The archive · Health & Care · Financial decision · 2014–2023
SmileDirectClub's $8.9B at-home aligner bet died in a Dec 2023 shutdown after Chapter 11
Direct-to-consumer aligners at ~$2,000 vs $5,000 in clinics: $423M 2018 revenue, $8.9B IPO, then Chapter 11 and a Dec 8, 2023 global shutdown.
SmileDirectClub
What the business is
SmileDirectClub sold clear teeth aligners directly to consumers through teledentistry: customers ordered impression kits online or got scanned at SmileShops inside CVS, Walgreens and Walmart, then remote dentists monitored the treatment.
Starting capital：Seed round funded by David Katzman's Camelot Venture Group (CNBC); the 2019 IPO raised $1.3B at an $8.9B valuation
How it started
Founded in Nashville in 2014 by Jordan Katzman and Alex Fenkell, with Jordan's father David Katzman as CEO; the Katzman family retained more than 65% of voting power after the IPO. The pitch was to 'democratize access to a smile' by cutting out the orthodontist's office, backed by splashy TV and social ads.
What happened
Revenue hit $423.2M in 2018 (up 190%) on $289.3M of marketing and general spend, with a $74.8M net loss (CNBC). The Sept 2019 IPO raised $1.3B at an $8.9B valuation, but shares slid 28% on debut. A patent fight with Invisalign maker Align Technology ended in a $63M judgment against SmileDirectClub, and COVID-era supply and labor problems hurt sales (Retail Dive). On Sept 29, 2023 it filed Chapter 11 with a DIP facility of at least $20M and up to $60M more if conditions were met, hunting for a going-concern deal by Nov 23 (SEC 8-K; Retail Dive).
How it ended up
On Dec 8, 2023 SmileDirectClub said it would wind down global operations immediately after failing to find a partner to recapitalize the business: unshipped orders were canceled, customer care closed, SmilePay installment customers were told to keep paying, and refund eligibility was left to the bankruptcy process (CNN/KSL; Retail Dive).
Background
SmileDirectClub was a Nashville teledentistry company founded in 2014 that sold clear aligners directly to consumers for about $2,000 — roughly $3,000 less than a clinic-based course. Customers ordered impression kits online or were scanned at SmileShops inside CVS, Walgreens and Walmart, then remote dentists reviewed and monitored the treatment from afar.
The model scaled fast: 2018 revenue reached $423.2M, up 190% year over year, and the Sept 2019 IPO raised $1.3B at an $8.9B valuation. But the business was marketing-heavy — $289.3M spent in 2018 — and still posted a $74.8M net loss. A legal fight with Invisalign maker Align Technology ended in a $63M judgment against the company, and COVID-era disruptions further dented sales.
SmileDirectClub filed Chapter 11 on Sept 29, 2023 with a DIP facility of at least $20M and up to $60M more, and a Nov 23 deadline to find a going-concern buyer. No buyer appeared. On Dec 8, 2023 it wound down global operations immediately: orders were canceled, support closed, and SmilePay customers were told to keep paying while refund eligibility was decided in bankruptcy.
What has to be true
- The unit economics never worked: $423.2M of 2018 revenue still left a $74.8M net loss, and marketing absorbed $289.3M — growth was bought, not earned (CNBC).
- The Align Technology dispute ended in a $63M judgment, draining cash and attention while the core model stayed unprofitable (Retail Dive).
- Bankruptcy was a race against time: the DIP structure only supported a going-concern deal until Nov 23, 2023, and liquidation was the pre-planned fallback when none came (Retail Dive).
- The shutdown broke the product promise: customers mid-treatment lost their aligner program while SmilePay installment plans kept billing — a cautionary tale about financing consumer health products.
What can be applied
Scale bought with ads is not a moat: SmileDirectClub proved demand for cheap aligners but spent $289M on marketing, still lost money, and stranded customers mid-treatment when recapitalization failed.
Aftermath
As of 2026-09-02, SmileDirectClub is defunct. Its Dec 8, 2023 wind-down canceled unshipped orders and closed customer care; SmilePay collections and refund eligibility are being resolved through its Chapter 11 case in the Southern District of Texas (SEC 8-K; Retail Dive). The company that promised to 'democratize smiles' is now the reference case for the collapse of direct-to-consumer teledentistry.
Sources
- Form 8-K — SmileDirectClub, Inc. (Chapter 11 filing)
- SmileDirectClub shuts down, leaving customers without support
- SmileDirectClub prices IPO at $23 per share, valuing the company at $8.9 billion
- Telehealth orthodontics company SmileDirectClub shuts down
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