Mexican healthcare marketplace Medsi raises $10M

The company offerings financial products, including a line of credit, to help members access care

Every country has issues with healthcare, though obviously some are going to be worse than other; Mexico's problems, for example, include a large percentage of people who lack of insurance, leading to unaffordable care, as well as widespread disinformation about treatments.

That's what spurred Manuel Villalvazo and Pablo Munoz de Cote to found Medsi, a Mexico City-based healthcare marketplace that helps its members get care through financial offerings. The company announced on Thursday that it raised a $10 million debt-financing round from CAPEM Mexico, an SME lender that seeks to positively impact and transform the economic development of Mexico.

"The biggest issue is the public health care sector only covers about 49% of the total population. So, if you take the population that has access to private insurance, which is only 5%, and you put it together with those people that have some coverage from the public system, you only get to 49%. That means over half of the population here have zero access to anything, so they're on their own," said Villalvazo

"Second, to make matters worse, to call public care subpar would be a huge overstatement; it's a system that is completely overwhelmed and that does not have the means, the capabilities, or the tools to address a problem of this nature."

In all, roughly 45% of total healthcare spend in Mexico is paid out of pocket, the second highest percentage in the world, behind only India. On top of that, there are major issues with financial inclusion due to over 60% of the Mexican population belonging to the informal sector, meaning the part of any economy that is neither taxed nor monitored by any form of government, so they have no access to credit.

So far, Medsi has so far released two products to help its members finance their: the first one, introduced in September, is a revolving line of credit, which can be used by everyone within a family unit.

"Maybe the person comes to us only with a very specific need, like they need to get a tooth pulled out. Based on our assessment of their financial capacity, we are able to approve a line for a larger amount and then this person can use that same line to address multiple other health needs that they might have put off for a long time within the family unit," said Villalvazo.

"There's a lot of people that are in the informal sector, there's a lot of young people that are new to credit, or maybe they have a lot of blemishes on their credit record. We offer them the opportunity to appoint a cosigner and then, with the backing of a cosigner, then they can start building a credit history, they can start repairing their credit history." 

The credit lines are available for up to 12 months, and $4,000, which he said addresses the bulk of the needs that we are seeing among the Mexican population. However, since the revolving line of credit can only be accessed by a certain subset of the population, the company launched its second product earlier this month, which acts as a layaway. That means that if someone can show prove to Medsi can set apart a part of their income in four biweekly installments, the company will lend them 10 times that amount. 

"What that does is people that would traditionally be precluded from accessing financing, they now have an opportunity. If they do their part in terms of saving, if they demonstrate to us that they have the income, that they have the discipline to pay this on a biweekly basis, that's where we step in," said Villalvazo.

While these financial products are the company's first offerings, they are more of a means to an end, de Cote explained: they are a door, a way to get members to sign up for the platform, so that it can then take them through a whole customer journey using technology.

"Imagine you have a person who hasn’t been able to be treated for an orthopedic surgery for the last three years; they will find Medsi online. They will have tried any other solutions to get funds and they haven't been able to get them, but through Medsi they can be accredited, they can get a loan. And through that loan, they can show up to the doctor that they choose and get their problem solved," he said,

"After that, we follow with an extensive customer journey that can take them through that process, and or other processes. That’s how Medsi was born, as a marketplace to solve this problem, and we start with a financing solution but then we start bringing new products around this."

That includes a medical concierge service, where medical specialists, who are available 24/7, can help people and try to point them in the right direction to get care, as well as a social hub, or an online community, where people can write about their own experiences and their own reviews or comments, etc. It also includes media, such as videos from influencer doctors, and an interactive directory of physicians.

The company is also currently beta testing automated booking, so that it can help patients know how much they are going to have to pay from the first visit to the last, as well information about the doctor, such as their qualifications and track record. 

"We want to start from the first time someone might Google a given symptom or procedure. If someone for the first time types, 'I want to get a nose job,' then we have this massive repository of information where, if you want to get a nose job, we can say, 'okay, these are all the type of procedures that you can get and you can do this with fillers or you can do this with surgery and this is in office and this isn't.' We put it in layman's terms in ways that it becomes very engaging," said Villalvazo.

"That's when you start creating engagement with people. We don't want people to open the app only when they need to take out a loan; this is something for people to become much more engaged with. In our minds, we are creating a super app for Latin American healthcare."

Right now, the company is processing over 5,000 applications a month, and it has over 30,000 people on the waiting list; it plans to use the new $10 million line of credit to turn on get those additional members onto the platform, while also expanding its marketing efforts and its customer acquisition efforts.

That will also involve expanding geographically, and company already has its eye on going north to the United States; in fact, de Cote sees Mexico as a "huge pilot," albeit one with nearly 120 million people.

"We have almost 95% of people uninsured and we are coming to solve what no one is looking at in an integral way. Thanks to tech, we can speed up this and we can give a similar services and have a new stack of products, once we have more and more and more data points from all the customers," he said.

"This is not a problem that is specific to Mexico, but rather something that is common among several emerging markets, so the first step would be creating a pan regional platform. Our aim is to expand up north; we think that in the US, if you don't have insurance, you are pretty much screwed. So, if we are to get a foothold within the Latin American community, and the US market, and even if we were to focus initially only on a subset of medical specialties, there's a tremendous opportunity there," said Villalvazo.

(Image source: medsi.mx)