Dental Innovation Alliance: Venture Capital Reimagined

Dental Innovation Alliance: Venture Capital Reimagined | Image Credit: © Dental Innovation Alliance

Dental Innovation Alliance (DIA) is a unique investment firm built by more than 40 individuals and organizations dedicated to ushering in the next generation of dental innovation. Working to create positive change through technology, DIA has connected innovators and investors across the industry to improve practice performance and patient outcomes through competitive research and innovation. I spoke with cofounders and managing partners Doug Brown and Thomas Sharpe to explore the goals of this dynamic group and learn about its impact to date.

Lou Shuman (LS): Can you share some of your backgrounds in dentistry?

Doug Brown (DB): I started my career in finance. After that, I led and grew 2 national dental support organizations for more than 20 years, most recently as CEO and vice chairman of Affordable Care, d/b/a Affordable Dentures & Implants. In the late ’90s, I brought together several prominent dental industry leaders into a small study group, which over time grew and eventually led to the formation of the Association of Dental Support Organizations (ADSO). I have been both president and chairman of the Government Affairs Committee of ADSO, and currently serve on ADSO’s Executive Committee.

I met Thomas when we were chosen as co–vice chairmen for Affordable Care. We both saw a huge opportunity to invest in early-stage dental technology companies and began to lead the process to invest alongside several of our trusted industry colleagues. We then decided to take it to the next level by launching DIA in October of 2022, so that we could bring more investors in to scale this important work. We now have 11 professionals on the DIA team, and 34 industry investors, who collectively bring their diverse expertise and backgrounds to make DIA so successful.

Separate from DIA, in 2021, Thomas and I launched a successful nonprofit clinic and learning center, Local Start Dental, in Durham, North Carolina, which works closely with faculty and students from the nearby UNC Adams School of Dentistry, where I’m on the Dean’s Advisory Board. It serves underserved populations but is also a hands-on learning center for GPs [general practitioners] who wish to advance their clinical skillset into implants, surgery, digital workflows, and advanced prosthodontics. Local Start often has the first look at new concepts brought to DIA, which provides us with real-world feedback in the early stages of a company going to market.

Thomas Sharpe (TS): I have a business background and an MBA from Vanderbilt University and a law degree from the University of Oklahoma. I currently serve on the Innovation Investment Committee at Vanderbilt, which helps augment my work at DIA. After graduating from law school, I helped form a DSO [dental service organization] concept called DDS, which we successfully grew from eastern Oklahoma to 10 states in width and 52 units in size. We subsequently joined forces with Affordable Care, where Doug and I met. When the company was sold to a private equity firm in August 2021, we turned our knowledge, wisdom, connections, and financial resources to DIA.

Doug and I come from decades of operational roles and have an investor’s passion but with the scar tissue of veteran operators. We know the pain points and dynamics of dental offices and what it takes to operate complex companies, both DSOs and product and service companies that support them.

LS: Tell us more about DIA.

DB: DIA is a uniquely designed venture capital firm made up of a diverse group of investors—industry veterans, business leaders, dental clinicians, some of the largest global dental OEMs and distributors, a large DSO, and even the Florida Dental Association. This sets us apart from other venture funds that don’t have the scope of industry knowledge and connections that we do,and increases the chances of success for new ventures.

TS: I like to describe DIA as a rising tide that lifts all stakeholder boats. These stakeholders include the following: innovators, investors, end users of the innovation, patients who benefit from the innovation, and the dental industry overall. Through its network, DIA is leveraging its collective power to benefit all of them. Our pipeline is robust, with more than 1000 companies in our database, which is growing at between 30 to 45 new companies per month. This tells us it’s a good time for dental technology growth. It’s exciting!

LS: What does this mean for dentists? What’s in it for them?

DB: For dentists, it’s very difficult to keep up with all the innovations that are developing so quickly and so broadly. Dentists are—and should be—focused on patient care. It can be overwhelming for even larger DSOs with internal business teams to keep up with technology development at the current rate of new concepts coming to market. So, we view DIA as being a hub for information of all things relating to innovation. We have divided the dental technology industry into 40 vectors, and we have a mix of current and pending portfolio companies that fit into those vectors. We also conduct deep analysis into how potential competitors overlap and differentiate themselves. As we make investment decisions, we compare the advantages of certain companies over others, analyze which are competitively best positioned to succeed, and which have the best technology and approach to going to market. When provided to forward-thinking dentists, this research can help guide them and their teams to the services and products that can best improve practice efficiencies and patient outcomes. Many dental practices and group practices are highly leveraged. So, if we can help provide the information and guide dentists and group practices in making smart decisions about their technology choices, then we feel like we’ve elevated the profession.

LS: How are you different from other venture capital firms?

TS: DIA is pursuing a business model of venture capital [VC] reimagined. We are more deliberate in our investments than many other VC firms; specifically, we invest in a relatively small number of companies so we can use our resources to support each one more deeply.

DB: Simply stated, our strategy of being narrow and deep with our investments means fewer investments, more support, and larger checks. We also reserve significant investment dollars for critical second and third rounds of capital for our growing companies as they scale.

LS: What are some exciting investments?

TS: The world is taking notice of artificial intelligence [AI], and Pearl was DIA’s first AI investment. We’re happy to report that Pearl recently had a tremendous round—$58 million raised at a $400 million premoney valuation in a Series B funding in July 2024. The company noted that this funding marks the largest investment ever in dental AI. We’re very excited about its future.

DB: Another company that we are engaged with, Perceptive, has developed 2 ground-breaking technologies: 1. a new scanner and imaging system that uses optical coherence tomography [OCT], giving it the ability to capture 3D volumes of data — including below the gum line, through fluids, and under the tooth surface without exposing patients to ionizing radiation; 2. coupled with the OCT imaging, the company also has developed a robot that can complete crown and filling preps fast (targeting 5 minutes), safely and accurately. We are eager to see how this combination of advanced imaging, AI, and robotics evolves over time.

TS: Also important are developments in revenue cycle management [RCM] products, software that manages items from payment options and processing to dental plans to insurance verification and processing. Beyond the ever-present staffing concerns, one of the biggest pain points reported by dentists includes RCM.

DB: RCM technology is currently very siloed, and many dental practices are paying multiple subscription fees to several platforms, which involves considerable effort by staff members to learn and operate through this complexity and clunkiness. We see DIA constructing a conduit to ideally combine these technologies so they can work together as one de facto system, one integrated product, one subscription fee that ties into the practice management software systems. This will take some time, but with our knowledge and access to most of the SaaS dental products, we are in a unique position to help make this happen.

LS: What does the future hold?

DB: We want large group practices and individual dentists alike to view us as the world’s most innovative investment firm for supporting early-stage dental and health technology companies. We want to be at the center of the ecosystem for improving practice efficiencies, expanding care, and achieving better clinical results in dentistry.

TS: We are now developing DIA’s InnoCircle, a virtual community where members of the dental industry can share best practices and knowledge of the top emerging technologies. The InnoCircle will provide unmatched research on the most important innovative tech trends impacting the future of dentistry and be the connective tissue for dental professionals. This initiative is a key part of DIA’s strategy to position itself as a hub for innovation, fostering collaboration, and driving the future of the industry.

LS: What is the best way for practitioners and companies to get more information?

TS: Contact Tori Cockman at tori@dialliance.com to get in touch with us about DIA and how you can plug in. You can also follow DIA on LinkedIn, sign up for our monthly Dental Innovation Insights newsletter, and listen to our Bright iDIAs podcast.