Quip Secures $62.2M in Combined Equity and Debt Financing to Expand Oral Care Products and Professional Services

Recently, VCBeat (WeChat Official Account: vcbeat) learned from foreign media reports that U.S. healthcare startup Quip announced the raising of $40 million in funding. The total amount for this round of financing was $62.2 million, comprising a combination of equity and debt financing. The equity financing came from existing investor Sherpa Capital, while the debt financing was provided by Triplepoint Capital.

Quip, founded in 2014, is a healthcare company focused on oral health that designs and provides oral care products, recommendations, and services. The company’s vision is to start with better electric toothbrushes, enabling consumers to achieve oral health in a simple and enjoyable way. As the first company to launch a direct-to-consumer oral care subscription service, Quip delivers new products every three months and sends personalized oral care advice directly to hundreds of thousands of consumers. Currently, the company’s offerings include: ADA-sealed electric toothbrushes, dentist appointment services for recommended brush heads and optional toothpaste, ongoing oral health guidance, and incentives to encourage consumers to stay up-to-date with dental check-ups.

Image from the official Unsplash website

In July 2014, Quip, which had been established for three months, secured $300,000 in seed funding from five institutional investors. In the second half of 2015, Quip launched its angel round, raising a total of $1.4 million. In September 2016, Quip obtained $500,000 in debt financing. In November 2017, Quip initiated its Series A financing round, amounting to $10 million. In May 2018, Quip secured $10 million in debt financing from Silicon Valley Bank.

In the same month, Quip acquired Afora, a New York-based startup offering alternatives to traditional dental insurance, for an undisclosed amount. Afora will become part of Quip Labs, Quip’s newly established venture capital arm. The vision behind Quip Labs is to drive innovation in oral health products, platforms, and services, enabling startups to pursue bold innovations in dental health regardless of whether they are directly related to Quip’s core offerings. In October 2018, Quip partnered with U.S. retailer Target to launch its products in Target stores nationwide, thereby expanding its sales channels and market reach.

According to foreign media, upon completion of this round of financing, the company plans to leverage the funds to launch new products and specialized care services, as well as to expand its workforce and user base.

“I believe a combination of debt and equity is beneficial for us,” said Simon Enever, CEO of Quip. “Securing alternative financing has become more attractive than ever.” For instance, alternative financing methods allow founders to avoid unfavorable terms while raising additional capital that they might not be able to secure from traditional investors.

Regarding Quip’s strategic initiatives and efforts in the field of oral health over the past year, Simon Enever stated that Quip was founded to demonstrate that good design has a greater impact on oral health than quick-fix gimmicks. For Quip, 2018 was a significant year for growth and an important milestone.

“In the new year, you will see some new physical products that will expand into home care.” Given Quip’s relationships with dental suppliers, Simon Enever stated that customers are also demanding more affordable dental visits.

With new funding, Quip will launch a broader range of oral care products and services. The company has already begun implementing the first phase of its plan: expanding its offerings beyond electric toothbrushes and toothpaste. Simon Enever declined to provide further details, but media and consumers speculate that Quip is likely to introduce products such as dental floss, teeth whitening agents, mouthwash, and chewing gum.

“We founded Quip because people don’t pay enough attention to their oral health, or only visit the dentist when they experience tooth loss and pain. For patients, we aim to help them address all oral health issues by providing comprehensive routine oral hygiene services,” said Simon Enever. “On the other hand, for providers, Quip’s appeal lies in its being a large digital platform filled with engaged patients.”

Recently, Quip launched a practice program for dental service providers to offer low-cost Quip products to patients.

Sherpa Capital, founded in 2013, is a U.S.-based venture capital firm. The firm primarily supports promising emerging technology companies, helping them become globally beloved brands. Sherpa Capital is also committed to assisting its portfolio companies in hiring employees from historically underrepresented groups—including women, people of color, members of the LGBTQ community, and immigrants—thereby consistently putting its ideas and values into action through the companies it backs. The firm’s investments are predominantly focused on early-stage ventures.

TriplePoint Capital, founded in 1987, is a U.S.-based venture capital firm with a broad investment scope. TriplePoint Capital offers debt financing products, including equipment leases, equipment loans, and growth capital loans. The company’s equipment leases and loans are primarily used to finance manufacturers of equipment such as computers and servers, electronic test and measurement instruments, telecommunications equipment, laboratory equipment, and office furniture.