The global population is living longer, and the number of individuals aged 60 and older is on track to reach 2.1 billion by 2050. And while much of venture’s attention is focused on start-ups catered to millennials and younger demographics, the market is changing.
The companies that could be considered eldertech and age tech-related are vast, as the term serves as an umbrella for many sectors. Areas like longevity healthcare, aging in place, engagement for older adults and homecare currently remain underserved.
More than $273 million has been invested into the eldertech sector through the first three quarters of 2020 across 47 deals, according to data compiled by PitchBook. Funding this year has already surpassed four of the previous five years and is up almost three times on the $109.6 million invested across 36 deals in 2015.
Miami-based Papa, a platform that connects senior citizens with college students for companionship and task assistance, closed an $18 million Series B round in September. The round was led by Comcast Ventures and saw participation from Pivotal Ventures, Operator Partners and Magnify Ventures, among others.
Retirable, a retirement planning tool and platform, raised a $4.7 million seed round in September. The financing was led by Vestigo Ventures who was joined by Diagram Ventures and Primetime Partners.
The eldertech and agetech industry is, ironically, very young, but interest is increasing from entrepreneurs and investors, says Abby Miller Levy, a co-founder and managing partner at Primetime Partners.
The market is starting to come around to the opportunities. “I’ve seen a dramatic increase in both number and quality of new companies being founded,” she says.
Levy adds that a key component to innovation in the space surrounds the goal of adults wanting to age comfortably and safely at home, and the tools and services that make that a possibility. Even before the covid-19 pandemic, “90 percent of aging adults wanted to age in place,” Levy says. “The question is, ‘How do we do so safely and beneficial to everyone involved?’”
Primetime Partners entered the scene in July 2020 as one of the first firms dedicated entirely to the space, looking to raise a $40 million fund to focus on companies wanting to innovate the future of aging.
Levy started the fund with Greycroft founder and industry veteran Alan Patricof. She says she had been getting increasingly interested in the space as she watched her retired parents age. Meanwhile, Patricof himself has experienced the market’s shortcomings firsthand as the primary caretaker of his wife for the last 10 years.
The firm recently participated in the $5 million seed round for Carewell, an e-commerce platform that vets healthtech products for at-home care professionals. NextView Ventures and e.ventures also participated in the round among angel investors.
“We’ve got 50 million non-professional, unpaid family caregivers,” Levy says. “We have a care shortage. Caregiving is one of the fastest growing professions. It’s a critical social need that we have.”
Aging in place, and the technology needed to do so, is also an area of focus for Nationwide Ventures. The insurance giant’s corporate venture arm has an investment thesis focused on areas that would benefit the life insurance company’s underlying members. Eldertech fits the bill.
“A big component of what we see here is that while three-quarters of Americans want to age in place there will be a big demand shortage of caregivers,” says Erik Ross, a managing partner of Nationwide Ventures. “What kinds of solutions can we see to help with that care co-ordination to age in place?”
Another area that Nationwide Ventures focuses on is financial wellness for seniors ranging from retirement to end of life planning.
The firm made an undisclosed investment in NewRetirement, a financial planning tool for individuals to make smarter choices regarding their retirement, in the first quarter of 2020. The firm also invested in Blooom, an online financial advisor focused on retirement planning. The firm participated in the company’s $9.2 million Series B round in 2017.
“There is a tremendous amount of wealth accumulation platforms, but not decumulation,” Ross says. “We need solutions that focus on when a person is approaching retirement and how they manage their assets and income.”
He mentions areas like will and estate planning, and management and life insurance as sectors that could use innovation. Levy hopes to see the same.
“Another theme of ours is around new financial products,” Levy says. “Half of older adults will run out of money. We have so many [fintech companies] focused on asset accumulation, but very few around savings on the health or retirement side.”
Katherine Hurley is an investment analyst at Village Capital, an organization that works with and incubates impact-focused companies. Hurley dove into the eldercare and agetech sector in a recent report the firm did with The SCAN Foundation, a nonprofit dedicated to the space. Hurley says she found that the majority of advancements so far focused on healthcare, which seems like an oversight.
“I was surprised there wasn’t more innovation happening in finance for this group,” Hurley says. “The majority is catered toward these wealth managers and insurance companies rather than focusing on ‘How do you live in retirement?’ or ‘How do you navigate Medicare?’”
Village Capital selected Golden, a platform that helps seniors manage their finances with their adult children, for its 2020 fintech accelerator program.
Another area that Hurley sees strong opportunities in revolves around senior citizen engagement and mental stimulation.
“There is not a lot of innovation in this idea of connection or engagement really while that was still a priority [for older adults],” Hurley says. “There is definitely a competitive advantage to focus on B2C older adult consumers.”
Primetime Partners recently invested in Bloom, a media website focused on connecting senior citizens to each other. Deal terms were not disclosed.
Other companies like Norway-based No Isolation created devices, such as KOMP and AV1, designed as communication tools to prevent isolation. The company has raised more than $10 million over the last five years. Starts at 60, a blog and informational website targeted at retired individuals in Australia and New Zealand, was founded in 2013 and has since raised $4.5 million in venture capital.
“Social isolation is a big cause of death,” Ross says. “It can be the equivalent of smoking very heavily. What we are trying to focus on is helping our members live comfortable in retirement.”
Isolation is one of the issues within the eldertech space that has been put on full display due to the coronavirus. As the pandemic has driven people apart, many entrepreneurs are seeing where potential start-ups can help fill the gaps they are seeing within their own families.
“The market, from when I took a look at it a year ago versus today, has exploded,” Levy says. “Covid-19 is absolutely accelerating visibility into the issues facing older adults.”
The pandemic also highlighted changing consumer behavior among older individuals, showing they are more than willing to acquire and learn new technology than many companies may have thought.
“There is a distrust from investors that a B2C model will work in this space,” Hurley says. “There is a lot of misconception around what this consumer looks like.”
Investment in this area is growing and will continue as it impacts so many people both inside and outside the tech and start-up communities. Levy says that when she talked to LPs about raising the fund, there was no need for sector education.
“We didn’t meet a single investor who didn’t get it,” Levy says. “This isn’t like blockchain, where there is a lot to understand. This is a very human issue. The thesis, everyone understood it from the get-go.”
Ross says he’s seen increasing interest from generalist firms, and they have worked with top-tier firms like Bessemer Venture Partners and Lightspeed Venture Partners on deals in this area.
“We’d love to see more attention from the tier-one venture capital firms,” Ross says. “The folks that have been active in the space we will continue to see. There is always a need for more founders and venture firms.”
There haven’t been any notable exits in the space and many of the companies are still so young giving multiple entrance points for investors as the sector grows and matures.
“We made a recommendation to support Series A start-ups in this space,” Hurley says. “What kind of data do they need for Series A raises? They need to support those companies to a successful exit so we can prove out this space.”