Healthcare technology-based companies, the so-called health tech startups, gained momentum globally from 2014, when technology giants turned their eyes to the industry. By 2018, the volume of investments doubled globally, from $7.1 billion to $14.6 billion, according to data from the investment fund Startup + Health gathered by the Brazilian open innovation platform Distrito, in the ‘Distrito HealthTech Report’ study. In Brazil, Latin America’s most mature ecosystem, the number of startups in the segment has more than doubled in the last five years.
Globally, according to CB Insights data, there are 36 unicorns in the health segment, 20 of them in North America. The list of the most valuable companies in the region is led by Sumumed, valued at $12 billion, and Roivant, valued at $7 billion. In the second platoon are Intarcia ($3.3 billion), Oscar ($3.2 billion), Tempus ($3.1 billion), Goodpix ($2.8 billion), 23andMe ($2.5 billion), Adaptive ($2.4 billion). The other unicorns are in Europe (6), China (9) and Israel (1).
For now, Latin America has no unicorn in the segment, according to Distrito. But Crunchbase, the platform that gather records about startup investments worldwide, has identified at least 142 health techs in the region with high growth potential. Of this total, 61 would be in Brazil, 37 in Mexico, and 21 in Chile.
Gustavo Araujo, co-founder of the Distrito, notes that over the past five years, the number of health techs in Brazil has exploded: from 160 in 2014 to 386 in 2019, an increase of 141%.
“Two new health techs are created each week, in a similar way to transport applications four years ago. The sector should be consolidated in four to five years. The main segment is telemedicine, ” Araújo told LABS.
Inside Brazilian Health Techs
Regionally, the Brazilian Southeast has 60.6% of the health tech startups mapped by Distrito, followed by the South (28.7%), Northeast (7.8%) and Midwest (2.9%) regions.
Amure Pinho, president of the Brazilian Association of Startups (Abstartups), highlights the Sao Paulo ecosystem, positioned as one of the top 10 in the world by the Global Startup Ecosystem Report 2019, a report prepared by Genome. In this report, the health techs and fintechs segments were identified as the most promising ones. According to the study, the city has reached this stage because it has generated $ 5.1 billion in value in the ecosystem with $ 120 million in early stage funding over the past two and a half years.
Unlike in sectors such as finance and retail, health techs strike a balance between B2B startups (47.6%), dedicated to other companies, and B2C startups (39.5%), serving end consumers.
In terms of business type, startups focused on improving management and processes in clinics, hospitals and laboratories are leading the segment in Brazil, with 24.2% (92 companies) of the health techs mapped by Distrito.
Next, come information access startups (16.3% or 63 companies), marketplace (15.5% or 60 companies), pharmaceuticals and diagnostics (10.9% or 43 startups), patient relationships ( 8.8%, or 34 companies), telemedicine (8%, or 31 companies), medical devices (7.8%, or 30 companies), artificial intelligence and big data (5.4%, or 21 companies), and wearables and IoT (3.45 or 13 companies).
The 10 largest Brazilian health tech startups, highlighted by Distrito by criteria such as revenue, headcount, visibility (followers on social networks) and funding, are: Dr Consulta, Pixeon, Vitta, iClinic, Memed, GTplan, iMedicina, Semantix, Magnamed and Hi. The open innovation platform also featured other advanced traction stage health techs such as Proradis, CMtechnology, hobox, Laura, TNHhealth, Beep, Medicínia, Zenklub, PsicologiaViva, Anestech, Salux, Ventrix, ToLife, Tem and Neopropectc.
How they work and what pains they solve in Brazil and other countries
LABS talked to some of the mapped health techs to better understand how they are operating and what kind of pains are they solving in Brazil, Latin America and even Europe.
Memed, one of the top 10 in the District, is a prescription and also medical record aggregation solution via API that can be used for free by professionals across the country.
