Network Effects & Switching Costs in Intraoral Scanner Segment
Updated: Dec 14, 2021
Medit Corp. continues to revolutionize the intraoral scanner category – driving the segment globally. The company’s valuation doubled during FY 2019/20 and doesn’t exhibit any signs of slowing down anytime soon. H1 20 Japanese PE Group - Unison Capital acquired fifty percent stake in the company – valuing the company at USD 540 M. The Medit Corp’s revenue mix in terms of geography is highly global (>70% of revenue outside APAC).
The brand’s rise to the pole position demonstrates how a relentless focus on new product development may turbocharge category growth. The brand promise doesn’t represent just an intraoralscanner, but rather a better way of practice digitization & patient communication, at an attractive price point. The IO scanner is not a new category of course. However, Medit’s brand promise is about faster innovation cycle with strong network effects.
Underlying this growth story are the organization’s strategic pillars including network effects – that make the brand more valuable as the userbase continues to grow, compounded by Medit’s relentless focus on developing new Apps and its AI engine that continues to get better with each scan.
According to a recent survey, existing intraoral scanner users are shying away from examining other competitive products available in the market due to – unwillingness to change existing workflows as well as high switching costs (see graphic). Just like up to 23 percent of AAPL’s total revenue can be attributed to the App store, likewise the growing userbase of Medit users is building a strong business case for future earnings – potentially relying on its own Apps as well as third party API enabled suites.
As Medit Corp. continues to surprise users globally with their faster innovation cycles, the string of PE Groups battle it out in private markets to acquire any stake in the K-company.