Antonio Moraes, the grandson of a late distinguished Brazilian billionaire, was by no means concerned about becoming a member of the family-owned conglomerate of building corporations and a financial institution. Shortly after graduating from school, he based one in every of Brazil’s first affect funds, which invested primarily in corporations that made healthcare extra accessible and reasonably priced.
However whereas attending Stanford College, the place Moraes obtained a grasp’s diploma in enterprise administration and healthcare coverage, he realized that as a substitute of investing in impactful corporations, he needed to start out his personal.
As part of an entrepreneurship class, Moraes and his co-founder, an engineering grad pupil, 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. value solely about $10 to supply. “We thought there’s one thing very improper with these markups,” Moraes advised 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 usually don’t cowl all the prices, Moraes stated. “With imaginative and prescient insurance coverage, folks anticipate 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 throughout 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 current imaginative and prescient insurance coverage.
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 just about can save as a lot as 69% off the retail value, 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 via 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 nicely,” Moraes stated.
XP Well being’s AI-powered platform makes use of facial recognition to suggest glasses that match the member’s fashion and face form.
Members may also purchase glasses from bodily eyewear retailers at a reduction, however Moraes emphasised {that a} comparable body can value as a lot as two to 3 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 clients, together with Docusign, Navistar, Chegg, and Sequoia Consulting, who supply XP Well being as a profit to their workers. XP Well being additionally has shaped strategic partnerships with insurance coverage suppliers equivalent to Guardian Life Insurance coverage, which supplies imaginative and prescient advantages to small companies.
In fact, XP Well being 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 couple of different choices. However Moraes claims XP Well being is the one startup that’s taking up 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 contemplate itself to be an insurance coverage firm. That’s as a result of what these corporations supply isn’t insurance coverage in a conventional sense. “There’s no actual danger,” Moraes stated. “It’s a company profit.”
