In half a year, it has attracted more than 5 billion gold, Sequoia Huaxing's latitude and longitude bytes have been deployed, and the oral circuit has been in a mess.

The dental medical circuit set a new historical record
.

In the first half of this year, the dental medical field showed a super high ability to attract money.
Both the frequency of financing and the amount of financing have been rising
.

Artery network statistics found that a total of 33 financing incidents occurred in the oral primary market in the first half of this year, with a total financing amount of more than 5 billion yuan, the highest in history (the total financing for the whole year of 2018 was 3.

(Data source: Qicha, Arterial Orange Database Arterial Network Mapping)

In the secondary market, Angel Dental (06699.
HK), an invisible orthodontic treatment agency, launched on the Hong Kong stock market, causing investors to rush to buy it.
It soared by 132% on the first day, and its market value currently exceeds HK$70 billion.
In addition, Henlun Medical, Real Dental, China Oral circuit players such as Dental Medical Group have also submitted prospectuses
.

It is worth noting that Sequoia China, China Renaissance Capital, Jingwei China and other investment institutions have increased their numbers, indicating their continued optimism about the track
.

Take Sequoia China as an example.

Not only that, ByteDance, as an Internet giant, is also actively laying out the oral track
.

In the business of ByteDance's recent offline outpatient service-"Xiaohe Outpatient Clinic", dental cleaning and other oral consumer medical projects have become an important sector; in addition, Bytedance has also invested twice this year Oral care brands are mixed

The competition between capital and giants has made the oral track soaring.
It is expected that a large amount of funds will flow into the field in the second half of the year.
This will undoubtedly bring an important boost to the development of the oral track
.

Does the super-high heat this time indicate that the oral circuit is ushered in the eve of the outbreak? What are the new trends and changes? To this end, Arterial Network combs the status quo of the industry through the three dimensions of upstream, middle and downstream, and interviews related senior practitioners in the industry Investors, investors, etc.
, trying to get a glimpse of the answer to the question
.

Upstream: Digitization is a financing weapon, invisible orthodontics and FMCG brands become the focus

In the upper reaches of the oral cavity, the enthusiasm of previous years has continued, and digital-related corporate financing accounted for more than 90%
.

This is because the dental industry as a whole is still traditional, and the penetration rate of digitalization is still low in terms of equipment, consumables, and management processes
.

Therefore, digital transformation focusing on improving the efficiency of diagnosis and treatment has always been the direction of the industry

In terms of sub-categories, "invisible orthodontics" and "fast-moving brand" have become high-frequency terms for financing in the first half of the year
.

Since the investment logic and trends of orthodontic track and FMCG brands are different, we will discuss them separately in the following

Invisible orthodontics: digitalization accelerates industrial transformation, leading companies "lay down and make money"

There are two main ways of orthodontics, one is traditional metal brackets, and the other is invisible orthodontics
.

In the traditional way, metal brackets are cheap for orthodontics, but because the user wears them, it affects the aesthetics and has disadvantages such as metal worn teeth, which gives room for invisible orthodontics to replace
.

On the other hand, thanks to the blessing of digital technology, invisible orthodontics allows doctors to build a 3D model of each user's teeth, quickly and accurately grasp the real data of the oral cavity, thereby bringing a better orthodontic experience

According to the Insight Consulting report, in terms of retail sales revenue, the global invisible orthodontic market has increased from US$4 billion in 2015 to US$13.
1 billion in 2019, with a compound annual growth rate of 35%
.

The development of the invisible orthodontics market in developing countries dominated by China is the main reason for the growth of the global market: In 2019, China's invisible orthodontics market has become the second largest market in the world

What capital and enterprises value more is the super-high gross profit margin of invisible orthodontic products: based on high-tech barriers and continuous growth in the market space, the industry is highly concentrated, leading invisible orthodontic companies can "lie down and make money
.

" According to the prospectus of China's first share of invisible orthodontics, Age Angel, the company's gross profit exceeded 400 million yuan in the first nine months of 2020, with a gross profit margin of 70.

(Time Angel financial data, source: prospectus)

Higher barriers and good profit margins have made invisible orthodontic related companies frequently favored
.
It can be seen that the related companies that received financing in the first half of this year include Yaling Technology, Yuexiao Technology, Dijia Medical, Foursmile, etc.
, and a single round of financing generally amounts to nearly 100 million yuan
.

Of course, to start a business in this field, digging into technology is the key
.
Take Yaling Technology as an example.
Its advantage lies in the independent research and development of the hard-core technology of "root and bone analysis system" and "correction during diagnosis", which is differentiated from other brands.
Therefore, in less than two years, its brand "suitable" Meile has entered many large chain clinics in China
.

