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Living Their Best Life At Home: Senior-Focused Startups And VCs Reevaluate Elder Care

Over the last 10 years, investment in startups focused on the areas of “elder care” and “home health care” has increased.

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At the same time, investors are eying new opportunities in the space. Reframing technologies so seniors can live their best life, be active and prevent health mishaps while staying in their own home is the key, say experts we interviewed.

Enter the concept (and budding sector) of “aging in place.”

Thriving at home

The Centers for Disease Control and Prevention defines the concept of “aging in place” as “the ability to live in one’s own home and community safely, independently and comfortably, regardless of age, income or ability level.”

Abby Miller Levy, managing partner and co-founder of Primetime Partners, created an early-stage investment fund in July with Alan Patricof to invest in companies that identify and solve key issues for older adults. The firm has invested in two companies so far, Retirable, a financial services company focused on older adults, and Carewell, which provides advocacy for caregivers and an e-commerce site for home health products..

“We learned that 90 percent of older adults age in place, where there are only 2 million senior beds in our country,” Miller Levy said. “By default, people are aging at home, and not how the media portrays it.”

For example, the home environment is not set up to manage mental and physical decline nor social isolation for the one-third of people over 60 who live alone, according to Miller Levy. She estimates that the average American spends $50,000 a year on home health care, but that could go up to more than $300,000 to care for someone with dementia.

The concept of the “silver tsunami” is not new in the VC world, but finding a supply of startups to cater to the coming wave of aging baby boomers is still an issue, she said.

“While we see a lot of startups beginning to penetrate the market, we still have big questions, like ‘Who pays for it, the end-user or the government?’” she added.

A step back: funding overall

Venture and seed funding in these two main areas (elder care and home health care) peaked in 2018, at $490 million, per an analysis of Crunchbase data.

As of Sept. 25, $368 million was invested in 40 companies in 2020, with the most recent being Papa and Carewell. Overall we found 365 companies operating in those two sectors that collectively raised approximately $2 billion to date.

However, this is only a limited picture: The database didn’t show funding data for about 85 of the companies due to them being too early-stage. In addition, three of the companies— Devoted Health, DispatchHealth and Heal—accounted for $535 million, or roughly a quarter of the total funding amount.

“When we took a step back to see what was out there and underserved, that category jumped out at us,” Chetan Parekh, senior brand director and innovation portfolio leader at P&G Ventures, told Crunchbase News.

However, Parekh sees a disconnect in where investment dollars are being funneled.

He estimates that 80 percent of dollars are going into the business-to-business institutional care space, for example technology used by nursing homes, yet only 3 percent of older adults live in institutional care facilities.

“Capital is aplenty, but startups need the expertise on branding, insights, product design, the actual product development, supply chain and manufacturing processes that would allow the idea to flourish and convert to something big,” Parekh added.

More accessible tech

Baby boomers—generally defined as those people born between 1946 and1964—tend to be more technologically savvy than their parents and most likely have smartphones and use apps.

“They don’t have the same concerns over making mistakes with technology that the previous generation really had, so the more confident people are with the use of smartphones and smart televisions, the more they see this technology as accessible for them,” Tom Cassels, president of Rock Health, said in an interview.

Still, as Rock Health reported in September, tech startups continue to generally overlook older adults in favor of Millennial and Gen Z users.

Cassels sees startups that focus on aging in place falling into four categories: In-home services, Medicare Advantage, loneliness and care for the caregivers.

In-home services

Startups offering in-home services are working on approaches for how to be the last-mile for services in the home and how to be the first-mile to the home.

Investments in the last-mile have been in startups providing telemedicine, such as K Health, which raised a $48 million Series C round in February, or at-home testing like Everlywell, which received FDA approval for its COVID-19 Test Home Collection Kit in May.

In the first-mile camp are companies focused on the fulfillment of care, such as concierge primary care practice PlushCare and TytoCare, a platform enabling self-examinations and telehealth physicals. TytoCare raised a $50 million venture round in April, according to Crunchbase data.

Medicare Advantage

Many companies focused on aging in place in this space are helping Medicare-eligible people and their family members choose the best health plans. These companies include Assurance, HealthSherpa and NowPow, Cassels said.

“E-health has been around for awhile, but it is now something we are seeing as a choice on Medicare Advantage plans,” he added. “Another aspect is utilizing supplemental benefits, such as increasing the number of home aids or community health workers coming in to help with minor tasks.”

Loneliness

Some of those supplemental benefits have been addressed by startups offering help to seniors who suffer from social isolation.

That includes recent investments in companies, like the aforementioned Papa, which raised $18 million in Series B funding last month to pair older adults and families with “Papa Pals” for companionship and assistance with everyday tasks. Meanwhile, Element3 Health uses matching algorithms to connect seniors who share hobbies and similar likes, Cassels said.

“Because those people have the same thing in common, it creates a group that is sticky,” he added. “One of the interesting things is they measure the number of interactions, not just at the bowling alley, but what you are doing with your new friends.”

Caring for the caregivers

This concept is one that Cassels said doesn’t get as much attention as it should.

Carewell CEO Bianca Padilla agrees. A caregiver herself, Padilla told Crunchbase News last month, when we reported on her company’s $5 million in seed round, that family caregivers face unique challenges.

Ali Ahmadi, CEO of TCARE, made a similar point. He also founded a caregiver support startup based on his family’s experience of transitioning from child to caregiver. TCARE raised $3 million in August, led by SixThirty Ventures, and is approved by the Centers for Medicare & Medicaid Services.

“It’s not about cooking and cleaning, but the first time you have to bathe your mother-in-law, as well as the emotional toll of being a caregiver and the root causes that lead to burn out,” he added.

To help others not get burnt out, the company’s database contains community-based resources in more than 55,000 ZIP codes. Caregivers participate in technology-guided therapy sessions that result in a care plan and referral to local professionals.

Meanwhile, Cassels said he is optimistic investors will see more startups emerge with new ideas to help caregivers balance their lives while also taking care of loved ones.

“Forward-thinking health plans and venture capital groups are incubating solutions in this space right now, so we will likely see interesting services being spun out of some health plans,” he added.

Illustration: Dom Guzman

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