Alex Frommeyer comes from a family of dentists. Now he has a startup that sells dental insurance, but with a twist.
The company of Columbus, Ohio, called Dental Beamstarted by selling toothbrushes connected by Bluetooth, which means that their product communicates with an application.
Once they convinced people to use it, the founders saw an opportunity to use over a year of data they collected to get into the dental insurance market. The idea is to determine which of their users regularly floss and brush their teeth, and therefore less likely to experience costly problems like root canals and cavities, and offer them cheaper rates and other incentives.
The insurance product, which is now available in 16 states, has won the company another $22.5 million round of funding led by Kleiner Perkins.
This brings the company’s total funding to over $30 million.
Customers who sign up for Beam’s plan receive a connected toothbrush along with a steady supply of items like floss and replacement heads. Those who agree to use the smart brush – and share that data with the app – can get a lower rate on their premiums.
The company stresses that it does not share data about its users’ brushings with third parties.
For Kleiner, Beam represents an opportunity to break into a lucrative corner of the medical insurance market. As Frommeyer puts it, dental care involves “much less regulatory and network headwinds” than traditional health insurance.
Lucas Swisher de Kleiner, who joins Beam’s board of directors as part of the investment, estimates the dental market is worth around $78 billion. The company believes there is an opportunity for entrepreneurs to differentiate themselves from incumbents by focusing on technology and customer experience.
“When I think of places that haven’t been touched by technology,” adds Noah Knauf, the firm’s general partner, “I think of dental insurance, which is primitive.”
The dental insurance market is currently dominated by Delta Dental, United Healthcare and other insurance giants. But in recent years, a handful of well-funded tech start-ups have emerged in the space, from Beam to SmileDirectClub. Many of them focus more on cosmetic issues, with 3D-printed aligners to straighten teeth, rather than insurance, which could change in the coming years.
Kleiner and Beam declined to disclose company earnings or its latest valuation.
But Frommeyer said the insurance product has expanded to more than 1,000 small and medium-sized businesses, giving him a stable source of income. Contracts are usually signed on an annual basis, he said.
By the end of the year, he said, the company hopes to expand to 35 states.
Kleiner’s partners intend to remain active in health technology, despite reports that his life sciences partner Beth Seidenberg will leave his position within the company to create his own fund.
Knauf has extensive experience investing in the healthcare industry, and the firm also works closely with veteran healthcare investor Brook Byers, as well as technology investor John Doerr, who is increasingly investing. more in health.
