Why We Invested: Vidia

The startup that aims to democratize surgeries in Brazil.

Vidia is a technology startup with the mission of connecting hospitals, clinics and doctors to perform procedures (such as vasectomy and cataract surgery) in an accessible way for those who do not have health insurance and would have to resort to the Public Health System, waiting in a queue that can take years.

The world today is full of ambitious founders who want to create unicorns, either out of a desire to become billionaire or to make the world a better place. They aim for the next Madeira Madeira, Facily, Olist or Daki — some of the latest Brazilian startups that have earned the status of unicorns. The fact is that most of them will not achieve this goal. The mortality rate in startups is enormous. Despite the chances of very high returns, investing in this asset class carries a number of risks.

There are, of course, incredible cases in the industry, such as Benchmark's return on its investment on Ebay, where it multiplied its US$6.7M check by 750 — that's right! The biggest return in venture capital's history.

Another emblematic investment was made by the giant Sequoia, which invested US$8M in WhatsApp in 2011 and another US$52M in follow-rounds. In 2014, when Facebook acquired Whatsapp for US$22B, Sequoia's US$60M was worth over US$3B, multiplying the amount invested by 50 in just 3 years, a return of approximately 260% per year!

Whenever we consider an opportunity, we follow a well-structured analysis process, where we identify not only the strengths and qualities of the startup, but mainly its weaknesses (Red Flags) that prevent us from moving forward with that opportunity. A lot of problems can happen to startups that are in the Pre-Seed & Seed stages and can go out of business (this is the stage where Verve Capital focuses its investments).

Among the most common problems:

Not finding product/market fit
Not being able to attract talent
Failing to attract investors
Addressable market size error
Conflict between partners
Giving up too soon

THE OPPORTUNITY

Vidia has caught our attention since they joining Verve’s opportunities pipeline. Added to the fact that it was presented by a V.C. from our network with an excellent track record, the founder also impressed us from the beginning of his presentation, proving to be very prepared, with impressive academic and entrepreneurial backgrounds, in addition to a vast knowledge of the industry he was starting to attack. The co-founder has the same intellectual level and complementary skills to the first one — which, in theory, is an excellent indicator of success. The “problem” they were attacking was latent, easy to understand, and with an addressable market that is large enough.

Besides the possibility of financial return, this investment can have a social impact and a direct improvement in the quality of life of millions of Brazilians who are currently waiting in line for surgery in Brazil - this was a big plus.

So, let's talk about our analysis process regarding Vidia — in a simplified way and protecting some of the company's secrecy — to explain our rationale and expectations in this investment.

THE TEAM

Undoubtedly the most important part of our review. We look for quality, but we also look for authenticity in what our founders are doing. For us, despite the subjective of this criterion, this connection, or identification, of the entrepreneur with what he is doing can be decisive.

In Verve Capital's portfolio, there’s a startup that is connecting small rural producers to restaurants. The markets no longer take part of the equation, which results in more money in the workers’ wallets. This entrepreneur is the son of restaurant owners and “grew up in the trunk of the car”. For years, he accompanied his parents to food distribution centers in Brazil to supply the family restaurant. This is an example of what we consider 100% legit!

At Vidia, the entrepreneurs’ profiles are high quality. The CEO combines extensive experience with several leading roles. He was a lawyer, for more than 10 years, in one of the largest law firms in the country; Board member of a few companies (among them a unicorn) and co-founder of a successful Venture Capital fund. After a health issue with his son, he experienced the problem, identified the opportunity and is now taking action - super legit! The second founder has an exceptional technical profile: experience as an entrepreneur, expertise on the hospital industry, MBA and a real desire to build something innovative.

Team validated! ✅

Thiago Bonini and Eduardo Cerqueira, Vidia's founders. (Photo/Andréa Matsumoto/Vidia)

MARKET SIZE

After validating the team, we focused on the real size of this market. Together with the information that is presented on the pitch deck, it is essential to do our own research and in Vidia's case it was easy to confirm the size of the addressable market and validate that it's large enough to be worth the challenge.

Identifying existing benchmarks around the world is very helpful for the analysis. The Indian startup Pristyn Care, for example, became a unicorn just recently by doing something similar and in a comparable market.

Latin America and India are regions that are very distant from each other geographically, but have several similarities: emerging countries with high population density that share inefficiencies in almost all sectors - a “sea” of opportunities for entrepreneurs. Most Brazilian unicorns have business models that are more similar to unicorns in India than in North American.