At the end of the consultation, patients receive on their cell phones a digital version of the prescription, containing a QR Code and various services that help with treatment adherence. Created in January 2012 by Rafael Moraes, Ricardo Moraes, René Moraes and Marcel Ribeiro, Memed has received investments from the angel investor Daniel Wjuniski and the venture capital funds Redpoint eventures, Qualcomm and Monashees.
“Through Memed’s Digital Prescription, we connect doctors, patients and pharmacies for an easier, faster and safer experience,” explains startup CEO and confounder Ricardo Moraes. “We have over 80,000 doctors and over 50 partners (hospitals, health plans and electronic medical records). Memed is remunerated through products created at the Digital Prescription (service) after pharmacy sells drugs to patients,” he explains.
PsicologiaViva, health tech highlighted by the District among those in an advanced traction stage, was born in July 2015, founded by Bráulio Bonoto, Fabiano Carrijo, Justino Paulo, Luciene Bandeira and Edinei Santos.
The startup allows online consultation with psychologists through a security-certified encrypted videoconferencing technology and a facial biometrics system. It serves large companies and healthcare operators and already has international operation in Chile.
In total, it has over 1.8 million covered lives and an average of 6,000 consultations per month. The startup teceived investment from Hospital Israelita Albert Einstein and had revenues of BRL 1.6 million in 2018–unlike other segments, health techs often receive investments from large healthcare organizations, which see statups as a way to innovate more and faster.
“We plan to invest more than BRL 1.5 million in technology, marketing and commercial (activities). The goal is to expand operations with healthcare operators and large companies, and increase the number of lives covered as well as the number of consultations by more than 200%, ” PsicologiaViva’s co-founder Edinei Santos told LABS.
Another startup invested by Albert Einstein Hospital through the Eretz.Bio, the hospital’s innovation center, is MedRoom, founded in January 2016 by Vinicius Gusmão, CEO, and Sandro Nhaia, CTO.
MedRoom’s solution reproduces the anatomical structure of the human body in virtual reality and allows the study of each part of the body using gamification concepts. The startup also builds and delivers simulations such as case studies and other types of immersion training for students and professionals. The focus is on clinical education.
The solution is used by Albert Einstein’s medical schools and six other Brazilian educational institutions, as well as two Mexican colleges and one in Paraguay. The business model is based on the annual licensing of the platform and platform content, as well as possible sponsorship for the production of custom simulations. In 2019, the company earned BRL 2.5 million.
As already mentioned, a quarter of the startups mapped by Distrito focus on process management and efficiency. One of them is Ninsaúde, created by Helton Marinho (CEO), Manuela Correa (CFO), and David Gusmão (angel investor), in December 2012. The company offers a web application with artificial intelligence resources to manage schedules, medical records, finance, agreement billing, CRM and other modules in one solution.
It currently has 1,500 customers and operates on the Software as a Service (SaaS) model. Besides its original operation in Brazil, Ninsaúde is also present in Portugal, Mexico and Spain. It received angel investment and input from Elife, a global consultancy firm specializing in market intelligence and digital relationship management.
“Let’s think about upcoming rounds for 18 months from now. With the entrance of Elife, we will set up distribution points in all Brazilian capitals,” Helton Marinho, CEO at Ninsaúde, told LABS.
Among those with a B2B business model, but also with end-user products, is Bio Apps. Founded in 2015 by Carlos Braga and Leonardo Vianna, the health tech began operating in March last year. It offers a mobile application for the user to enter various health data, with information ranging from from eating habits to medicines usually taken. The information is received in real time by a health team, made up of doctors and nurses, who work interacting with the user, remotely solving the problem, through Health Teleorientation, or directing the person to health services.
The startup is paid for monthly packages, for each monitored life. “We subsidized a portion of the monthly fixed amount, which we recovered with a profit sharing. The mobile app serves as a communication link between the user and the healthcare team, with people taking care of others 24 hours a day, seven days a week. We already have 14,000 monitored users,” says Carlos Braga, co-founder of Bioapps.
Translated by Fabiane Ziolla Menezes