Dental aligner company SmileDirectClub Inc. has filed for bankruptcy, four years after raising $1.35 billion in an initial public offering. The Chapter 11 filing in Texas will allow the company to continue operating as it works out a plan to repay creditors. As part of its reorganization, the company’s founders have committed to investing at least $20 million into the company. While the filing is a setback for SmileDirectClub, the founders’ investment shows their commitment to turning the company around and repaying its debts.
The bankruptcy filing comes at a challenging time for the company, as the COVID-19 pandemic has negatively impacted its business. SmileDirectClub provides clear dental aligners directly to customers, bypassing the need for in-person visits to orthodontists. However, with widespread closures and restrictions on non-essential medical services, the company has experienced a decline in demand for its products. Additionally, the company has faced various legal challenges and regulatory scrutiny, which have further exacerbated its financial difficulties.
Despite these challenges, SmileDirectClub is determined to emerge from bankruptcy and strengthen its position in the dental aligner market. The founders’ investment demonstrates their belief in the company’s long-term potential. By reorganizing and repaying its creditors, SmileDirectClub aims to regain stability and resume its growth trajectory after weathering the effects of the pandemic and addressing its legal and regulatory issues. With its founders’ financial commitment and a new strategic plan, the company aims to overcome its current challenges and rebuild its business.