In the latest sign that capital is flowing to innovative home care companies, CareLinx Inc. has secured two new investors to bring its total raise to $5 million, the California-based business announced this week.
Founded in 2011, CareLinx manages an online marketplace through which people who need home care can connect with caregivers. It recently passed the 100,000 mark for registered caregivers on the platform, the company also announced on Tuesday. The $5 million capital amount represents the total raised since the company was started, a spokesman confirmed to HHCN.
“The accelerating growth of our nationwide caregiver network is beyond our most optimistic expectations,” said Sherwin Sheik, CareLinx’s founder and CEO, in a written statement. “We have invested very little in direct outreach to caregiving professionals, but word has spread across the country that our platform enables caregivers to earn more money, be selective about the assignments they accept, obtain free $1 million professional liability insurance coverage, and be guaranteed they will be paid for the hours they work.”
Generator Ventures and the Ziegler Link-age Longevity Fund are the two new investors. Generator Ventures is the venture capital arm of Aging2.0, a startup accelerator focused on senior care; the Ziegler Link-age Longevity Fund is a limited partnership of Ziegler, an investment bank, and Link-Age, a senior living provider consortium offering purchasing solutions, research and investments.
“CareLinx often has been mistakenly described as the Uber of home care for the elderly,” Sheik wrote in a blog post announcing the new investments. “It’s an understandable comparison as both companies offer an industry-changing platform for people to find the service they need exactly when they need it.”
However, unlike the ride service app Uber, CareLinx does not intend to transform home care simply through technology, Sheik went on to explain. The company helps connect customers with caregivers through personal advising via its customer care representatives—or what Sheik in his blog terms “the human intervention side of our business.” CareLinx also handles administrative tasks, invoicing, care coordination and other services once a caregiver and client have been matched.
A former Wall Street health care industry analyst, Sheik started CareLinx after his family had difficulties securing high-quality home care for his sister and uncle.
An even more recent startup, Honor, recently made a splash by securing $20 million from a cadre of high-profile investors. It has certain things in common with CareLinx, including the use of technology to connect clients and professional caregivers, a pledge that its caregivers will be carefully screened, and a self-professed mission to pay caregivers a higher rate than they might get elsewhere.
Honor also was described in the press as the Uber of home care—and the company also expressed concern that this does not accurately describe its model.
Despite these similarities, there also are notable differences between the two companies. Perhaps most obviously, Honor is just now launching in a small area in California, while CareLinx just marked its fourth year and says it now has significant penetration into the country’s largest 50 metropolitan areas. The latest funds will be used in part to launch national marketing initiatives, as well as to bring on more staff, suggesting that eyes could be on this company to see how this type of home care model scales up.
Written by Tim Mullaney