Pipo buys Health Brokerage from Convenia
Pipo a digital health and corporate benefits brokerage just completed its first M&A, buying an insurance brokerage and adding 11,000 lives to its base.
The acquisition of the brokerage which belonged to Convenia – will be paid 100% in cash and involves a partnership between the two companies. In addition to the health brokerage, Convenia operates an HR management platform that serves more than 1,700 small and medium-sized companies.
With the transaction, Pipo’s benefits platform will be integrated with Convenia’s HR management platform, allowing the startup to capture new customers. “It’s a very strategic M&A for us, which goes beyond buying the portfolio,” Manoela Mitchell, the founder of Pipo, told Brazil Journal.
The acquisition comes a year and a half after Pipo raised a $20 million Series A round led by New York-based venture capital firm Thrive Capital. Since then, the startup has grown to 80,000 people (convenia has 11,000) and 220 customers, including companies such as MadeiraMadeira, Buser and Alura.
Founded in 2020 by Manoela – a former health analyst at Temasek and Actis – Pipo uses artificial intelligence and big data to make the plan selection process more packaged and cheaper for businesses.
To do this, the startup cross-references attributes — such as coverage network, price, and payment level — of more than a thousand health plans available on the market with a client’s staffing needs. By applying its proprietary algorithm, it achieved what it calls a “perfect match,” resulting in significant cost savings.
Another differentiator is working in plan management, helping companies reduce their claims and, therefore, plan costs. For this activity, Pipo receives a recurring commission on top of the sales, which represents approximately 5% of the value of the insurance. Pipo earned 15 million reais last year and expects to triple that turnover this year.
Manuela said the startup has yet to break even, but won’t necessarily need a new round anytime soon. “We expect to break even within the next 12 to 24 months, and until then we have the capital to run the business,” she said.
