Aussie’s $46m solution to braces
AN AUSTRALIAN medical 3D printing company is hoping to take on $30 billion giant Invisalign in the lucrative clear aligner market by offering a faster, more dentist-friendly alternative.
SmileStyler, founded by serial entrepreneur and Melbourne Rebels rugby union club chair Paul Docherty, has already signed up 115 dentists after launching in July and forecasts revenue of $6 million this financial year.
Mr Docherty founded utility connection business Direct Connect in 2004 and saw it "all the way from a desk on my own in a dark room" to a combined $600 million sale, along with Lumo Energy, to Snowy Hydro in 2014.
He became interested in the field after meeting an executive from global 3D printing firm Stratasys during an eight-week management program at Harvard Business School. "I said to him, 'What are you doing in Asia?' He said he wasn't sure, they weren't thinking too much," Mr Docherty said.
Seeing a gap in the market, he founded 3DMediTech, which manufactures SmileStyler clear aligners and Serkel, a 3D-printed helmet designed to treat babies born with asymmetrical head shapes.
Mr Docherty said while the clear aligner market was two decades old, the take-up was accelerating both in the aesthetic and orthodontic space "as it starts to bleed into the youth market" and the booming Asian market.
"As the technology gets better people will get more comfortable doing this and it'll continue to drop down to teenagers, which means braces will slowly die on the vine," he said.
"Invisalign are currently predicting medium-term growth of 30 per cent year on year. That's big growth for a big company. They do about $1.5 billion turnover in aligners and have a $30 billion market cap."
More than 40,000 Australians a year use clear aligners and it's the fastest growing dental category globally. There are an estimated 100 million consumers in Asia with an estimated value over $US200 million.
3DMediTech is part-way through its second round of capital raising after an initial investment through listed UK firm Utilico valued the company at $46 million.
Utilico director and prolific investor Duncan Saville was one of the original directors and a founder of Infratil, the New Zealand-based infrastructure investment company that previously owned Direct Connect and Lumo Energy.
"We've got a link over many years," Mr Docherty said.
He sees 3DMediTech, which is currently in "deep discussions with a number of potential partners in the Asia", as uniquely positioned to offer a hi-tech manufacturing product to the region.
While Invisalign focuses mainly on orthodontists, SmileStyler is targeted specifically at dentists. "We knew there was a revenue decline for dentists year-on-year over time, there's a whole range of different market forces driving that process," Mr Docherty said.
"But what we knew was really good dentists were getting a number of chairs and developing a clear aligner business inside their practice, bleeding into the orthodontic market doing simple cases, adding revenue to their practice. We saw that as our key focus."
It provides another revenue stream for dentists as they can scan their patients and send the digital files directly for manufacture in Melbourne, meaning the process takes a few days compared with six to eight for other brands.
"We think 10 to 15 per cent of dentists in Australia have a digital scanner," Mr Docherty said. "We've said, here's a product that can pay for your scanner, generating revenue from the top line."
SmileStyler also offers what it calls "phased treatment". Other clear aligner firms send the customer all 40 aligners for their entire treatment and "expect you to be compliant".
"You might go on holidays, have a big night out, forget to wear them three days in a row, and you get out of whack in your treatment. Orthodontists can do correction and modification but in about 50 per cent of cases they redo the physical imprint and start the treatment again," Mr Docherty said.
"We simplify it for dentists. When you're about three months through your treatment you go back to the dentist and do a quick scan. Through the algorithm we tell you whether it's in or out and send out new aligners. That's the beauty of digitisation."