F-U-N-D-E-D: Startups for seniors raise cash to give grandpa options

The famously youth-focused tech industry has written big checks recently to companies built around the problems of aging.

Max Taves Staff Reporter
Max writes about venture capitalism and startups while seeking out the new new thing to come out of Silicon Valley. He joined CNET News from The Wall Street Journal, where he contributed stories on commercial real estate, architecture, big data and more. He's also written for LA Weekly, Slate and American Lawyer Media's The Recorder, where he covered legal battles in Silicon Valley. Max holds degrees from Georgetown University and Columbia University's Graduate School of Journalism.
Max Taves
3 min read

Startups for seniors are finding favor -- and cash -- in Silicon Valley Lisa Werner/Moment Mobile

Startups are practically synonymous with youth. Unsurprisingly, companies run by the younger generations were also created with them -- and their problems -- in mind.

So it might seem like a surprise that $20 million was raised this week by a startup focused on the elderly.

It's called HomeHero, and it launched in early 2014 as a matchmaking service connecting vetted in-home caregivers with senior citizens in need of their care. To date, HomeHero says 1 million work hours have been booked through its site.

And now, with an eight-figure infusion, HomeHero is planning to find more caregivers for more seniors by expanding beyond Los Angeles to San Diego, the San Francisco Bay Area and across Sun Belt cities in Arizona, Texas and Florida. The company has few doubts about its potential.

HomeHero Chief Operating Officer Mike Townsend said he believes that by the end of this year, the company will be growing an average of 20 percent each month.

HomeHero isn't alone. Just last month, CareLinx, which like HomeHero connects caregivers to seniors, raised $1 million. And the month before, another caregiver matchmaking service for seniors, called Honor, raised $20 million in a round led by Andreessen Horowitz, one of Silicon Valley's most successful venture firms.

For Gramps -- or his adult children -- tech's newfound funding means more options just as the massive Baby Boomer generation, those born in the time after World War II, begin to retire and face their twilight years.

There's Seniorbook, a German-language social network for older people; SeniorsWireless connects the elderly with doctors via videoconferencing; there's Seniorly, for housing options (families of seniors, for example, can filter 350 communities for amenities such as whether they have spas, outdoor spaces, happy hours or organic food).

And there's even a venture capital firm -- Generator Ventures -- focused exclusively on funding technology for seniors. Generator's investments span the gamut of age-related problems. It has backed a company that provides antiscam help, a necessity for seniors, who frequently get targeted. It's also backed a maker of emergency medical devices, as well as an online booking site for posthospital care.

For Stephen Johnston, a co-founder of Generator Ventures, the demographics are the opportunity.

The Baby Boomer generation is one of the largest in the US. Between 2000 and 2030, according to the US Department of Health and Human Services, the population of people older than 65 will more than double, to 72.1 million, and their share of the total US population during that time period will grow from 12.4 percent to 19 percent.

With those kinds of projections, researchers predict a lot of new demand, and founders and investors are keenly aware of that. One 2013 report estimated that the total amount spent on elder-care services -- a large category that includes everything from skilled nursing to assisted living -- will grow 5 percent annually through 2016, when the market would reach $320 billion.

In fact, of 50 industries studied by the US Department of Labor, none was expected to grow as fast as services for the elderly and disabled.

"This is not a niche," says Johnston. "This is a big market."

And one of his earlier investments is starting to show it.

Today, CareLinx has a network of more than 100,000 in-home care providers present in more than 50 metro areas around the country, and the company reports it's been growing fast. About 2,000 new families are using the site each month to find the right person to look after an aging relative, according to the company, which also says its revenue grew by a factor of four in the last 12 months.

To be sure, there are precedents for the recent flurry of senior-focused startups that could give today's crop of entrepreneurs both optimism and pause. There are successes like A Place for Mom, a site launched in 2000 that helps families find assisted-living facilities, which was ultimately bought by private equity firm Warburg Pincus in 2010. But other companies entering the space since then haven't done as well. TenderTree and CareSimply both set out to match caregivers with seniors but stopped operating before they made much of a dent.

Still, pointing to the growth his company has seen recently, CareLinx's CEO Sherwin Sheik isn't worried.

"Don't be surprised if you see another big funding round soon!" warns Sheik. "The space is heating up."

F-U-N-D-E-D is part of a regular column looking -- and sometimes laughing -- at what Silicon Valley has backed in the last week.