Headline has been investing in Brazil since 2013 and we are excited to share more about one of the newest B2B software companies to join our portfolio in the country. We recently shared our perspective on why now is the time for vertical software to shine, and Fin-X is bringing that to life in the health sector in Brazil.
Brazil's healthcare sector presents a promising opportunity for innovative solutions in vertical software to transform the industry, not just in the country but beyond. While the health sector has traditionally faced challenges with inefficient communication and coordination among stakeholders, the emergence of health-tech startups like Fin-X is changing the game. By providing a centralized platform that streamlines the surgery scheduling and payment process, Fin-X is bringing much-needed transparency and efficiency to the sector. Its scalable B2B model caters to hospitals, physicians, and health insurance companies, while its value proposition of reducing informational asymmetry has garnered significant interest. We’re excited about the potential of vertical software to transform the health sector in Brazil and proud to support Fin-X in its mission to empower healthcare providers and improve patient outcomes.
Brazilian Health Sector
The health sector is vital to the Brazilian economy. It accounts for 9% of the country’s GDP (R$ 915 billion).
There are 4 key players in the health sector in Brazil:
Hospitals: Provide the infrastructure so physicians can take care of their patients. They work as regular businesses, aiming to decrease their idle capacity and boost the most profitable services.
Payers: Normally offered as a worker’s benefit, they pay (fully or partially) for procedures included in a worker's healthcare plan.
Health Brokers: Intermediaries between payers and Human Resource departments. They help HR departments and manage the best healthcare services.
Physicians: Professionals qualified to practice medicine. They bring customers to hospitals and may choose to accept payments from healthcare plans or directly from patients (out of pocket).
A long-lasting problem of the health sector in Brazil is that those stakeholders inefficiently engage with one another. Emails, phone calls, mail, fax, and outdated/isolated software are the primary means of communication.
This lack of transparency leads inevitably to bad business. Disorganized and decentralized communication induces significant idle capacity in hospitals (~25% in private hospitals) and long periods to receive payments (~74 days in private hospitals), directly impacting the profitability of all stakeholders involved. This issue is common among all areas in health services (vaccines, regular appointments, exams, etc), but is especially harmful for the surgery sector, which represents a surprising ~65% of big hospitals' revenue and ~80% of EBITDA.
Surgeries are the beating heart of the health sector in Brazil and we are proud to lead Fin-X’ R$ 7.8M Seed Round.
Where does Fin-X enter?
Fin-X is a health-tech startup that orchestrates the information and payment among all players of the surgery cycle. Daniel and Sergio started Fin-X in 2017 as a B2C SaaS focused on Brazilian physicians. The idea came while Daniel was helping his brother manage his finances as a physician. It was astonishing how ineffective the financial management of his brother and many of his peers was. Progressively, it became clear that this was not only a problem for physicians.
Since then, Fin-X has transitioned to a much more scalable B2B model, encompassing hospitals, health insurance companies, and physicians. The aim is to centralize the bureaucratic process of surgery scheduling/payment by providing a unified communication platform for all stakeholders.
The value proposition here is clear: dissipate the informational fog in the health sector. With Fin-X, payers, physicians, and hospitals access uniform information along the surgery scheduling and payment process. From the day surgeons request a room to the hospital, to the day they are paid, Fin-X reduces informational asymmetry.
Fin-X is the solution hospitals always wanted, reducing time for scheduling surgeries and leveraging the idle capacity in the surgery sector (~25% in private hospitals). This leads to 5x increase in operational efficiency on surgery centers and, predictably, a boost in hospitals' main profit generator. It is no mystery Fin-X is present in 7 of the 9 biggest hospital chains in Brazil and already processes 15% of all scheduled surgeries in the private sector.
There is a clear network effect here. The more hospitals using the solution, the higher the incentives for surgeons who work in many hospitals to only use Fin-X for all their surgeries. This also pressures hospitals that are not yet Fin-X customers, but employ surgeons who use Fin-X, to become customers, bringing even more physicians. This virtuous cycle continually presses for more customers organically, providing higher value to hospitals and making the solution indispensable to payers.
We are happy to empower Daniel and Sergio in decreasing surgery risks and ultimately helping patients undergoing stressful health-related situations. With Fin-X, the beating heart of the health sector will finally become more efficient and affordable.