Why we invested in Pipo Saúde
Recently, ONEVC invested in Pipo Saúde, along with Kaszek Ventures and monashees. We are very proud and excited to partner with this team and assist them in building a category-defining company in the healthcare industry. As a General Partner at ONEVC, I would like to share the reasons why we are bullish on Pipo.
Pipo’s first offering is a platform that allows its clients to buy and manage healthcare benefits.
Pipo’s platform was designed to provide the best experience to businesses and their employees while providing a new distribution channel for health insurers and providers. With Pipo, it is possible to buy and manage health plans, dental plans, primary care, and wellness in a single platform.
Why we invested in Pipo Saude
1- The opportunity to disrupt a massive market that is stuck in the past
Healthcare is the second-largest corporate expense for every company in Brazil, second only to payroll. Even though companies spend millions on health benefits, they are still purchasing them from traditional brokers that don’t bring additional value despite having substantial margins.
Today the vast majority of companies in Brazil receive very little support from insurance brokers, who normally approach a company only to renew their contracts or offer a new plan that’s more suitable to the broker than the client.
It is a market that is not using contemporary business practices, with shallow use of technology, so that most of the time companies have no data on how their employees are using the benefits, or how they can create a culture of prevention within the organization in order to make the best use of the benefits.
These low-value intermediaries can be disrupted by any competitor that brings technology, efficiency, and a unique focus on customer experience to the table, and all of this added value — which usually does not lead to extra costs — is highly valued by the clients.
Pipo’s strategy to disrupt this vast market (estimated at US$ 100 bn) is to leverage technology and data to fight poor service, bureaucracy, and opaqueness while bringing more efficiency to the system as a whole.
“Although health is the most important thing in people’s lives, one of the most relevant costs of business, and a market of R$ 250 billion per year, there is no quality solution to help the HRs buy and manage health in the most appropriate way. We were born to change that,”
Manoela Mitchell, Co-founder and CEO of Pipo.
2- The world-class team of inevitable founders
The Pipo founding team, Manoela, Thiago, and Vinicius, combines three areas that we found determinant in making the investment: (1) health expertise, (2) operational skills, and (3) technological knowledge.
I’ve known Manoela, Co-founder and CEO, for over ten years, and we have always talked about her ambition to found a company. Over the years, we have had many coffees discussing ideas and prototypes for possible endeavors. Before founding Pipo Saude, Manoela was an investment professional at Actis and Temasek Holdings, overseeing investments in the healthcare space.
Thiago, Co-founder and COO, met Manoela at college when both were studying economics at FEA-USP. Since then, they have been in constant contact, considering possible ventures together. With an MBA from Insead, Thiago was an investment professional at Gavea Investimentos and Warburg Pincus.
Vinicius brought to the team immense knowledge of the technical side. Vinicius was one of the first employees at Nubank and saw the company scale from 50 to more than 2000 employees while maintaining the best-in-class level of product development and infrastructure.
3- A top-notch product, providing a unique experience to companies and their employees
Even though 70 percent of Brazil’s health plan users are corporate, the end-users are human beings who have difficulties knowing what to do or where to go in emergencies and who don’t know which benefits are covered or where they can be hospitalized. For their part, their employers cannot predict annual readjustments or assess whether their health plan is the best they can buy for their employees.
The market as a whole lacks transparency. Alignments between the brokers and companies are not sufficiently transparent, so it’s difficult for the client to understand if a plan is best for their needs or if it only advantages the broker.
Through technology, Pipo is able to reduce the cost of health for its customers, finding the products most suitable for their needs. Despite its short lifespan, the startup already has some emblematic cases: for one customer, the cost of their health plan was reduced by 55 percent, totaling a savings of R$ 12 million / year.
Pipo also helps its customers manage their day-to-day health benefits more efficiently, through its benefits management software, and provides the company’s employees with the best customer service, addressing their questions and offering guidance. In practical terms, this means HR has more time to take care of more strategic issues and spends less time on operational activities. End-users get more clear medical recommendations and a more humanized experience.
The realignment of interests between all involved — company, employee, and operator — and transparent communication generate opportunities for more informed use and lower costs.
4- The one-stop-shop vision
The rise of vertical players in the health industry brings greater efficiency to the market as a whole and better quality treatment since it is more specialized. In the future, there will be an opportunity to group all these services and be positioned as the aggregator that manages all these benefits.
The health brokerage sector has high rates of recurrence and adherence. By offering a new range of products at more attractive prices, Pipo is able to scale its business over healthy unit economics.
We strongly believe in this one-stop-shop vision for Pipo’s future. A future that has already started to materialize in the United States with Accolade’s IPO last week. We believe Pipo Saúde is the best-positioned player to capture this opportunity in Brazil and generate millions in the future for all stakeholders involved.
Arthur Brennand — General Partner at ONEVC
Arthur Brennand is a Co-founder and General Partner at ONEVC and co-leads the firm’s efforts in Latam. Arthur started his career in asset management as an investment professional at Berkana Wealth Management, an asset manager with U$ 1 bi under management, focusing on high yield investments across the globe. After that, Arthur worked with real estate investments at Iron House Real Estate, leading its efforts in hospitality and retail verticals. At that time, Arthur began making angel investments alongside his partners from ONEVC, mostly focused on the Brazilian market, and that became his passion and his future daily job. Before transitioning to ONEVC, Arthur was responsible for the Business Development and Sales team at Parafuzo, a leading home services marketplace in Brazil.
