Culture Health, Wellness & Biotech Startups

Funding Surges For Startups Serving Older Adults

Over the past 100 years, the average human lifespan has roughly doubled. And as life expectancy rises, the senior population is growing, too. By 2050, well over a fifth of Americans are expected to be 65 and over. An American born today, meanwhile, can expect to live to nearly 80.

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In short, we’re getting older. And startups and venture investors — ever cognizant of growth markets — are scaling up efforts to serve our fast-growing aging population.

So far this year, VCs have poured over half a billion dollars into U.S. startups focused on eldercare and home health care, Crunchbase data shows. Funded companies include Papa, a platform connecting older adults with people to provide companionship and assistance; Ruby, a startup that helps seniors make safety upgrades to their homes; and Harmonize, a remote care platform focused on people with serious conditions.

The funding comes as seniors are increasingly opting to stay put, with survey data showing that three-fourths of older adults prefer to continue living in their homes as long as possible. The space got a further boost in 2020 as the pandemic fueled demand for at-home and remotely delivered health care.

“There are so many tailwinds coming out of this pandemic,” said Helen Adeosun, founder and CEO of Cambridge, Massachusetts-based CareAcademy, a venture-backed startup that provides training for home health providers. “One is that we as a country have discovered that a lot of things can be done at home, including health care.”

Certainly startup investors have discovered this. In the last five calendar years, venture backers have invested more than $2.5 billion into eldercare and home health startups. Though not all home health care startups are specifically focused on seniors, they are power users on most platforms, accounting for an outsized share of overall health spending.

Using Crunchbase data, we break down the numbers in the chart below:

Investment is happening across stages

Eldercare and remote health care are seeing activity across all stages of the startup investment spectrum, from seed to later stage and pre-IPO. There’s even a unicorn or two in the mix.

For remote care, the most heavily funded private company is DispatchHealth, a Denver-based provider of mobile and remote health care that has raised more than $400 million in known funding to date. Seniors are a core target demographic for the startup, which touts its partnerships with Medicare providers.

Other well-funded startups include Honor, a tech-enabled platform for finding skilled home care providers that has pulled in more than $250 million in venture capital, AlayaCare, a home health software platform with around $110 million in funding, and Papa, which has raised over $90 million.

There’s plenty of seed-stage activity as well. Recent seed-funding recipients include New York-based Aloe Care Health, provider of a voice-activated medical alert system for older adults and caregivers, Serenity Engage, a HIPAA-compliant messaging app platform for senior care, and Grayce, a tool for family members navigating care needs for aging relatives.

For a sense of where startup funding is happening across stages, we put together a list of funded startups for 2021:

Political action could provide a further boost

Political action could provide a further boost to the eldercare space. Earlier this year, the Biden administration called on Congress to put $400 billion toward expanding access to home- or community-based care for aging relatives and people with disabilities.

In addition to expanding at-home care, the administration says it is seeking to improve compensation for homecare workers, a workforce composed disproportionately of women of color who “have been underpaid and undervalued for far too long.”

It’s a policy objective that could use some help from entrepreneurs, said CareAcademy’s Adeosun, noting that currently there is a lack of professional infrastructure for direct care workers to develop skill sets that could boost job opportunities and pay. Her startup is looking to address this by providing online courses for senior care professionals in topics such as working with dementia patients, transporting wheelchair-bound seniors, and caring for stroke survivors.

As startups mature, SPACs, acquirers and public markets are watching

The eldercare sector isn’t only of interest to the venture crowd, of course. Public investors are watching the space as well, with an eye to expanding options to buy shares in fast-growing companies.

A couple of special-purpose acquisition companies have already cropped up with plans to acquire a promising player in the eldercare space. Senior Connect Acquisition, a SPAC launched late last year by UnitedHealth Group founder Richard Burke, seeks to put $300 million toward acquiring and taking public a company in the senior care and home health market. Another SPAC, EQ Health Acquisition Corp., has $220 million to put to work and lists home care and hospice providers among its target areas.

The most recent IPO in the space, home care provider Aveanna Health, offers services across age groups. Shares have traded mostly flat since the Atlanta-based company made its market debut in April with a market cap around $2.2 billion.

For now, talk of hot new offerings for senior-focused companies is running ahead of actual deals. But for those who see demographic trends as the core driver of market demand, it’s clear this is an area that’s poised for growth. And as our population grows older, we could use more help from younger companies with innovative approaches to aging gracefully.

Illustration: Dom Guzman

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