On the face of it, the health care staffing shortage doesn’t seem like an obvious dilemma for startups to tackle. After all, venture-backed startups are about taking on problems one can solve with massively scalable technologies. And nursing—which requires hands-on attention from actual humans—isn’t a job you can replace with software.
Nonetheless, in recent quarters we see a lot of funding activity around ventures offering tools and platforms aimed at making it easier to find, fill and upskill for health care jobs. In particular, a number of startups are looking to address the nursing shortage, which has reached epic proportions since the beginning of the pandemic.
“People are feeling the effects of the past couple of years,” said Lennie Sliwinski, co-founder and CEO of Trusted Health, a health care staffing startup best known for its travel nurse hiring platform. In a recent survey among nurses on its platform, more than half reported feelings of extreme stress, trauma or PTSD since the pandemic began.
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Meanwhile, vacancies abound. About 194,500 openings for registered nurses are projected each year, on average, over the decade, per the U.S. Bureau of Labor Statistics. Openings are expected to result from the need to replace the high number of workers who change occupations or exit the labor force entirely.
Job satisfaction is a pressing issue. A survey of nurses this spring by staffing firm Incredible Health found that over a third of respondents reported it is very likely they will quit their job by the end of 2022. A survey by Trusted Health found that nearly half of nurses said they are less committed to the profession than they were before the pandemic.
Big money, but an even bigger problem
Startups attempting to solve big problems have a history of also attracting big money. Health care staffing is no exception. A sample list of 17 funded startups tied to the space has collectively raised more than $700 million since last year. To date, they’ve raised over $1.15 billion.
We list them below:
Trusted Health, which has raised $175 million to date, is among the larger funding recipients. Sliwinski, a former marketing director for tech job recruiting site Hired, launched the startup in 2017 in part on the inspiration of his mother, a nursing educator, with the idea that nurses could also benefit from tailored, tech-enabled tools to chart their career paths.
Today, the company estimates that about 10% of RNs in the U.S. have a profile on the platform. Revenue, meanwhile, has been growing an average of 5x per year, said Sliwinski, who declined to specify sales numbers in more detail. The startup is best known as a place for travel and contract nurses to find short-term positions, but it has also been building up a staffing platform that helps hospitals fill shifts.
Another marketplace for health care jobs, Nomad Health, has also been scaling rapidly. The 7-year-old New York-based company raised $63 million in a September debt and equity fundraise.
The fundraise follows years of growth for the contract space. Nomad’s funding announcement cited stats showing the temporary health care staffing segment grew to $19.9 billion in 2020 and was projected to grow another 7%, to $21.3 billion, in 2021.
Not just staffing
Not every funded startup in the space is directly focused on health care staffing.
For instance, the largest funding recipient on our list, Miami-based Papa, which matches seniors with companionship and care providers, isn’t exactly a health care staffing startup, so we wavered on its inclusion. However, those hired through the platform do provide care services, including transportation to appointments and meal prep for specialized diets, that are vital for keeping healthy, so we decided to include it.
Founded in 2017, Papa has been on a funding tear, with over $241 million in investment to date. The company closed on $150 million in Series D funding in November, led by SoftBank Vision Fund.
The most recent funding recipient, Cambridge, Massachusetts-based CareAcademy, closed on $20 million in Series B funding this week with an upskilling focus. The company offers training for home health providers in an effort to provide candidates for hard-to-fill positions and deliver workers a path to higher pay and advancement opportunities.
“Caregiver shortages are surging, but low wages aren’t drawing enough people to the profession to mitigate the issue,” said CareAcademy founder and CEO Helen Adeosun. Training can help, she added, noting that caregivers who complete specialized certifications for disease-specific skills—such as for dementia care, heart disease, stroke recovery care and other areas—can increase their earning potential.
A profession in flux
Recent funding rounds come amid a time of great flux for health care hiring. In addition to grappling with persistent shortages, health care employers are working to strike the best balance of staff and contract workers.
When hospital systems and health care providers are asked about their preferred nursing staff breakdown, it’s commonly about 70% staff positions and 30% contractors, per Sliwinski. However, in recent quarters, that often hasn’t been feasible.
“Hospitals spent so much on contingent labor to keep up with omicron,” he said. “Now they have to figure out what’s sustainable for them.”
Illustration: Dom Guzman
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