With more than 200 million people, Brazil is the largest country in South America and the fifth largest country in the world. This translates to a lot of healthcare needs.
Driven by the size, local needs and a growing innovation market, Brazilian health tech startups are beginning to emerge. The Brazilian market is unique for startups as it has both a public system, which serves everyone, and a private sector that patients can pay for.
“We have many common problems [including] interoperability and privacy. Of course, Brazil is very particular. We have a huge country,” E-VAL Saúde Director Luis Gustavo Kiatake told HIMSS TV earlier this year. “São Paulo [alone] is almost a country. But at the same time, you have some distant places you need to cover. You have infrastructure problems, for example, telecommunication problems and places the doctors do not want to go because it is so far away. Technology is a good tool to cover distant places."
Startups in Brazil are now looking at the international market. The government’s Apex-Brasil branch for business promotion, the ministry of economy, ministry of foreign affairs and other government agencies have created a new program to foster startups to help them get going internationally.
“StartOut Brasil is a program we are doing here and is a program to insert and promote Brazilian startups in a global innovation ecosystem,” Paula Gomes, internationalization coordinator for Apex-Brasil, told MobiHealthNews.“So why are we doing this? We identified that in Brazil we have a lot of tech startups. Not only startups as a new business but as a tech new business, and we wanted to promote them abroad because Brazil has a huge market and usually the companies start in Brazil and keep working only in Brazil. But what we realize is ‘Hey people, you are ready to go abroad. You have a lot of innovation and products. You are so competitive that you can be abroad.’”
While there are more Brazilian health tech companies emerging onto the global stage, Latin America is still lagging behind North America, Asia and Europe when it comes to digital health funding. Based on publicly available sources, StartUp Health reported that, since 2012, South American digital health companies have raised a total of $31.9 million in funding. Of that, $29 million comes from Brazilian companies. To put that in perspective, StartUp Health recorded over $8 billion in digital health funding worldwide in 2018 alone.
However, stakeholders have had their eyes on Brazil’s growing digital health market for the better part of a decade — a PricewaterhouseCoopers (PwC) report predicted back in 2012 that the country would have a $46.6 million health app market by 2015.
StartOut is aimed at helping these companies develop in order to get the attention of those international investors.
“We offer to them international pitch training. They do pitches in Portuguese and for the Brazilian mindset. So, they have to train them to do pitches for an international investor, international accelerator,” Gomes said. “They have to adapt their pitch for global realities and not focus only on Brazilian realities. The pitch training is not only language — it is to train them how to pitch for an international investor because it is a different mindset and, in many cases, they don’t know the reality in Brazil.”
The landscape at home
While StartOut Brasil is angling to promote companies internationally, startups still have a major local market to get their feet wet.
“Brazil has an integrated system of health. So absolutely Brazilians can go to a public hospital and have treatment for free,” Gomes said. “Even if you are not Brazilian and you are on vacation in Brazil and you need medical assistance, you can go to a public hospital and get medical assistance for free. Even if you are a tourist in Brazil. So, it is a really, really huge health system in Brazil. It [has] made [it] possible to create many services and medical devices and technical equipment and everything related to health as you have such a huge health ecosystem in Brazil.”
Gomes said that for the most part health startups are hatched at universities, and then move into the market. A good portion of those are either biotech or pharma, according to Gomes, but all of these startups must make decisions about starting in the private or public sector.
“We have always gone to private first. It’s easier,” Roberto Figueroa, founder of Portal Telemedicina, a Brazilian digital healthcare company, told MobiHealthNews. “You don’t have that much bureaucracy. And after four years of developing and being robust and secure and with a lot of huge partners, then we started public.”
However, once startups decide to go into the public sector the market scope is a good deal larger.
“Our experience [is mainly] in Brazil. We had a major bid with the government of São Paulo. We are going to integrate 35 million citizens and all these data into the same database for the government,” Figueroa said. “So, this is going to make us robust enough to try an English-speaking country. After this we are going to do business with a major country like the US.”
Technologies at play
Many of the startups have formed around solving local issues, and are now hoping to scale globally.
Figueroa’s company is aiming to help connect patients to specialists. While the technology is used in cities and the countryside alike, it has addressed some unique challenges in the country. For example, in the past Portal Telemedicina’s technology was employed to get care to indigenous communities in the Amazon, where doctors are scarce. The technology allows local health workers to perform the exam with the assistance of a virtual doctor.
“We are a B2B company; we connect to clinics, hospitals, companies and governments. We connect those clients to specialist doctors like cardiologists, neurologists. We have a platform that integrates directly with medical devices,” Figueroa said. “So, ECGs, EEGs, spirometers. We are doing that so the nurse only has to do the exam. So, she just needs to perform the exam on the patient.”
Portal Telemedicina is now taking lessons learned from its work in Brazil and expanding to markets with similar issues or problems.
“We started with France and we understood there [that] they have the same problem — all the doctors are in Paris,” he said. “Elsewhere they don’t [have as many] cardiologist, neurologists and medical specialist. So, we could at least provide this there.”
Mental health is another area where Brazilian startups are starting to look. While there is public healthcare, spending is still relatively low on mental health services, according to The Rio Times.
In September Brazilian startup TNH Health raised $2 million in Series A funding from Valor Capital and individual health entrepreneurs for its AI chatbot.
“It is impossible to address the gaps in primary care and mental health in Brazil without applying technologies like [AI]” CEO of TNH Health Michael Kapps, said in a statement at the time of the announcement.
Another digital mental health company dubbed Cingulo is working on a mental health focused assessment and digital tool.
“Now we are growing more in the B2B space. Companies are really feeling the pain of mental health,” Diogo Rizzato Lara, CEO and founder of Cingulo, told MobiHealthNews. “Mental health consultations and meeting with a psychiatrist or psychologist have grown around 30% in the last two years in Brazil. Most companies are really looking at this problem now.”
Today Brazil is still very much an emerging market. However, some are seeing it as ripe for future opportunities. Last year a report from Liga Insights found that there are 263 Brazilian startups focused on health innovation.
“Maybe Brazil is a new ecosystem that investors can be much more profitable [in] than going to a crowded space,” Gomes said.