Specialized services for the elderly population are a growing trend in Brazil and around the world. The aging of the population has triggered a new demand and window of opportunities in the call Silver Economy. One company that has embraced this challenge is Benvo, invested by Green Rock in 2021.
A Agetech was born in 2020, founded by Derick Bezerra, and its mission is to be a Marketplace One Stop Shop of specialized products and services for Silver Economy at LatAm. The company focused on providing greater care and expanding health in Long-Term Care Institutions for the Elderly, a high-growth sector lacking technological innovation. In an exclusive interview, the founder discussed his vision of the market and Benvo's trajectory.
Check out the interview below:
What is Benvo's story? What gap did you see in Silver Economy?
In reality, we didn't start out as Benvo nor in the segment of Agetech. We started seeing a very large gap in the pharmaceutical sector. We understood that, with the pandemic, people would need to buy their medications without leaving home. Since a medication is the same everywhere, instead of entering the marketplace Traditionally, the person chooses the item and starts shopping at a drugstore, it made more sense to read the entire basket of products, bringing the lowest price in a single delivery. The idea for the company was born that way.
As we evolved, some Long-Term Care Institutions for the Elderly (ILPIs, popularly known as nursing homes) became clients and we began a discovery process in this sector of high consumption and monthly recurrence. However, it was still very analog. We started to visit some ILPIs and saw that they had a lot of pain with medication. If institutions have a large physical space, they cannot be located in large centers. If they are not in these large centers, they cannot buy medication from the main chains. We set out to address this pain, initially with medication.
As we expanded our client base, we noticed a common factor in the institutions: pain with medications was very great, but there were even greater ones. These institutions are below the visibility curve in every sector. In addition, all technological evolution for the ILPI sector was carried out by monetizing the institution, not being efficient and with slow traction. In our view, it made much more sense to charge the sell-side, which has a constant interest in selling more. So, for example, if the ILPI needs medication, it makes sense for us to be the channel and connect that demand with companies that have the sale of medication as their core. This is for food, health insurance, health services.
Benvo aims to be the main distribution channel for products and services for the elderly in Latin America, connecting those with the core to specialized products for this audience. Among the richest 5% in Brazil, 17% of them are elderly, and the majority are in ILPIs. This market, because it is very analog, has no data. If you Google, for example, the number of institutions in Brazil, you will have data from 2007, from 2014, at most. Because it is very analog, few people who are not in the sector know how large this market is.
What do you see as the biggest challenges of an ageing population?
Unlike products created for Generation Z, which appear frequently, there is a lack of products and services aimed at 60+. One point to consider here is that the evolution of startups in Brazil is recent. Normally, the entrepreneur is addicted to solving the problem that exists in his life and that is attractive. Solving problems related to aging is not the daily routine of most entrepreneurs.
I will cite an example, in health, to show that in addition to being powerful, the silver economy is efficient: startups and large consulting, testing and vaccination companies at home. They spend a lot on transportation to go to a person's house to perform a service. An ILPI has up to 120 elderly people, who regularly require appointments, tests and vaccines and who will perform various services at the same address. The return for this company, with Benvo, is vastly higher and brings new and recurring revenues until the end of its life.
Our proposal is to bring visibility to excellent companies to further enhance their results and the elderly to have more and more personalized services. We show how the sector works, bring our client base with CAC R$ 0 and, with a small percentage, we bring a CAC Payback of less than or equal to one month, an exceptional metric.
Inside the Silver Economy, we already know that health is very important. But the sector is very large, where do you understand that the greatest opportunities are today?
A Silver Economy corresponds to 20% of the country's GDP. For me, the greatest opportunity today lies in the connection of those who specialize in this core. The biggest Deal It's the one with the connection. I'll give you some comparisons. The Brazilian market, unfortunately, encourages small companies to remain small, why? Because if you leave Simples Nacional, you enter into a Real Profit or Presumed Profit tax that burdens and ensures that small businesses do not break this barrier.
So in Brazil, you don't see an institution with more than 200 elderly people. When you look at the United States, for example, you see institutions with 10,000 elderly people. My business model in the United States wouldn't work, because the institutions are so big that they don't need an intermediary. So I don't have one Benchmark for our current focus, because of this Brazilian fragility. But in several adjacent chains we have Benchmark.
An example is: mental health for the elderly, which is a very recurring theme. When we look Benchmark There's the Pope in the United States. It is worth over US$ 1.4 billion and raised over US$ 240 million. What does she do? It connects seniors with college students so they can talk. If I already have the elderly base, I can do the same thing by connecting. I already have step one, then it's verticalizing or placing, for example, companies that already have a mental health core.
Another example is Devoted Health, which raised over US$ 2 billion. It is insurance that specializes in the elderly. If I have the entire administrative profile of the institution, I know the accident rate, the medications it uses and how it is treated, I can price much better or provide more solid data so that an insurance company can make the appropriate pricing and avoid accidents. In this sense, I can have much more basis to approve this Deal than an insurance company that doesn't know that profile. I'm just citing a few examples, but we could make a trousseau of opportunities and solutions that already exist and that I understand the main point is to make the connection.
What do you understand is missing before we reach a higher degree of maturity in Brazil in this sector of Silver Economy?
I think there is a need for a company to lead this transformation. I'll give you an example. I was talking to the founder of Zee Dog. When he started with Zee Dog in 2010, 2012, the pet market was not attractive to anyone. When Zee Dog came and placed the brand for visibility and a well-suited and adherent product, everyone wanted to copy, the market became attractive and new solutions came. I'm not going to say that this happened exclusively because of Zee Dog, but it boosted the business. The pet market in Brazil is R$ 36 billion, Silver Economy It is R$ 2 trillion.
We want to bring competent people with us and create relevant products, even for companies invested with large funds. If we have a Funding faster, by growing this base, we bring more visibility to the sector. With visibility, more entrepreneurs will create solutions, which may be competing or complementary, which is a natural process and has no problem.
What are Benvo's next steps?
The next step by the end of this quarter, for example, is to enrich our institutional base. Today we lead the sector, but not in the way we want. Our intention is, by the end of June, to triple our base of institutions, connecting with at least four major sellers. I'm talking about health, Food service and other distributors to service that base. Today the focus is on providing the basis and showing that this market is extremely robust, lacking information and growing rapidly. We are finalizing some partners and they will add a lot.
Until July, bringing this base of institutions with partners moving over 20 thousand reais a month, we were able to show the market that we are able to expand the number of partners for complementary services and grow much faster. We expect that by the middle of next year we will have at least 600 institutions transacting with us at least R$ 20 thousand each. That is, a monthly GMV of R$ 12 million.
