Antonio Moraes, the grandson of a late distinguished Brazilian billionaire, was by no means excited about becoming a member of the family-owned conglomerate of development firms and a financial institution. Shortly after graduating from faculty, he based one among Brazil’s first impression funds, which invested primarily in firms that made healthcare extra accessible and reasonably priced.
However whereas attending Stanford College, the place Moraes acquired a grasp’s diploma in enterprise administration and healthcare coverage, he realized that as an alternative of investing in impactful firms, he needed to begin 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 one thing very flawed with these markups,” Moraes informed TechCrunch.
As a result of 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 stated. “With imaginative and prescient insurance coverage, individuals count on to not pay something, however then they depart the optician’s workplace with a $300 out-of-pocket invoice.”
Moraes and Wong began XP Well being in late 2018, however in the course of the pandemic, they shifted the startup’s focus to a digital-first, AI-driven platform that gives workers eye exams and eyewear advantages at considerably decrease prices than present imaginative and prescient insurance policy.
On Thursday, XP Well being introduced a $33.2 million Collection B led by QED Traders with participation from Canvas Ventures, American Household Ventures, HC9 Ventures, Valor Capital Group and Manchester Story. The spherical comes lower than two years after XP Well being’s $17.1 million Collection A.
XP Well being members who purchase eyeglasses nearly can save as a lot as 69% off the retail worth, Moraes stated. The corporate claims to not mark up the frames or lenses sourced immediately from factories in Asia. As an alternative, XP Well being generates its income by way of recurring membership charges.
“In lots of instances, our members pay $0 for a pair of high-quality designer frames with the best-in-class lenses, and for the attention examination as properly,” Moraes stated.
XP Well being’s AI-powered platform makes use of facial recognition to advocate glasses that match the member’s model and face form.
Members may also purchase glasses from bodily eyewear retailers at a reduction, however Moraes emphasised {that a} comparable body can price as a lot as two to a few instances much less if bought from the corporate’s on-line platform.
Over the past two years, the corporate has expanded its enterprise buyer roster from 30 to over 3,000 enterprise prospects, together with Docusign, Navistar, Chegg, and Sequoia Consulting, who supply XP Well being as a profit to their workers. XP Well being additionally has fashioned strategic partnerships with insurance coverage suppliers equivalent to Guardian Life Insurance coverage, which offers imaginative and prescient advantages to small companies.
In fact, XP Well being just isn’t the one firm that’s taking out the intermediary in eyewear. That is already a crowded market. Warby Parker sells on to customers as does Eyebuydirect, Firmoo, Pair Eyewear, and Zenni, to call a number of different choices. However Moraes claims XP Well being is the one startup that’s taking over incumbent imaginative and prescient insurance coverage suppliers, a market that’s dominated by VSP and EyeMed Imaginative and prescient Care.
But, XP Well being doesn’t take into account itself to be an insurance coverage firm. That’s as a result of what these firms supply just isn’t insurance coverage in a conventional sense. “There’s no actual threat,” Moraes stated. “It’s a company profit.”