SmileDirectClub

SmileDirectClub lost $735 million between 2019 and 2022 while customer acquisition costs climbed above $800 per patient and lifetime value declined as regulatory scrutiny intensified. State dental boards in Georgia, Alabama, and California passed regulations specifically targeting the teledentistry model or requiring in-person exams before treatment — turning regulatory arbitrage into regulatory encirclement. Align Technology, which manufactures Invisalign through dentist partnerships and generates $3.7 billion in annual revenue profitably, sued SmileDirectClub for patent infringement in 2017 and forced a $93 million settlement in 2020 that the younger company could not afford. The company burned $150 million per year trying to build retail locations to appear more legitimate while simultaneously marketing itself as the convenient alternative to visiting physical locations. When interest rates rose and access to capital markets closed in 2022, SmileDirectClub had no path to profitability, no cash, and creditors unwilling to extend additional runway to a company that had spent four years proving the unit economics did not work.

VERDICT: ZOMBIECORN — $3.2 BILLION AT IPO TO $0 IN BANKRUPTCY COURT FOUR YEARS LATER, WHICH MAKES IT ONE OF THE FASTEST COMPLETE WEALTH DESTRUCTIONS IN HEALTHCARE HISTORY