Raleigh-based DentalHQ has secured $1.5 million in equity funding, the company announced last week. With this money, the startup intends to invest in product development and marketing as well as hire a day-to-day head of operations to propel the dental membership software company to the next level, said DentalHQ Founder Dr. Brett Wells.
“We’ve got all these awesome products that we’ve had on the back burner that we just couldn’t build because we didn’t have the capital to build out our development team that we can now,” Wells said.
The investment came from a group of individual angel investors, including Doug Brown, the former CEO of Raleigh-HQ’d Affordable Dentures & Implants, which was acquired by the private equity firm Berkshire Partners in 2015.
This was a strategic move away from VC funding because of the quality of individual investors interested, Wells said, although he wouldn’t rule out the VC route down the line. Previous to this round, DentalHQ had taken little outside investment.
“We had opportunities to take some VC money—a fairly significant amount of VC money,” Wells said. “But when you’ve got angel investors that are this strategic, heavily involved in the dental space, very successful in their own right, with tons of connections and great input… It didn’t make sense to take VC money.”
Ryan Vet, who was the founder of Durham-based healthcare staffing platform Boon—which we wrote about in 2019 and was later acquired by CrowdfundNC—has become one of DentalHQ’s advisors. He said Wells’ approach to the business as both a practicing dentist and a savvy entrepreneur sets the company apart from any other in the dental membership plan space.
“The great thing about DHQ is that it is having a positive impact for not only dentists and practice owners, but also for patients,” Vet said.
Vet has no doubt that Wells and his team will use the money and take DentalHQ to the next level.
“The exciting thing is that DHQ was positioned well before the round,” Vet said. “After closing this round, they have an even greater opportunity to make a positive impact in dentistry.”
Wells, who describes himself as a dentist by trade and an entrepreneur by passion, founded DentalHQ based on the problems he was seeing while running several dental practices in Raleigh (which he continues to do).
A few years ago, Wells had started offering membership plans with discounts for uninsured patients to be more affordable and transparent. But he realized that the membership programs, while great at retaining existing patients, did not successfully attract many new patients. Wells wanted a solution that would take the large annual costs of the package of membership services and break them down into monthly costs in a way that was easy for both the dental practices and their patients.
Since one didn’t exist, he started building it himself in what would become DentalHQ, launching in 2017. DentalHQ’s SaaS solution allows dental offices to easily set up and implement in-house, completely customizable membership plans.
It’s all part of Wells’ mission to reduce the barriers of cost to dental care. He said only about half of people go to the dentist every year, and only one in five who don’t have insurance will go to the dentist. With easy access to membership plans, dentists can grow their clientele and provide care to those it may have been inaccessible for previously.
Wells said DentalHQ is constantly adding solutions to make dentists’ lives easier. One, BusinessConnect, launched in the last year. It allows small businesses to offer membership plans to their employees, independently choosing how much to subsidize for each plan.
“That’s a tool that we think can really, as it evolves, be the first true competition for dental insurance, which is just a totally broken, antiquated, outdated system,” Wells said.
Benefits of bootstrapping
Part of the benefit in Wells not having a traditional technology or business background is that it ensured the tech would be easy to use for other dentists, he said. Currently, DentalHQ serves 30,000 members and around a thousand dentists’ offices.
“I didn’t really have a full understanding of technology and user experience and ease of use,” Wells said. “So the cool thing about bootstrapping our way to this point ahead of the raise was we had to build a technology that was very easy to use because we didn’t have this giant support/success team.”
It was important to educate dentists on the benefits of membership plans and act as a resource on how to run their businesses better first before attempting to sell them anything, according to Wells.
“That was a big learning for us—that in the dentistry space it’s not about just spending money on marketing and sales,” Wells said. “It’s about actually educating and improving the space and helping dentists be better at the business side of dentistry.”
Now with the funding help, DentalHQ is just getting started. Over the next year, Wells said that the startup plans to release a new version of its dashboard that will allow for more analytical tools for dentists, and to build more fintech solutions to serve dentists.