This start-up is using connected toothbrushes to overthrow the ‘primitive’ dental insurance industry

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Alex Frommeyer comes from a family of dentists. Now, he has a start-up that sells dental insurance, but with a twist.

The Columbus, Ohio, company, called Beam Dental, started out by selling Bluetooth-connected toothbrushes, meaning that their product communicates with an app.

Once they got people using it, the founders saw an opportunity to use more than a year’s worth of data they collected to move into the dental insurance market. The idea is to figure out which of their users are regularly flossing and brushing their teeth, and therefore less likely to run into expensive problems like root canals and cavities, and offer them cheaper rates and other incentives.

That insurance product, which is now available in 16 states, earned the company a fresh round of $22.5 million in financing led by Kleiner Perkins.

That puts the company’s total funding at more than $30 million.

Customers who sign up for Beam’s plan get shipped a connected toothbrush plus a regular supply of things like floss and replacement heads. Those who opt-in to use the smart brush — and share that data with the app — can get a lower rate on their premiums.

The company stresses that it doesn’t share the data about its users’ brushing parties with third-parties.

For Kleiner, Beam represents an opportunity to crack into a lucrative corner of the medical insurance market. As Frommeyer puts it, dental involves “significantly fewer regulatory and network headwinds,” than traditional health insurance.

Lucas Swisher from Kleiner, who’s joining the Beam board as part of the investment, estimates that the dental market is worth about $78 billion. The firm believes there’s an opportunity for entrepreneurs to differentiate themselves from incumbents by focusing on technology and the consumer experience.

“When I think about places that haven’t been touched by technology,” adds Noah Knauf, a general partner with the firm, “I think of dental insurance, which is primitive.”

The dental insurance market is currently dominated by Delta Dental, United Healthcare and other insurance behemoths. But in recent years, a handful of well-funded technology start-ups have emerged in the space from Beam to SmileDirectClub. Many of these are focused more on cosmetic issues, with 3-D printed aligners to straighten teeth, rather than on insurance, by that might change in the coming years.

Both Kleiner and Beam declined to disclose the company’s revenues, or its most recent valuation.

But Frommeyer did say that the insurance product has expanded to more than 1,000 small to medium-sized businesses, giving it a steady supply of revenue. The contracts are typically signed on an annual basis, he said.

By the end of the year, he said, the company hopes to expand to 35 states.

Kleiner’s partners intend to remain active in the health-technology space, despite reports that its life sciences partner Beth Seidenberg will step down from her role at the firm to start her own fund.

Knauf has extensive health sector investing experience, and the company also still works closely with veteran health investor Brook Byers, as well technology investor John Doerr, who’s increasingly investing in health.

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