Steadily growing investment in the dental sector is driving professionalization, including advances in technology solutions that enhance the patient experience while streamlining operational and clinical workflows.

Here, senior bankers from the Harris Williams Healthcare & Life Sciences Group share their thoughts on tailwinds propelling investor interest in dental technology, the areas of dental tech that are revolutionizing the way dentists provide care, and investor opportunities in the dental tech space.

Key Takeaways

• The size, growth, and fragmentation of the dental sector are fostering significant opportunities for dental technology businesses.

• Patient engagement, practice management, and AI and data-driven care are three specific areas with significant growth potential.

• Investors are seeking sustainable business models that offer tech to support operational scalability, drive patient acquisition and satisfaction, improve quality of revenue, and minimize overhead costs.

Technology Is a Key Differentiator

The $136 billion dental sector is growing more than 6% annually and offers significant untapped white space that could spur even greater growth potential.¹ The dental service organization (DSO) model has proven to be highly effective in supporting dentists while providing investors with tangible growth vectors to create long-term value. In fact, the sector now includes more than 100 PE-backed DSO platforms. However, despite the number of scaled DSO platforms now present in the sector, more than 90% of dental practices remain privately owned.²

“Investors love DSOs because the fragmented dentistry sector offers significant opportunity for professionalization and consumerization,” says James Clark, a managing director. He adds that DSOs can contribute specialties and ancillary services, providing additional growth options. Furthermore, dentistry has recession-resistant demand and a “healthcare-light” reimbursement profile, both of which appeal to M&A investors.

Dan Linsalata, also a managing director, notes that many dentists join a DSO because it allows them to focus on patient care rather than being bogged down in administrative burdens. In addition, DSOs can help recently graduated dentists more quickly overcome student loan debt. They can also provide an opportunity for greater equity appreciation as part of a scaled platform.

The significant momentum of the DSO model is underpinning accelerated demand for dental technology on several fronts. Technology is revolutionizing many areas, from practice and revenue cycle management to patient engagement, clinical workflows, payer services, and data-driven care. Competition, consolidation, and platform professionalization are driving DSOs to look for ways to simplify workflows, build patient loyalty, and maximize revenue. 

Smaller practices not affiliated with a DSO often seek the same advances, creating incremental opportunities for technology providers. In fact, many such practices are eager to compete more effectively with large, sophisticated dental businesses, fueling demand for dental tech solutions.

Three Areas to Watch

Patient engagement, practice management, and AI and data-driven care are three specific areas with significant growth potential.

An Opportunity With Teeth

Leading DSOs are finding technology enablement across their operations to be increasingly critical to a winning strategy. These strong tailwinds are driving significant investor interest across dental technologies.

Those investors are focused on sustainable business models that offer tech to support operational scalability, drive patient acquisition and satisfaction, improve quality of revenue, and minimize overhead costs. Dental tech businesses with differentiated capabilities in these areas should continue to experience intense interest from growth-oriented buyers.

To learn more about the dental technology sector landscape and investment opportunities, contact Harris Williams senior bankers or download our latest report, “Dental Technology: Opportunities to Optimize Dentistry.”

1. Stax

2. Harris Williams Analysis