Hometeam Scores $27.5 Million from Investors
After a year in which home care startups secured eye-popping sums from investors, 2016 has started out with yet another extraordinary funding: New York-based Hometeam on Monday announced a $27.5 million Series B round.
Venture-growth equity fund Oak HC/FT joined existing investors Lux Capital, IA Ventures and Recruit Strategic Partners in this round.
The capital will be used to support the development and implementation of new tools for caregivers, clients, family members and health system partners, co-founder and CEO Josh Bruno tells Home Health Care News. It also will go toward Hometeam’s planned expansion into 8 to 10 new markets this year. The company currently serves New York City, Philadelphia and areas in New Jersey.
Hometeam—similar to startups Honor and HomeHero—utilizes technology to match up seniors and in-home caregivers, provide more visibility into what occurs in clients’ homes, enable more on-demand scheduling and streamline payment processes. Hometeam has built its reputation in large part on its Beautiful Days program, with a goal of creating more personalized care plans that increase a client’s happiness.
Some of the new software tools being developed and tested now are to give Hometeam caregivers more information, so that they are more prepared when they arrive at a senior’s home, and to allow family members to remain more connected.
“We’re also building more tools for rehab centers, hospitals, physicians, and that’s where it gets really interesting,” Bruno says.
Specifically, Hometeam workers track health indicators such as weight and blood pressure, and the company is seeking new ways to share these stats with other providers serving Hometeam clients—including home health and hospice agencies. That would allow care plans to be changed more dynamically. Bruno also talks about bringing doctors and other professionals into the home through video, via the Hometeam iPad app.
More robust data collection and sharing also benefits providers from a referral standpoint, as health systems increasingly are looking to work only with organizations that have the best metrics.
“I think the biggest value for home health and hospice is that we’re collecting data on what’s happening in care plan adherence and medication adherence, etc., and they can repackage that for their referral partners,” Bruno says.
Not About the ‘Quick Buck’
Given that Hometeam is seeking to become a more vital player with the overall health care system, it may raise a question about the future of the company—namely, might it be sold to one of these larger organizations?
This is not the play that Hometeam is preparing for, according to Bruno, although he does not dismiss the idea altogether. Still, when investors ask this question, he says he gives them all the same answer: “We will be the premier provider of in-home private duty health care 50 years from now.”
It comes down Hometeam’s “promises,” which are to be a long-term solution for seniors who need care and a long-term career for top quality caregivers, Bruno says.
“It’s unlikely we end up selling the business to anyone, really, and more likely we remain a standalone entity so we can fulfill those promises,” he says. “If someone eventually came along that offered to acquire us but keep us independent, that could be interesting, but it’s too early to know. Too often in startups, it’s all about the quick buck, and that just doesn’t work in senior care.”
So what is motivating investors to put up such large sums? There are a few aspects of the company that Oak and the other investors focused on, Bruno says.
One is growth: the Hometeam business model is repeatable, so that the company can rapidly expand into new cities without compromising quality of care, Bruno says. Although it’s only been in business for about 20 months, the company already is the largest home care provider in northern New Jersey and the second- or third-largest in Manhattan, according to Bruno.
While he declines to name specific cities Hometeam might enter next, Bruno says the focus will be on areas where the company can make the most significant impact, looking at consumer needs and the existing health system.
Hometeam also is putting up impressive numbers in terms of client retention. By total number of hours per client, Hometeam is well above the industry average: Its clients stay with the company seven times longer than clients remain with the average home care company, Bruno says.
In an industry facing major labor challenges, Hometeam also is performing well on staff recruitment and retention, Bruno says. Hometeam directly employs its caregivers, offering them above-average wages, paid time off and sick days, and other benefits. Hometeam can spend more on labor than many competitors because it achieves efficiencies through its use of technology, Bruno explains. He says the company currently employs hundreds of caregivers and this will increase to the thousands early in 2016, with recruitment driven mainly by referrals from current workers.
But it also helps that Hometeam has found investors who are connected to the startup’s mission, Bruno notes. He explains that Oak and other investors are worried less about top-line revenue growth and more about the overall value the company is providing to the end-user—in this case, seniors who need home care.
“The team at Oak looked at what we’re doing each and every day, the impact we have,” Bruno says. “They know we’re doing something right.”
Written by Tim Mullaney
Photo Credit: bfishadow