing a direct-to-consumer marketing approach. However, the company faced numerous challenges after its IPO, including decreasing revenues, remaining unprofitable, and a patent dispute with a rival firm. The onset of the pandemic further strained the company as it was forced to reduce sales and promotional activities. Additionally, stiff competition from brands like Invisalign, Candid, Byte, NewSmile, and ALIGERNCO intensified the challenges for SmileDirectClub in the dental aligner market.
As a result of these difficulties, SmileDirectClub’s valuation plummeted significantly from its peak in 2019. The company’s stock closed at $0.42 following the bankruptcy announcement. This turn of events highlights the harsh reality faced by the once-promising dental aligner manufacturer.