Of course, since invisible correction includes comprehensive disciplines in the five technical fields of orthodontics, computer science, materials science, modern intelligent manufacturing technology and biomechanics, it requires seamless grafting of technology and clinical practice, so the overall technical requirements and commercialization are difficult.

.
At present, this market is dominated by the Insimei brand under American Aiqi Technology, followed by Angel of Time, and the market share of other companies is still very small
.

In addition, the continuous penetration of invisible orthodontics relies heavily on talents who combine medical and industrial skills, and such doctors are relatively scarce
.
As a leading company, Aiqi Technology (Yinshimei) attaches great importance to the investment in the promotion of doctors.
The 2019 financial report shows that the sales and general management expenses of Aiqi Technology are as high as 43% or more.
The purpose includes publicity and training of doctors.
He helped doctors get customers and so on
.

However, with the increasing number of players entering the field of invisible orthodontics, industry competition has become increasingly fierce
.
In this process, the products have obvious technical barriers, and companies with downside pricing can make a way out
.

Fast-moving brands: aiming at the new generation of young people, oral care products usher in an outbreak period

In the first half of this year, the new consumer brand of oral cavity has attracted much attention, and the financing includes NYSCPS, Bingquan blispring, McKay Technology, and BOP
.
Among them, half and half of NYSCPS financed three rounds, and the last round of financing was nearly 400 million yuan
.

The reason behind the popularity is that the rise of a new generation of young consumer groups represented by the post-90s and post-00s has provided enough room for imagination for the development of new consumer brands
.
"Gen Z (the generation born between 1995-2009) has gradually become the decision-makers for paying for dental products.
Their escalating demand for beauty and health, picky taste, and choice of media and channels have all created a huge impact on the previous generation.
Differences
.
The grasp of their current choices and the shaping of their mental cognition will affect the brand choice of this generation in the next 20 to 30 years
.
" Huaxing Capital told Artery Network
.

"Specifically, the changes in the category structure show that oral care is changing from simple brushing in the morning and evening to diversified needs.
Therefore, the demand and acceptance of mouthwash, dental floss, tooth whitening patch and other categories are rapidly increasing
.
A category structure The migration path (that is, from the current toothpaste and toothbrushes accounted for more than 90% in the domestic market to 64% in the US market) has gradually become clear
.
"

Taking BOP as an example, its product line covers mouthwashes, mouth sprays, tooth sticks and other categories, while NYSCPS's products also include mouthwashes, toothpastes, oral sprays, tooth sticks, and tooth cleaners
.
This shows that new oral consumer brands need to have complete oral solutions in various scenarios to cover more people and increase user frequency and brand loyalty
.

From this point of view, the essence of the new oral consumer brand is a business based on model innovation, with the core layout in marketing and channels
.
For example, Mianban has a unique strategy at the marketing level: firstly, through the production of high-quality content, multi-angle and repeated propaganda to users to strengthen the alcohol-free formula and milder taste of the probiotic mouthwash.
At the same time Invite a large number of celebrities and KOLs from various channels to continue marketing, so as to quickly reach more users
.
After getting enough exposure online, the half-and-half will quickly roll out full-scenario and omni-channel channels offline, and use the accumulated online influence to quickly spread across the country
.

For example, in the sales channel, BOP's strategy is to focus on all online platforms, and increase user reach through high-frequency and mid-range customer order products
.
The official website shows that BOP is biased towards the mid-end in terms of pricing.
Its mouthwash and mouth spray products are both at RMB 30-40.
Currently, its online sales account for nearly 80%
.
After the online expansion, BOP is also accelerating the layout of offline, such as beauty collection stores, cosmetics stores, convenience stores and traditional supermarket channels, so as to achieve the closed loop of the overall online and offline sales channels
.

Observing the characteristics and gameplay of the new oral consumer brand, we can also see the logic of Bytedance betting on this field: Bytedance, which has a large number of users and traffic, has advantages in channels and marketing, so through the layout of a series of major New consumer projects that target young people can form an effective linkage with new consumer brands
.

"Different from cosmetics, the market concentration in the daily chemical field is usually very high.
Developed markets such as the United States and Japan have verified the concentration pattern in the oral care field.
CR2 (the top two companies in the industry accounted for 50% of the market).
We believe that China's top brands can also enjoy greater market share and longer-term brand advantages
.
" Huaxing Capital said
.

However, the ups and downs of some new consumer brands in the past also show that we can’t just focus on marketing and channels.
This will cause companies to spread the market on a large scale.
Once the overall reputation of the product is not good, it will cause the previous investment of funds and time.
All previous efforts have been lost
.
Therefore, new oral consumer brands must still adhere to the "long-term development thinking" and establish the overall closed-loop efficiency of products, brands, channels, and supply chains in order to go further
.

