Investors smile on dental technology
Dental technology is emerging as a growing area of health care investor interest, according to a recent Harris Williams report.
Why it matters: As private equity continues to consolidate dental services organizations, demand for technology to streamline workflows is increasing, particularly as dentistry faces a tight labor market.
Zoom in: Investors are targeting dental tech companies that aid operational scalability, drive patient acquisition and satisfaction, improve the quality of revenue, and minimize overhead costs.
- Pandemic-induced squeezes on patient volumes have passed, but most providers still have packed schedules (and not enough dentists).
- "Staffing shortages and an increase in retirements rates of dentists have exacerbated the need for technology solutions that maximize value for both the patient and the provider," the report says.
- DSOs are also investing more in specialization to differentiate themselves in a crowded market, the report notes.
State of play: With 100+ PE-backed DSO platforms today, there is accelerating momentum in the space, among both existing sponsor-backed dental tech platforms and startups.
- Aquiline Capital-backed Planet DDS, a PE-backed provider of dental tech software, in January acquired dental practice management system provider Cloud 9 Software from Accel-KKR.
- Toothio, a Scottsdale, Ariz.-based dental staffing tech company, raised a $4 million seed round back in August.
- Torch Dental, a New York City-based dental supply provider secured a $28 million Series B, back in July.
- Wellplaece, a dental supply marketplace provider, gathered $5.5 million in seed funding.
The intrigue: Artificial intelligence is the term-du-jour in health tech, and there are plenty of opportunities to leverage AI in dental tech, the report says.
- In dental education, for example, virtual patient simulators are replacing clinical work on live patients.
- Other potential uses include imaging, oral surgery via robotics, practice management via virtual dental assistance, and other use cases.