LAVCA surveyed 36 healthtech startups in Latin America on the impact of the Covid-19 pandemic on their businesses, on adoption of healthcare technology and on access to healthcare services.
Sponsored by the IDB Lab, the 2021 LAVCA Survey of Latin American Healthtech Startups is a continuation of our 2019 Inaugural Survey of Latin American Startups, and is a companion to our 2021 Survey of Latin American Edtech Startups.
Healthtech has been an under-capitalized but promising area of tech innovation in Latin America in recent years, until it emerged as a key sector of VC investment by deal count in 2019 (second only to fintech), although still representing only a fraction of total VC dollars invested. Entrepreneurs are innovating to drive increased access to healthcare across the diverse markets and constituents they serve. This survey highlights their progress.
>> LAVCA Members can log into their accounts to access the list of participating startups and disclosed transactions.
Covid-19 Effect on Growth: Half of 36 participating startups said that the pandemic has had a positive effect on their business growth and their cash runway. Most (28 of 34) are planning to raise capital in 2021.
Job Creation: 35 out of 36 startup respondents have created over 2,700 full-time jobs in the region (avg: 80 employees per startup; median: 18.)
Workforce Gender Diversity: 15 of 36 responding healthtech startups (42%) are women-led (woman CEO or co-founder). More than 70% of responding startups are near or have surpassed gender parity in their workforce, women account for 40-60% of full-time employees at 16 of 36 startups surveyed, and over 60% of full-time employees for an additional ten startups.
Access to Healthcare: The healthtech startups LAVCA surveyed are producing solutions for constituents across the healthcare spectrum, serving public and private sector hospitals, and offering a range of services including pediatric care, elderly care and post-acute care.
LAVCA thanks the following startups for participating in our survey of healthtechs during the pandemic. Of 36 respondents, 15 (42%) are women-led, and three (8%) are registered B-Corps.
# = Women-Led (CEO or Founder/Co-Founder)
Eolo Pharma #
Medica Santa Carmen
Nilo Saude #
Pipo Saude #
Who Responded: Most responses (34 of 36) were from C-level executives. 80% were from CEOs.
Repeat Founders: Half of respondents (18 of 36) had previously founded a startup.
Almost all of the startups surveyed (33 of 36) have raised third party capital. Early stage dominates: Among respondents who provided further details, 23 of 30 have raised a seed or Series A round.
Only Brazil-based fitness discovery platform Gympass has raised beyond a Series B, closing a USD300m Series C in 2019 from General Atlantic, Valor Capital, SoftBank and others.
Capital Mix: Responding startups have raised a mix of capital from investors including Latin American VC funds (65%), family offices (33%), angels (68%), accelerators (29%), and the founders themselves (26%).
BARRIERS TO GROWTH
Most responding healthtech startups (28 of 34) are planning to raise capital in 2021. Despite the rising demand for tech-enabled healthcare services during the pandemic, the healthcare sector itself, and its regulations, continues to present the most significant barrier to growth for these startups.
Barriers to Raising Capital: When asked about barriers to raising capital, more than half of respondents (17 of 30) said the healthcare sector itself presents the largest challenge.
Limited access to investors was also a significant challenge for most respondents.
Regulatory Challenges: When asked about regulatory barriers to growth, respondents said that healthcare sector regulations, data privacy regulations and payroll were the top three concerns, followed closely by taxation and compliance regulations.
Cuidas: “The biggest barrier used to be regulators who were trying to protect doctors from living in a competitive world. Now, Pandora’s box has been opened, and users are becoming increasingly more averse to visiting urgent care or emergency rooms and instead are enjoying being cared for from the comfort of their homes or workplace. It’s not only about convenience, but also about cost and the risk of exposing oneself to infectious environments.”
SleepUp: “Conducting remote healthcare services is a big challenge in Brazil due to the lack of system digitalization, regulatory frameworks, and patient acceptance of new technologies.”
EXPANDING ACCESS TO HEALTHCARE
The healthtech startups LAVCA surveyed are producing solutions for constituents across the healthcare spectrum, serving public and private sector hospitals, and providing a range of services, including pediatric care, elderly care and post-acute care. In addition, 13 of 34 respondents (38%) have incorporated a direct-to-consumer (D2C) strategy to their business.
“Other” includes healthcare services for HR departments, health insurance operators, female-care patients and pharmacies.”
Measuring Impact: Half of responding startups are measuring their company’s impact on access to healthcare. But in part due to the range of healthtech startups, go-to-market strategies and audiences served, there is no consistent set of KPIs or benchmarks among them. These startups are using a range of measurements, including number of low-income patients served, travel time to the nearest clinic, decrease in number of in-person medical visits, number of consultations and access for uninsured patients.
Cuidas: “Before Cuidas, 47% of our users did not have health insurance and used to solely rely on public hospitals for their care, waiting an average of 90 days for an appointment. Now they have unlimited access to Cuidas primary care doctors and nurses during business hours, and are able to be seen on the same day.”
hCentrix: “Through aggregate health population management, health plans can improve their resource allocation and personalize each patient’s journey, ultimately delivering better treatments at lower costs.”
Manipuale: “As a proxy for access to healthcare services, we are focused on measuring the total geographic area covered by our marketplace services, as well as the total number of enlisted pharmacies and active end customers.”
SocialDiabetes: “We are focused on reducing the number of physical visits to doctors by 50%, and reducing clinical complications by 30%.”
