The coronavirus pandemic has disrupted many businesses. Data from the Brazilian Institute of Geography and Statistics (IBGE) released in July show that 716,000 companies have closed their doors since the beginning of the crisis in Brazil. While some strive for survival, others soar. Brazilian healthtech iClinic called the attention of one of the biggest names in technology: SoftBank placed its bets with a Series B round on the startup which is reporting tremendous growth – 400% comparing Q2 2020 over Q2 2019 – during the sanitary emergency.
Healthtechs are growing in the country: Brazil already has 542 of them, compared to 248 from two years ago, according to data from the latest Distrito Healthtech Report, obtained by Revista PEGN.
Founded in 2012 by Brazilians Felipe Lourenço, Leonardo Berdu, and Rafael Bouchabki to develop technologies and care in medical clinics using the Software as a Service (SaaS) model, iClinic says it has now more than 22,000 health workers under its solutions of electronic medical records, telemedicine, medical marketing, and billing management for doctors and small and medium-sized healthcare institutions in 50 medical specialties.
It is currently signing up almost 15 million unique patients to its basis. The company does not operate public health care, such as the Brazilian Unified Health System (SUS). The healthtech serves private health firms in Brazil, which cover about a quarter of 210 million Brazilians with health plans. To LABS, CEO Felipe Lourenço said he estimated that iClinic has a third of the patients with private health plans and insurance in Brazil.
iClinic: the first Latin American healthtech invested by SoftBank
SoftBank’s first investment in Latin America in health – in a deal whose value was not disclosed so as not to cause market distortions due to iClinic’s inorganic growth strategy – will be used for iClinic’s acquisitions in the coming months. Some of them are startups, others are already consolidated companies, and they will be purchased as a way to gain market share. “We already have conversations with more than 16 companies, some of them more advanced than others,” says Lourenço.
iClinic has already made three acquisitions, including the Brazilian division of Indian company Practo in March 2019. “When we look at acquisitions, we have been looking for companies with two profiles. One is to look at the basis that this company has, to see if it is a size that makes sense for us to buy its portfolio and add more market share. On the other hand, we also look for health technology companies, startups that have not only a base but have businesses that are synergistic to iClinic, that have products that we want to develop in the future,” he says.
The director of SoftBank Group International, Felipe Rodrigues Affonso, said that SoftBank believes that “iClinic is best-positioned to lead the digitization of the health care sector in Brazil”. He added that “it is at a turning point in the current pandemic and its platform offers valuable transparency, with the potential to dramatically transform the way people in the health ecosystem connect.”
The new investment will also be applied in iClinic in the development of other products, such as educational courses, and even financial services. “The idea is to create a digital hub for the doctor, making it easier for them to charge better and make it easier for patients to pay digitally, prepaying receivables and offering credit to this doctor”, explains the CEO.
Covid-19 boosted the Brazilian healthtech iClinic with telemedicine’s approval in Brazil
In the last two years, iClinic has doubled its revenue twice in a row. In June alone, the startup put 1,200 doctors into its platform, greatly driven by a drop in the volume of consultations in doctor’s offices and clinics due to lockdowns. “For the first time, doctors had time to interrupt their agenda and rethink their careers, they need to do it to differentiate themselves in the office, bringing technology to help. This represented an acceleration in the adoption of technology within the office”, says Lourenço.
In iClinic’s favor, there’s the new resolution of the Brazilian Ministry of Health allowing, this year, the telemedicine practice in the country. In 2018, the Federal Council of Medicine of Brazil allowed telemedicine in Brazil, but the resolution received criticism from medical associations and was revoked. “But at that moment we were sure that telemedicine in Brazil would become a reality very soon, and we started to prepare ourselves. Throughout 2019 we created our telemedicine solution, and when it was allowed, in March 2020, everything was ready”, he says.
From childhood friends to co-founders of a startup with expansion plans for Latin America
The history of iClinic goes back to Lourenço’s training in medical informatics, a science and computer engineering course focused on the market of health. The CEO says that during the training he realized that the independent doctor was disowned by the health technology market, which was concerned with creating and developing solutions for hospitals, laboratories, and health plan operators. “70% of doctors in 2012 still controlled these records and their schedule routine on paper, and the other 30% who already used some technology, used old solutions, in which the software had to be installed on the machine and the information had no connectivity to the cloud, it was restricted to the clinic”, he recalls.
Because of this, the three co-founders, childhood friends who already had two other ventures together, decided to create a platform to provide health through technology. “It was with this mission and purpose that we emerged. Today we have 110 people on the team and we are accelerating the opening of vacancies and hiring with this new investment”.
iClinic did not have an angel or seed investment round. Only in 2017 did the company raise Series A. “Throughout this trajectory [from 2012 to 2017] we believed that we needed to focus a lot on the product to seek the product-market fit and understand our customers in-depth. In 2017 we already had a lot of adherence to the market and we thought it was time to focus on growth”.
That was when iClinic talked to investors and funds and raised an infusion from the Moll family: the founders and controllers of Rede D’Or São Luiz, the largest private health group in Brazil. “Pedro Moll, one of the sons [of founder Jorge Moll] today sits on our board, that was our Series A round,” he says. The company has now received the Series B from the SoftBank Latin America Fund, after a negotiation that started in late 2019. The fund joins Filipe Lomonaco, former CEO of Estapar and other individual investors in the healthcare market.
According to Lourenço, “99% of the operations from iClinic are in Brazil”. As the tool is in Portuguese, it serves doctors from 750 cities in Brazil and other Portuguese-speaking countries such as Portugal, Angola, Mozambique, and Cape Verde. “We have not yet made an active internationalization movement, this is in our plans for the next 24 months”, he says.
According to him, among the next steps of iClinic, there is the most active focus on marketing and sales strategies to grow in these Portuguese-speaking markets, as well as the translation of the platform into Spanish to advance to some Latin American countries. “These countries have a private health market very similar to ours. There are countries in South America and Central America that would have a lot of similarity and adherence to our product”.