Introduction Of Health
Antonio Moraes, the grandson of a prominent Brazilian billionaire, opted out of the family business, choosing instead to pave his own way. After college, he founded one of Brazil’s first impact funds, focusing on companies improving healthcare access and affordability.
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While pursuing his MBA and healthcare policy degree at Stanford, Moraes realized he wanted to start a company instead of simply investing in them. In an entrepreneurship class, he and James Wong, an engineering student, toured eyeglass manufacturing factories in China. They were shocked to learn that designer frames costing up to $600 in the U.S. could be produced for as little as $10. “The markups were outrageous,” Moraes told TechCrunch.
With the high cost of vision care, many employees use insurance for eyeglasses. However, the benefits often don’t cover the full cost, leaving customers with hefty bills. “People expect insurance to cover everything, but they still end up paying $300 out-of-pocket,” Moraes said.
In late 2018, Moraes and Wong launched XP Health, initially focused on in-person vision care. But the pandemic prompted a pivot to a digital-first, AI-driven platform offering affordable eye exams and eyewear benefits. On Thursday, XP Health announced raising $33.2 million in a Series B round led by QED Investors, with contributions from Canvas Ventures, American Family Ventures, and others. This follows a $17.1 million Series A less than two years ago.
XP It platform allows members to save up to 69% on eyeglasses, with no markups on frames or lenses sourced directly from Asian manufacturers. The company generates revenue through recurring membership fees. “In many cases, members pay $0 for designer frames and premium lenses, along with eye exams,” Moraes said.
Using AI-powered facial recognition, XP It recommends glasses tailored to each user’s face shape and style. Members can also purchase discounted eyewear from physical retailers, though similar frames can cost two to three times less on XP Health’s online platform.
XP Health’s client base has grown from 30 to over 3,000 businesses, including big names like DocuSign, Navistar, Chegg, and Sequoia Consulting. The company has also partnered with insurance providers like Guardian Life Insurance to extend vision benefits to small businesses.
While companies like Warby Parker and Zenni dominate the direct-to-consumer eyewear market, Moraes believes XP Health stands out by challenging traditional vision insurance providers like VSP and EyeMed. However, XP Health doesn’t see itself as an insurance company. “What we offer isn’t traditional insurance,” Moraes explained. “It’s a corporate benefit, with no real risk involved.”