Having investors like Sequoia, QED, Tiger Global and Epiq Capital on the cap table demonstrates an "appetite" of large late-stage investors for the thesis. An excellent indicator. 🏆

PRODUCT

The startup aims to connect hospitals and clinics that have vacancies in surgical centers with patients without health insurance who need some kind of surgery and can now pay for the entire procedure with total cost transparency and the possibility of financing.

As the company is already operational, and had customers, we interacted with some of them to hear about their experiences with the platform. In most surgeries performed so far, the level of customer satisfaction is very high; several clients have become true evangelizers of the company.

MONETIZATION

Vidia's business model is simple and has attractive margins. After verifying the quality of the team, the size of the market and the references, it is crucial to know how the company intends to make money. It seems something very basic to think about, of course! However, sometimes this is not so obvious. Startups are often attracted by huge markets, transact massive volumes and have a colossal audience, but they don't know how to monetize yet. It is essential to know clearly how to make money.

The amounts traded on Vidia's platform are high. The average ticket for surgeries is between R$5K and R$10K and the margins are also generous (2 digits). There is an established form of monetization and, in the company's Roadmap, several new ways to monetize. Today, for example, they are partners with a credit player that offers financing for these surgeries in up to 12 months. In the future, they may have their own financial services to offer to clients, in addition to other built-in services.

LAST BUT NOT LEAST

At the end of each analysis, we produce a Memorandum with notes, impressions, references, spreadsheets, studies and other materials used by the team so far. The person responsible for the deal makes a presentation to the Investment Committee, which takes place weekly, to produce a recommendation. The Committee decides together.

We are very excited about Vidia and confident that the co-founders Thiago and Eduardo are entrepreneurs qualified enough to build a lasting company that will benefit thousands of families, other than bringing good financial returns.

Below, there is part of the material produced by Verve Capital in the analysis of Vidia's deal. The numbers and other information were withheld for reasons of company secrecy and privacy.

AUTHOR: MARCELO FRANCO, VERVE CAPITAL FOUNDER

The startup that aims to democratize surgeries in Brazil.

There are, of course, incredible cases in the industry, such as Benchmark's return on its investment on Ebay, where it multiplied its US$6.7M check by 750 — that's right! The biggest return in venture capital's history.

Among the most common problems:

Not finding product/market fit

Not being able to attract talent

Failing to attract investors

Addressable market size error

Conflict between partners

Giving up too soon

THE OPPORTUNITY

Besides the possibility of financial return, this investment can have a social impact and a direct improvement in the quality of life of millions of Brazilians who are currently waiting in line for surgery in Brazil - this was a big plus.

So, let's talk about our analysis process regarding Vidia — in a simplified way and protecting some of the company's secrecy — to explain our rationale and expectations in this investment.

THE TEAM

Undoubtedly the most important part of our review. We look for quality, but we also look for authenticity in what our founders are doing. For us, despite the subjective of this criterion, this connection, or identification, of the entrepreneur with what he is doing can be decisive.

Team validated! ✅

MARKET SIZE

Identifying existing benchmarks around the world is very helpful for the analysis. The Indian startup Pristyn Care, for example, became a unicorn just recently by doing something similar and in a comparable market.

Having investors like Sequoia, QED, Tiger Global and Epiq Capital on the cap table demonstrates an "appetite" of large late-stage investors for the thesis. An excellent indicator. 🏆

PRODUCT

The startup aims to connect hospitals and clinics that have vacancies in surgical centers with patients without health insurance who need some kind of surgery and can now pay for the entire procedure with total cost transparency and the possibility of financing.

As the company is already operational, and had customers, we interacted with some of them to hear about their experiences with the platform. In most surgeries performed so far, the level of customer satisfaction is very high; several clients have become true evangelizers of the company.

MONETIZATION

LAST BUT NOT LEAST

We are very excited about Vidia and confident that the co-founders Thiago and Eduardo are entrepreneurs qualified enough to build a lasting company that will benefit thousands of families, other than bringing good financial returns.

Below, there is part of the material produced by Verve Capital in the analysis of Vidia's deal. The numbers and other information were withheld for reasons of company secrecy and privacy.

AUTHOR: MARCELO FRANCO, VERVE CAPITAL FOUNDER