Theia: “We decided to focus first on developing products catering towards improving women’s access to healthcare in Brazil. Once we feel we are serving this segment properly, we will think about expanding to a larger audience.”
Vitalk Health: “We have lowered the cost of mental health services by roughly 5x when compared to traditional therapy services. Vitalk Health also provides a free version of our services to increase access to a wider range of the population.”
Zenklub: “We are interested in measuring the number of clients that had never been to therapy, or taken any therapeutic service before using Zenklub, as well as the impact of our services in the average monthly earnings of the professionals in our platform.”
THE COVID-19 EFFECT
1DOC3: “We saw monthly consultations go from 3,000 in February 2020 to 45,000 in December.”
Animo Wellness: “We were about to pivot from a purely digital model to an omnichannel model that included physical locations just before the pandemic. With C19, we had no choice but to abandon that pivot and double down on the purely digital model, [even though we] realized that Brazil had a long way to go before a purely digital solution could be effective.”
Cuidas: “Our original business model was focused on in-company care. When most companies adopted a home-office dynamic, the in-company model became nearly irrelevant, so we lost some clients who did not wish to continue having their in-company clinic and others who were facing serious financial struggles. After having launched a new 100% virtual primary care service, we have been able to attract and retain new clients who want to care for their employees remotely but cannot financially afford full health insurance.”
Gympass: “We now offer mental health and nutrition resources alongside the fitness resources we offered before. We believe that wellbeing must be omnichannel, delivered virtually, in person, on-demand, and live. In the long run, we believe this approach will help democratize wellbeing even further.”
Medica Santa Carmen: “Through our strict C19 protocols, we were able to remain open and serve new patients that were denied care in other health centers or that had to relocate due to closing dialysis facilities.”
Pandemic Relief: A number of responding startups also shared information on pandemic relief efforts they supported.
Entelai: “We adapted our AI platform so doctors were able to detect C19 symptoms using chest X-ray images, and we made the technology available for free.”
Farmalisto: “We led an integral C19 vaccination program to support the Colombian government and other public institutions vaccinating the population in areas such as logistics and providing infrastructure for ultralow temperature conservation, as well as offering additional vaccination premises and GPS-monitored transportation.”
Levita Magnetics: “We partnered with UCSF to conduct a clinical trial in Chile to develop a nasal spray-based treatment for C19.”
Nilo Saude: “Nilo launched a free B2C pilot to treat elderly patients in their houses during the first six months of the pandemic.”
Theia: “Theia opened a C19 resource center with a robust set of articles widely available to the public, as well as extended the company’s services to offer a 24/7 chat with a healthcare professional.”
Unima: “During C19 we developed a new saliva antigen test for SARS-CoV-2, which validated Unima’s ability to quickly develop specialized testing kids in a short period of time.”
Where Healthtech is Heading: Healthtech CEOs weighed in on what the pandemic has changed for the better for healthcare innovation.
Animo Wellness: “We believe that one of the largest opportunities is in the area of prevention, especially as data shows how C19 has disproportionately affected unhealthy people compared to those who proactively had been taking care of themselves. We believe that there will be a fundamental shift in demand for health, leading people to build new habits in exercise, nutrition and sleep. Most people in Brazil are still struggling to adopt new, more complex digital solutions, and consumers’ perception of the value of a purely digital solution is still much lower than it it’s physical alternative.”
Cuidas: “[In Brazil], we learned 2 years ago that 69% of all health records in the country were still on paper. The C19 reality was the catalyst the health industry needed to embrace true innovation and disruption. We expect telemedicine to become the most adopted means of care delivery within the next two years. We have also witnessed the increased interest in mental health. Social isolation has certainly contributed to the aggravation of mental health issues, which already account for most of the health demands of our current users and clients.”
Entelai: “In the long term, the C19 pandemic will help tear down myths and barriers about the quality and effectiveness of teleconsulting and teleservices.”
Gubler: “Widespread adoption will need a new regulatory framework and incentives for the general population to understand that someone needs to subsidize their medical treatments, which in the private sector are now mostly covered in full by the patient himself or the insurance companies.”
Gympass: “We believe that preventative care is the main opportunity for healthcare disruption moving forward. Making everything more accessible and engaging – from mental healthcare, to nutrition and fitness – presents an amazing opportunity to help more people feel happy and healthy.”
HuliHealth: “The main challenges for remote healthcare are reliable access to the internet and patient confidence. People tend to prefer talking to medical professionals in person. Sometimes people also lack enough privacy in their homes to openly discuss issues with their healthcare providers.”
Levita Magnetics: “While surgical procedures can’t be done safely in remote capacity just yet, we believe the follow-up consultations for surgical patients can safely be carried out virtually. This will be a key driver in the growth of teleconsultations.”
Manipulae: “Investing in API connections, and integrating with other health market players to enhance synergies and get more (and faster) access to the market, will be one of the key growth drivers for healthcare after C19.“
Nilo Saude: “One of the key drivers in healthcare services adoption will be the scalability of virtual care programs. Many startups will create care delivery models, but only a few will actually be able to engage patients on a long-term basis.”
Salux: “We believe that interoperability can help scale the level and quality of healthcare services. We recognize the importance of integrating our services with other healthcare providers in the market in order to make the ecosystem work.”
Unima: “One of the main areas of opportunities in healthcare will be the normalization of telemedicine services, and the increased sophistication of disease surveillance. Regulation is quickly changing, bringing the possibilities of diagnostics outside of the labs and closer to the end user.”