Indians have always been conscious of their physical appearances. Case in point being our matrimonial ads, where ‘fair skin’ is listed as an essential criterion. And with a growing and aspirational middle class, with higher disposable incomes living in India’s metro cities, the propensity to make ‘beauty’ or ‘vanity’ purchases has only grown.
Banking on India’s obsession with appearances is Toothsi, a two-year-old dental tech D2C (direct to consumer) startup which is in the business of selling a ‘great smile’, providing customers with teeth alignment treatment at home. Toothsi’s parent company AMPA Orthodontics has raised $5 Mn to expand its presence to over 15 cities in India, enhance its research and development (R&D), and technology capabilities, while also diversifying into dermatological treatments.
The funding round saw participation from Think Investments, a San Francisco-based hedge fund which has previously invested in Ascent Health, PharmEasy and Dream11, the family office of Nimesh Kampani of JM Financial, Siddharth Shah, cofounder and CEO at API Holdings (Ascent Health) and Ramakant Sharma, cofounder and COO at LivSpace.
Toothsi competes with other dental tech startups such as Clove Dental, 32Watts and LoveMyBraces, but looking to tap the broader trend, AMPA has branched out into dermatology with Skinnsi, which will provide at-home beauty treatments such as laser hair removal. The company claims to have served 7,500 dental care customers last year and is targeting 50,000 this year.
Toothsi Ventures Beyond Dental Care
Today, there’s a huge demand for beauty and wellness products, as well as medical services which may not be termed as essential, but are corrective procedures to enhance one’s physical appearance. From skin laser treatment to cure acne to hair loss treatment, beauty clinics have sprouted across metros. This phenomenon is best indicated by the rise of dermatology up the ranks in medical academia; it has emerged as one of the most preferred streams for specialisation among doctors during their post-graduate studies.
According to an Inc42 Plus report titled, India’s Healthtech Landscape In A Post-Covid-19 World, the Indian healthtech market is projected to reach a market size of $21.3 Bn by 2025, from $5.2 Bn in 2019. The market is expected to grow at a CAGR (compound annual growth rate) of 27% between 2020-25 and will acquire 3.2% of the global healthtech market pie by the end of the period.
Toothsi founder Arpi Mehta said that while more than 20 lakh Indians undertake an orthodontic treatment every year, it is estimated that more than 50 lakh undergo a dermo-cosmetic treatment annually. “With Toothsi’s at-home model of operations, the number of Indians opting for these services will only increase. So, the company can serve 30 lakh customers till 2025,” she said.
Customers can avail Toothsi’s solution by ordering a free at-home/office session with a Toothsi expert who can answer their queries. Following this, customers are helped with a 3D impression of how their ‘aligned’ teeth would look, which is Toothsi’s proprietary in-house tech. After customers give their approval, the dental aligners, built in Toothsi’s in-house laboratory, are delivered to their homes. Finally, the treatment is monitored by Toothsi’s doctors regularly through virtual sessions.
Mehta added that the company has been able to come up with better prices for the dental alignment treatment package than those offered by the other players in the market.
“Toothsi aligners are 60% more affordable compared to other players in the market. Our base-level package costs INR 51,999, which is what most people need. We were able to scale down the prices for our products by controlling in-house, all stages of a treatment cycle for every customer, namely planning, treatment, production and support,” she claimed
But that is not true, as at least one other dental tech player, LoveMyBraces, offers better prices for the teeth alignment procedure, with its most expensive treatment coming at INR 49,500. Besides this, conventional braces, which can be fitted in a dentist’s clinic, can cost customers under INR 30K.
Mehta said that the doctors on-boarded by Toothsi for handling treatments, are working full-time with the startup, and are compensated on the higher end of industry standards.
How The Pandemic Impacted Dental Care
Understandably, with its at-home model, the Covid-19 pandemic affected Toothsi’s operations for the nearly two months of hard countrywide lockdown from April-May last year. However, the company has claimed that June onwards, the at-home model lured a significant number of customers to try the teeth alignment treatment. Perhaps customers feared visiting a dentist due to physical distancing protocols that were in place at the time.
“We have grown 4x compared to our pre-Covid high, which was in Feb 2020. The company is already contribution margin positive and growing 30% month-on-month (MoM),” Mehta told Inc42, adding that Toothsi should be EBITDA positive in the next 18 months and be able to turn a profit after two years.
However, in its last released financials, the company had been making losses. In FY2019, Toothsi recorded a revenue of INR 1.84 Cr, a 247% growth from the previous fiscal year (FY18) — its first year of operations — when it recorded total revenue of INR 53 Lakh. However, during the same period, the company’s expenses also increased by 122%, from INR 1.32 Cr in FY18 to INR 2.93 Cr in FY19. Hence, the company’s net loss for the year stood at INR 1.09 Cr, an increase of 38% compared to the previous year.
With the goal to increase customer touchpoints to push education around Toothsi’s process, the company is opening experiential centres in major cities. Customers will be able to get a scan and speak to a professional to better understand the process, which is likely to help Toothsi increase the scope for upselling its newer services.