Midstream: Accelerating the integration of the supply chain, empowering dentists is the key

The oral midstream can be roughly divided into two types of players.
One is the enablers of traditional large-scale circulation companies represented by Sinopharm Dental and Songbai Investment, and the other is Lingjian, Fussen Technology, Eggplant Dental Cloud, Jiajia A new type of service provider represented by Worth
.
In the first half of the year, both types of players received financing
.

Although the business forms are different, the core of the two types of players is to empower and serve dental clinics and dentists.
Therefore, their business logic is to help companies improve management and operational efficiency, and strengthen the output of corporate culture and service capabilities
.

"The industry structure of the oral market is reflected in the long-term continuous fragmentation of the upstream and downstream ecology, which highlights the value of midstream integration and may create large companies on the vertical track
.
" Huaxing Capital said that the correct way to integrate midstream is to race the circle.
To scale up locally, it is necessary to make a difference in efficiency improvement and service innovation to form a complete empowerment solution
.

Specifically, Sinopharm Dental, which has just received Series A financing this year, has integrated the national channel resources of the oral industry, that is, midstream distributors, through the integration of the national channel resources of the oral industry, and formed links with the upstream and downstream, and then provided private dental clinics and medical care.
Chain finance, insurance, education, SaaS and other services to help companies grow
.

"We believe that the business model in the middle reaches of the oral cavity will definitely revolve around private clinics and professional dentists to provide three-dimensional and comprehensive services
.
Therefore, we have been in the front line and constantly understand the needs of dentists, so as to optimize and launch more products and services that meet market needs.

"Lv Sang, director and general manager of Sinopharm Dental, told Artery Network
.

Take the first dental whitening medical insurance product released by the brand "Ai Chi Yi" under Sinopharm Dental as an example.
It provides customized dental services for high-quality dental clinics across the country, provides oral health consultation with authoritative teams in public hospitals, and grafts the outpatient settlement system , Implement a process-oriented dedicated customer service team, and provide technical platform services for dental insurance, so as to build a closed loop of "consumer + clinic + service + insurance payment"
.

In contrast, Lingjian and Jaworth play differently
.
Lingjian, which received two rounds of financing within half a year, is not only in software services, but also in the industry's supply chain
.
In detail, the solutions provided by Link Health include single store and chain management, customer relationship management, outpatient management, hospitalization management, electronic medical records, purchase, sales and inventory management, financial management, insurance payment, image PACS, and customer SCRM intelligent marketing , A number of business intelligence analysis, etc.
, fully meet the needs of clinic operation and management
.
Up to now, Linkhealth has provided SaaS management software for more than 30,000 dental and medical aesthetic institutions, 80% of which are middle and high-end dental chain institutions
.

In terms of supply chain, LinkHealth Mall currently connects more than 300 upstream first-line brands and more than 10,000 SKUs
.
By opening up the shopping mall and the SaaS system for invoicing, expiration and batch management functions are provided at the key nodes of procurement and consumables and equipment management, helping clinics to reduce procurement costs, improve efficiency, and reduce losses
.

Look at Jaworth, which received financing in April.
It is positioned as an e-commerce platform for dental medical products, providing procurement and supply chain management systems, e-commerce and training social platforms for chain and independent dental clinics and equipment and consumables suppliers.
The products cover orthodontics, root canal treatment, direct and indirect restorations, office supplies, extraoral consumables, equipment and other categories, thus opening up the ecological chain of clinics, doctors, and suppliers, and empowering the operation and improvement of single dental clinics
.

"There is a trend now that everyone is connecting online and offline, and the core purpose is to better
empower.
" said Lu Sang, director and general manager of Sinopharm Dental.
"As the model gradually runs through, it will also Companies have come out one after another
.
With reference to overseas experience, in a relatively long period of time from 10 to 15 years, there is a high probability that 2 to 3 leading companies will emerge in the middle reaches of the oral cavity
.
"

In summary, although the two types of players have different paths, the ultimate goal is the same: to help dentists better start their own businesses
.
Therefore, as more and more players join, the future of oral midstream will compete with the comprehensive ability of enterprises to improve the overall efficiency of dental institutions
.

Downstream: The oral chain is heating up rapidly, and the problem of scale is still to be solved

Dental chain institutions are undoubtedly the industry’s top financing in the first half of this year.
Real Dental’s nearly 200 million US dollars in Series E financing, and Meiwei Dental’s over 1 billion financing, can all be used for the financing of the imported cavity industry in recent years.
TOP list
.
Although Malong Dental China and Happy Dental did not disclose the amount of financing, the collective financing of the top players in the industry proved the rapid rise in the downstream of the oral cavity
.

You know, for the chain institutions downstream of the oral cavity, the capital did not give much attention in the past few years
.
On the one hand, it is due to the lack of high-quality targets in the market, and on the other hand, it is because the scale problem of the dental chain industry remains to be solved
.

