Pipo Saude, a Brazilian provider of healthcare services for businesses and their employees, has raised $4.6 million in a new round of funding to expand its footprint in Brazil.
“The company’s platform offers recommendations for the healthcare products that fit the team, enabling businesses to improve the quality of life of their employees,” said chief executive and co-founder, Manoela Ribas Mitchell. “We go all the way to the end beneficiaries.”
Pipo Saude helps companies price their insurance appropriately and bring down the medical loss ratio that companies suffer. Medical inflation in Brazil may be worse than in the U.S., with prices rising at around 20% per year.
Like the U.S., people in Brazil often default to hospitals and urgent care facilities when they’re sick or injured; that “urgent care culture,” as Mitchell calls it, drives up the cost for providers and employers. “We try to move the needle toward preventive care and specialist doctors,” Mitchell said.
Backing the company with a $4.6 million round are two of Latin America’s top investment firms — Monashees and Kaszek Ventures. OneVC, the San Francisco-based investment firm that also invests in Latin American tech companies, also participated in the round.
Pipo Saude makes money off of commissions and has a few corollaries in companies like Zenefits (in its earliest days), Amino or the Canadian care benefit management company, Mitchell said.
The company currently has about 30 employees on staff, and some of the new cash will be used to scale the business.
For co-founders Mitchell, Vinicius Correa and Thiago Torres, the healthcare market was an obvious choice when they looked to start their own company. Torres and Mitchell had known each other as students at the University of São Paulo, where they both studied economics. Mitchell and Torres both pursued careers in private equity, where Mitchell worked at Temasek and then at Actis, focusing on healthcare, while Torres also went to Agavia Investimentos.
Correa worked in startups, initially as an employee at Nubank, where he met Mitchell through a mutual friend.
While healthcare may be a tough knot to unravel — especially for a startup — the size of the Brazilian market alone is enormous. “We’re talking about a $50 billion revenue pool,” says Mitchell. “If we want to build a very robust product we have to focus on Brazil for quite a while.”