Tech startups target in-home care market for elderly

Bloomberg

Olga Mos was living with her extended family until last year when the 93-year-old found bathing, dressing and cooking too tough to handle solo. Her daughter-in-law Rhoda Wilkinson Domingo looked at assisted living homes. She didn’t like what she saw.
“It was just sad,” Domingo said. “Everyone was clean and taken care of, but they looked very dull and withdrawn. They didn’t want to talk. It was really depressing.” Decades of medical breakthroughs have improved the quality and length of life, but technology has done little to help people like Domingo care for older relatives. Several startups aim to ease the burden of these families by using technology to automate caregiver-family matches, post customer feedback, create schedules and make payments more convenient.
Honor Technology Inc., one of those startups, announced a $42 million capital infusion led by New York-based venture firm Thrive Capital with participation from 8VC and Syno Capital. Honor, which in the past year began competing directly against traditional home-health agencies in San Francisco and Los Angeles, plans to use the funding to expand into new markets and continue improving its technology. The two-year-old startup previously raised $20 million from investors including Andreessen Horowitz. In-home care is now dominated by brick-and-mortar agencies. The National Association of Area Agencies on Aging Inc. has more than 600 member agencies listed in its elder-care locator and none is a technology startup, according to Chief Executive Officer Sandy Markwood.

CREATING STABILITY
Honor CEO Seth Sternberg declined to say how many customers Honor has served or how many care professionals it employs. During the past year his startup has focused on other metrics: the retention rate of home care professionals it hires — 83 percent have been with Honor for three months or longer — and its technical efficiency.
“Any new company says they are a tech company,” Sternberg said. “You have to look at who and what’s behind it.” Sternberg previously worked as a product management director at Google after it acquired Meebo Inc., a social media platform he co-founded.
The key to Honor, he said, is including human insights into the algorithms underpinning operations. Some things are obvious, like ensuring only professionals with experience caring for people with dementia get those assignments. Other things were learned by Honor employees through experience and transmitted to its engineers over time.

FINDING HELP
Once Domingo realized her mother-in-law needed more help, she and her husband, both in their 70s and still working as immigration attorneys in San Francisco, bought a home for the three of them in the Bay Area suburb of Concord, changed their work schedules and began searching for a daytime caregiver for Mos. In-home care doesn’t come cheap. Hiring a professional for 40 hours a week at $25 hour runs $52,000 a year. Add weekends and the costs increase to $72,800 a year. And like nursing homes, which have a national average starting cost of $82,125 a year and increases in price as clients need more services, assisted daily living tasks aren’t covered by Medicare.
The number of people ages 65 and older hit 46.2 million in 2014 — and will reach 82.3 million by 2040 and 98.2 million by 2060, according the U.S. Census Bureau. And 90 percent of those seniors want to remain in their homes as long as possible, according to the most recent survey by the AARP. A few venture investors have placed some bets on the home-care startups. HomeHero has raised $23 million from Tencent Holdings, TechStars, Social Capital and others. CareLinx has raised about $5 million from investors including Generator Ventures and StartUp Health.
Care.com, which raised more than $157 million from Groupon backers New Enterprise Associates, IVP and others before going public in 2014, attracted Alphabet’s attention in June. The company’s growth fund, Google Capital, invested $46 million in its first ever equity stake in a public company.
Honor board member and early investor Marc Andreessen said home elderly care is “a very fragmented, low-tech market.” “It’s the kind of work that just hasn’t been respected culturally and that’s wrong,” he said, adding that Honor aims to ‘up-level’ the experience for caregivers and customers.