Take the IPO application of Riel Dental as an example.
The prospectus shows that Riel’s operating income will be 1.
08 billion yuan, 1.
1 billion yuan and 1.
515 billion yuan in fiscal year 2019-2021.
Revenue continues to grow, but losses are also increasing.
In growth, the three-year losses were respectively 304 million yuan, 326 million yuan, and 598 million yuan, for a total loss of 1.
228 billion yuan
.

After opening the breakdown of operating costs, it was found that the employee welfare expenditure in fiscal 2021 was 585 million yuan, accounting for 50.
9%
.
It can be seen that apart from other factors, the chain of dental medical services relies heavily on talents
.
It is not easy to continuously expand the number of outpatient clinics while controlling operating costs and achieving stable profits .

Real Group also stated in the prospectus that future success depends on the ability to retain, attract and motivate a sufficient number of qualified and experienced dentists who are supporting the expanding dental medical network and providing excellent dental medical services and The patient experience aspect is crucial
.

Although it is difficult to solve this problem, the overall consensus of the industry is: to improve human efficiency and reduce operating costs through digital means, and to bind dentists through a series of measures to retain talent
.

So after the completion of the E round of financing, Real Dental stated that in addition to continuing to open new stores, the other two directions for the use of funds are to improve the informatization capabilities of the clinic, and increase the reserve and training of talents, including the construction of some training bases and training systems.

.

Meiwei Dental, which has recently received more than 1 billion yuan in financing, gathers dental entrepreneurs and medical institutions through the characteristic "DSO" model, and continues to provide these institutions with strategic investment, standard output, medical technology improvement, brand management, digital transformation, etc.
Full-dimensional empowerment to help them achieve rapid and personalized development
.

Up to now, Meiwei Dental has nearly 200 dental clinics and hospitals and a team of high-quality business partners in the domestic core city circle, and the operating cash flow and profit of the past two years have been positive, which shows that Meiwei’s characteristic "DSO" "The model has run through and has been highly recognized by the market
.

Under the Meiwei dental business partner mechanism, the dentist boss becomes the manager of the new organization
.
Through the empowerment of Meiwei's characteristic "DSO" model, it not only helps dental medical institutions to solve problems, but also helps institutions grow bigger and stronger, and help them develop into regional leaders
.

It is not difficult to find that various dental institutions are solving the problem of dentist talents and the level of informatization, which will be the key to how explosive the dental chain will be in the future
.
Therefore, around these two aspects, the downstream chain of oral cavity still has a way to go
.

Summarize

In the first half of this year, the oral track was extremely hot, and the upstream, midstream and downstream have received good financing, which shows that the oral track has ushered in a period of accelerated growth
.

During this window period, Huaxing Capital believes that based on the continuous fragmentation of the upstream market structure, continuous product innovation, and the improvement of domestic technology and manufacturing capabilities, new brands, especially domestic brands, have given important opportunities-a future The core investment logic is domestic substitution
.
Under the theme of domestic substitution, the criteria for the selection of the target are: first, the incremental market opportunities brought by rapid growth; second, the foreign brands still occupy the majority share, while the domestic technology is fair and the cost-effective fields are typical, such as Implants and CBCT
.
In the field of orthodontics, it is difficult to easily shake the pattern of Hidden Beauty and Angel of the Times on the upstream side.
Therefore, we can focus on differentiated brands that attack through business model innovation and online and offline linkages
.

Looking at the middle reaches of the oral cavity, integration has become an irreversible trend, and the first few leading companies undoubtedly have the first-mover advantage.
After all, there are limited high-quality distributors and dental clinics (hospitals) in each region, and they are scarce that cannot be replicated.
Resources have a certain degree of exclusivity
.
In addition, companies that start with SaaS are also racing against time, because for B-side businesses, especially information-based businesses, the main point lies in the accumulation of data and in-depth understanding of the industry
.

Finally, looking at the downstream of the oral cavity, there will be more institutions entering the game in the future, but at the same time the overall reshuffle of the industry will also accelerate
.
The result of this is that the industry will have more and more medium and large chain institutions in the short to medium term, and small and scattered dental clinics will either be merged or closed down due to weak profitability
.
However, in order to form an ultra-large dental chain organization with thousands of stores and covering the whole country, leading companies need to continue to make efforts in informatization and talent attraction
.

With the crazy influx of capital, the oral circuit will undoubtedly usher in an explosion in 2021, and this trend will continue in the second half of the year
.
However, it needs to be realized that the fiery capital does not mean the maturity of the industry.
Therefore, companies need to continuously iterate their business models and accumulate technical capabilities in the changing market environment, and continue to pay attention to the quality of medical services in order to be stable and long-term
.