How Brazilian Beep Attracted Mark Zuckerberg’s Fund

Healthtech raised a series C round led by Bradesco and Facebook founder vehicle

Doctor Vander Corteze was as exhausted as if he were an athlete who had just completed the ironman. But the test that ran was of another order, going through the icy winter that has already left entrepreneurs, startups and jobs along the way. On the way, he found a strong ally: Mark Zuckerberg.

Beep, the home health startup founded by Corteze, has just announced a series C round co-led by CZI, the fund of Zuckerberg and his wife, pediatrician Priscila Chan. Bradesco, which was already a partner in the company, led the investment alongside the American firm.

The round was joined by all the investors who helped build Beep in recent years: Valor Capital — the investment firm of ambassador Clifford Sobbel — Nubank founder David Velez and DNA Capital, a health-focused manager created by the Bueno family (of the Dasa controllers).

“I would be lying if I say it wasn’t suffered and I wasn’t worried, but I didn’t think about selling Beep,” Corteze told Pipeline. After the marathon, it’s time to recharge your batteries to keep growing.

“The whole team is very happy and also very exhausted. Being able to raise capital in such a difficult time is a special taste – and bringing an investor who needs no introduction”, said the founder.

Contrary to what it has done in other rounds, this time Beep is not opening for values. But the investment came with an upround — according to Corteze, with a “great growth in value”.

The motivations for the numbers to remain private are related to the new times of austerity. In the previous round, announced in April last year, the startup raised BRL 110 million at a valuation of BRL 670 million.

“Until the scenario turned around, companies were true fundraising machines, but we understood to announce checks and valuations that sent the wrong message. When there is more austerity — controlling costs and opening fewer fronts — announcing a truckload of money becomes difficult to explain to the team”, he argued.

Now, Beep is focused on improving metrics to generate cash. Throughout this year, when the company gained 20 percentage points in gross margin after improving technology in logistics, an investment that was planned for later, but was anticipated in the face of the need to generate cash. The idea is to reach breakeven in the first half of 2023.

“Have a fully funded plan and don’t depend on the next wheels because you don’t know how long this winter will last. It doesn’t mean we won’t do other rounds, I don’t want to need to. If the market improves and we have a good destination, I hope to come back with new and good rounds”, admitted the founder of Beep.

To attract Zuckerberg’s fund — a firm that makes impact investing and chose Beep as its first investment in healthcare — Corteze needed to prove that the business was capable of improving financial indicators. The negotiations took eight months and included a visit by a CZI representative to Brazil to learn about the startup’s operations.

“It is impressive to see Beep’s focus on training and quality of nurses, and it is clear that the company has managed to deliver an experience that is loved by patients,” said Vivian Wu, partner in CZI’s venture capital practice, in a note.

With more than 5 million potential customers in existing contracts — Beep is already connected to the health plans of companies such as Bradesco Saúde, Amil, Sulamérica, Omint, among other 40 partners — the startup already has annualized revenue of R$ 200 million and the expectation is to reach R$ 250 million in 2023.

Vaccines at home still account for most of sales, but the trend is for clinical analyzes to exceed even as a matter of size — while the vaccine market moves R$2 billion in Brazil, clinical analyzes reach R$20 billion .

Beep works with the Laboratório Diagnóstico do Brasil (DB) to process the exams. The startup operates in 150 cities and has more than 1,000 employees — about 800 nurses, who travel daily in a fleet of almost 400 cars.

Source: Value Pipeline