Why it's still time for healthtech in Latin America – even after the worst moment of the pandemic

Unless you’ve been hidden in a bunker or adrift on the beaches of a far-away island, the past two years were a big watershed in many aspects of our lives. 

It wasn’t an easy moment. But some startups were inspired by the difficult situation to offer solutions to some of our problems, and then make that part of our lives better. 

That's particularly true for healthtechs. The covid-19 pandemic brought a decisive time to this segment, when sudden challenges had to be tackled with a combination of increasing investments and innovative ideas. 

That has happened both globally and in Latin America, where the investment in healthtech accelerated beyond the whole startup ecosystem's average – and we're talking about a region where startups have almost 19x their received investments between 2015 and 2021.

That's one of the insights from our The LatAm Tech Report. The report covers the past, present, and future of seven industries in Latin America – and healthtech is one of the fastest-growing and most promising areas. And there's more to explore than just telemedicine. 

You can see it in detail by downloading for free our full report. Would you like to have a glimpse first? We've got you covered. Here are some of the main trends and challenges healthtechs face, after these crazy pandemic years.

The foundation: for healthy ideas, there's room (and funding)

In the past years, you’ve probably added many of healthtech products into your daily routine – from telemedicine to wellness and mental health apps. And there’s a clear reason for that being more present every day in our lives: a massive investment in the startups providing these technologies.

The LatAm Tech Report shows that the total funding raised by healthtechs per year in LatAm increased 4700% from 2015 to 2021. Yes, 4700%. 

As a matter of comparison, this increase overpassed by far the combined growth rates of all funding to startups in the region – from 2015 to 2021, the total funding per year raised by the LatAm startup ecosystem grew 1800%.

Only in 2021, Latin American healthtechs captured over US$ 1 billion from investors, 4x more money than in 2020.

The acceleration in venture capital to healthtechs was reflected in the number of new health companies popping up around here, and that was seen even during this year. Only in Brazil, the number of healthtechs mapped by Startup Scanner, a partnership among PwC Brasil and Liga Ventures, increased by 32% between 2021 and 2022. 

With the right ideas and funding, these startups could soon become the next unicorns in the region. In LatAm, the only current healthtech unicorn is Betterfly, from Chile. But it’s worth noticing that, although Brazil doesn't have a unicorn in the sector yet, it has 6 soonicorns: Alice, Sami, Beep!, Pipo Saúde, Flash, and Memed.

But why is there some much funding in health technology in LatAm right now?

Well, the pandemic itself is one of the answers to this trend. The pressure on healthcare systems brought by covid-19 only fed the eagerness for more digital alternatives to problems we were already facing before the covid-19 arrived.

That's a pretty obvious answer, applicable to healthtech over the world. But while the Oxford Business Group reported a boom in investments in the health industry globally, there's a focus on emerging markets.

And that takes us to our second answer. When we look at all this money arriving at LatAm, another explanation comes from the easy return for investors by funding healthtech projects in the region. The reason becomes clear when taking into consideration some particularities of Latin American countries. 

‍We face many structural problems concerning the health system. Compared to most developed countries, LatAm has low efficiency when it comes to healthcare. A good part of the Latin American population has problems meeting basic needs, there’s low health spending per capita, and the infrastructure is still very undermined.

And it is due to this challenging reality that many healthtechs are finding a way to succeed in the market here – as we will see in the trends for the region.

The first trend: telemedicine to cover the gaps

The LatAm Tech Report covers many specific trends when analyzing the ecosystem of healthtechs in LatAm. Telemedicine is probably the trend that is probably the first one to pop into your mind.

Telemedicine has become a common reality not only in Latin America but everywhere else. The covid-19 restrictions made this tool an easy alternative to surpass difficulties in accessing basic health. However, when it comes to emerging countries, this technological development can also work to cover the burdening gaps in societies. 

Telemedicine has been helping to solve basic problems in many Latin-American countries, like the distance, the busy public healthcare system, and the high pricing for private doctor appointments. The population gained more access to the internet and digital tools over the years, while the health industry is more and more embracing the virtual world. 

This trend is posed to continue. Do you wanna see some numbers? This market might reach the value of US$ 5.6 billion by 2026 in Latin America, estimates the Oxford Business Group. In Colombia, virtual appointments increased by 7000% only in 2020. And in Mexico, even though telemedicine is still not well regulated by the government, almost 50% of the doctors in the country already use telemedicine in their work, as well as many hospitals.

This is one of the opportunities Dr. Consulta took when it was founded in 2011 in Brazil. The healthtech bet on providing quality medical services for affordable prices, which included clinics and telemedicine. Nowadays, they have over 4.5 million users registered to use their services, and had a revenue of R$ 310 million in 2021. Last August, the company attracted R$ 170 million in a Series D round led by the investment fund Kamaroopin. This funding will be used for expanding their own ecosystem and investing in projects that embrace other startups and verticals, such as the health insurance plan provider Cuidar.me.

Other evolving trends: the business with benefits case

The LatAm Tech Report also goes deep into other trends seen globally and in Latin America. In the region, the current and short-term trends range from mental health and wellness to health insurance, dental plans, and employee benefits. We'll show you more about the last one. 

Going beyond the traditional health insurance and meal allowances, some healthtechs are now focusing on health and wellness in a B2B2C model, helping other companies' Human Resources departments.

This sort of model relies on a very specific characteristic of the LatAm market: employers are the top spenders in healthcare. In countries like Brazil, it is common for employers to provide healthcare insurance as one of their employee’s benefits. And for these healthtechs, this habit can be extended further.

LatAm’s only healthtech unicorn, the Chilean Betterfly, is one example of how health and wellness corporate benefits can be a good business. In its current process of internationalization within LatAm, the startup raised US$ 125 million in a Series C round. They also have plans to expand to the European and US markets. 

Betterfly started offering wellness services to companies, such as exercising and meditation. The healthtech has been following a fast-growing path since then, including the purchase of the Brazilian startup of flexible corporate benefits SeuVale.

But it's not all roses for healthtechs in LatAm

Although the LatAm healthtech ecosystem has been seeing glorious days, with a big room to grow and opportunities to take, some regional barriers can be tricky challenges for the future for startup founders in the industry. 

And in that case, it’s better for both investors and entrepreneurs to be creative… As they should always be in the startup business.

The LatAm Tech Report points to three main challenges in the region: Data Infra & Privacy, Talent, and Regulatory Environment.

Healthtechs rely on the collection and use of a big amount of data, and that's always a delicate topic. A big challenge startups will face in the future is not only working with the increasing need for the collection of data to better their technological products and services but also being concerned about how to treat this data in regard to privacy and safety.

Another challenge is regulation in Latin America concerning healthcare. As we have seen, telemedicine still finds barriers in countries like Mexico. And this is just one example of how healthtechs should pay extra attention to their relationship with governments and public institutions in order to achieve sustainable success. Nobody wants to wake up with a surprise, what you're doing is illegal.

And finally, good news for people working on technology, but not so good for employers in LatAm. There’s a problem that has been huge in basically all tech companies around the world: it's a big challenge to find and keep good talents. With the deterioration of local economies and high demands from companies abroad, this reality is even more daunting in Latin America. And healthtech has an additional layer of problems, with some positions requiring experient and specialized professionals.

‍Want to know more about the future of healthtech in LatAm, including going beyond the trends we present here and finding out what are the opportunities in the medium and long term? Download the full version of The LatAm Tech Report.