Miami — Every year about 2 million Brazilians go to the orthodontist and initiate a treatment to straighten their teeth. And of those, 95% end up using braces because, until recently, they’ve been significantly less expensive than invisible aligners. But there’s a startup SouSmile, that’s trying to make invisible aligners more accessible, and investors are betting on them.
Today, SouSmile announced the close of an $18 million Series B round led by Kaszek Ventures, with participation from Chromo Invest, GFC, Atmos Capital, Allievo and Endeavor Scale-up Ventures.
“It’s more hygienic, more comfortable, more predictable, but it ends up being too expensive for the average customers,” said Michael Ruah, the company’s CEO and co-founder, citing that traditionally, clear aligners cost about R $12,000. The company didn’t disclose their pricing, but by submitting my own request on the company’s website, I learned that SouSmile’s aligners cost about R $4,500.
While the startup sounds like the U.S. equivalent of Smile Direct Club, which provides a DTC model, they are actually more similar to Invisalign, said Michael Ruah.
The company does sell clear aligners directly to consumers, but employs dentists and dentist partners that work on the alignment process. A user buys the aligners on the SouSmile website, and then goes to a dentist to get them fitted and for the dentist to accompany the process.
Until the pandemic, SouSmile, which was founded in November 2018, serviced customers only at their own clinics, but they were forced to pivot, and discovered an even faster growing model. “Because we control the supply chain, we were able to pivot quickly,” said Ruah.
“There are 50,000 dental clinics in Brazil and on average they have 40% unused capacity in their clinics, so they can put their extra hours on our platform,” said Ruah.
With this new approach, SouSmile expanded from 2-30 cities around Brazil in just a year and a half.
“Our DTC model lets us have control of the final price where other clear aligners sell to the dentist who then resell it and make a margin,” Ruah added.
The U.S. ortho market, the largest in the world with about 3 million cases started every year, services a population that is 75% teen, but in Brazil the age scales higher and we see a 50/50 split between teens and adults.
“It takes longer for people in Brazil to have enough money to start worrying about their dental health,” Ruah said.
Since the company’s inception, it has treated about 7000 people, and now has flagship locations in Rio, São Paulo, Belo Horizonte, and Brasilia.
You would think that with a technical startup such as this one, Ruah would be a former orthodontist, for example, but that’s not the case. He’s half Portuguese and half American, the son of an entrepreneur, and studied at the University of Pennsylvania (U. Penn.) in the U.S. He wanted to move to Brazil, for personal reasons, and had always dreamt of starting his own company in the DTC space, admiring Warby Parker that also came out to U. Penn.
Like many entrepreneurs in LatAm, he looked abroad to see what was working, and after some analysis, realized that the teeth alignment market was ripe for disruption, and took the plunge.