Free3 Healthcare Pvt Ltd, which runs a dental clinic chain under the Smile Merchants brand, has received an undisclosed amount in follow-on investment from impact investor Unitus Seed Fund.
The money will be used to expand operations in Tier II and III cities, Unitus said in a statement.
Smile Merchants was founded in May 2012 and is based in Bhiwandi, near Mumbai. It is focused on markets outside the metro cities. The chain has six clinics and claims to have treated about 10,000 in the past year. The company aims to treat one million rural patients in the next five years.
“This investment proves the trust that our existing investor has in the Smile Merchants model,†said Rushi Trivedi, CEO of Smile Merchants.
Smile Merchants operates on a hub-and-spoke model. It sets up low-cost “spoke†clinics in villages to offer services such as root canal treatment, tooth extractions and teeth replacements. These village clinics are supported by “hub†clinics in nearby towns that provide advanced treatments such as implants and even conduct surgeries.
“Smile Merchants has introduced new methods to disrupt cost, reach and quality of rural dental care including introduction of warranties and removal of unnecessary dental equipment,†said Dave Richards, managing partner at Unitus.
Unitus was founded in 2012 and is based in Bengaluru and Seattle. The fund, which is focused on healthcare, education, mobile, e-commerce, retail and agriculture, has a corpus of $23 million and made five new investments last year. Besides, its portfolio companies raised $14.8 million in 2015. It had also floated an accelerator for impact VCs last year which is managed by Capria Ventures.
In early 2014, Unitus had invested between Rs 50 lakh and Rs 1 crore ($83,000-$166,000 then) in Smile Merchants.
A number of dental care chains have attracted investor interest in the past few years as the segment grows. According to the Indian Dental Association, the overall dental industry including products and equipment is projected to touch $250 billion by 2020 from $100 billion in 2015.
The dental care chains that have attracted funds include Total Dental Care Pvt Ltd, which operates under the MyDentist brand, and Today's Healthcare India Pvt Ltd, which runs dental care chain Denty’s.