Antonio Moraes, the grandson of a late outstanding Brazilian billionaire, was by no means considering becoming a member of the family-owned conglomerate of building firms and a financial institution. Shortly after graduating from school, he based considered one of Brazil’s first affect funds, which invested primarily in firms that made healthcare extra accessible and inexpensive.
But whereas attending Stanford University, the place Moraes obtained a grasp’s diploma in enterprise administration and healthcare coverage, he realized that as an alternative of investing in impactful firms, he needed to start out his personal.
As part of an entrepreneurship class, Moraes and his co-founder, an engineering grad scholar, James Wong, visited a number of eyeglass manufacturing factories in China. They found that designer frames that promote for as a lot as $600 within the U.S. price solely about $10 to supply. “We thought there’s something very wrong with these markups,” Moraes advised TechCrunch.
Because imaginative and prescient care and eyeglasses are costly, many workers purchase frames with their imaginative and prescient insurance coverage, however the advantages sometimes don’t cowl all the prices, Moraes mentioned. “With vision insurance, people expect not to pay anything, but then they leave the optician’s office with a $300 out-of-pocket bill.”
Moraes and Wong began XP Health in late 2018, however in the course of the pandemic, they shifted the startup’s focus to a digital-first, AI-driven platform that provides workers eye exams and eyewear advantages at considerably decrease prices than current imaginative and prescient insurance coverage.
On Thursday, XP Health introduced a $33.2 million Series B led by QED Investors with participation from Canvas Ventures, American Family Ventures, HC9 Ventures, Valor Capital Group and Manchester Story. The spherical comes lower than two years after XP Health’s $17.1 million Series A.
XP Health members who purchase eyeglasses nearly can save as a lot as 69% off the retail value, Moraes mentioned. The firm claims to not mark up the frames or lenses sourced immediately from factories in Asia. Instead, XP Health generates its income by recurring membership charges.
“In many cases, our members pay $0 for a pair of high-quality designer frames with the best-in-class lenses, and for the eye exam as well,” Moraes mentioned.
XP Health’s AI-powered platform makes use of facial recognition to suggest glasses that match the member’s model and face form.
Members can even purchase glasses from bodily eyewear retailers at a reduction, however Moraes emphasised {that a} related body can price as a lot as two to 3 occasions much less if bought from the corporate’s on-line platform.
Over the final two years, the corporate has expanded its enterprise buyer roster from 30 to over 3,000 enterprise clients, together with Docusign, Navistar, Chegg, and Sequoia Consulting, who supply XP Health as a profit to their workers. XP Health additionally has fashioned strategic partnerships with insurance coverage suppliers comparable to Guardian Life Insurance, which gives imaginative and prescient advantages to small companies.
Of course, XP Health is just not the one firm that’s taking out the intermediary in eyewear. This is already a crowded market. Warby Parker sells on to customers as does Eyebuydirect, Firmoo, Pair Eyewear, and Zenni, to call a couple of different choices. But Moraes claims XP Health is the one startup that’s taking over incumbent imaginative and prescient insurance coverage suppliers, a market that’s dominated by VSP and EyeMed Vision Care.
Yet, XP Health doesn’t think about itself to be an insurance coverage firm. That’s as a result of what these firms supply is just not insurance coverage in a conventional sense. “There’s no real risk,” Moraes mentioned. “It’s a corporate benefit.”
