What the Tech Startup Boom Means for Home Care’s Future
As cutting-edge tech startups continue to make a splash in the home health sector, their success could perhaps pave the way for mega companies like Google to make a play in the space. But industry professionals have differing viewpoints on what such a future might look like.
At a time when investment dollars in senior health-related have grown exponentially, with 134 deals in the senior care space totaling more than $1.3 billion during the first six months of 2015 alone, there’s no denying startup potential, said Unity Stoakes, co-founder and president of global entrepreneurship development company StartUp Health, during a recent Home Health Care News webinar. And if innovative technology that is transforming how senior care is delivered catches the eye of acquisitive larger entities, the question becomes: How big are the players going to get?
“I would never say that Google won’t enter into a space, because [Google co-founder Larry Page] just wants to change the world for the better, and he will do whatever it takes,” said Seth Sternberg, co-founder and CEO of Honor, during the webinar.
Honor, a system to both match home care providers with clients and to establish monitoring so that family members can keep track of the care a loved one is receiving, has been active in the San Francisco Bay Area after securing $20 million in funding earlier this year. It is the brainchild of Sternberg, who was previously co-founder and CEO of Meebo before Google acquired it in 2012 for a reported $100 million.
Sternberg said he envisions a vastly different future for Honor than that of Meebo, which essentially ceased to exist following the Google acquisition.
“That, as an entrepreneur, in my mind, is a failure,” he said. “I didn’t create something with Meebo that is still there changing the world for people, it’s just now integrated into the Google ecosystem. With Honor, I really hope that we fundamentally make the world a better place for seniors, for their families and for the care professionals, and that Honor continues to evolve and continue to do that when I need help as a customer.”
Other entrepreneurs working in the space think speculation around marquee names like Google might be putting the focus in the wrong area.
“I think it’s more likely to see technology companies acquire senior living facilities and some of the caregiving facilities, than to just focus on, ‘Is it a Google that acquires an Honor?’” Carl Hirschman, founder of tech startup CareTree, said during the webinar. “I think we’re going to see these companies, as they accomplish their mission of making people’s lives better, become very, very significant companies in the world.”
CareTree acts as a centralized, coordinated health record, integrating medical information and serving as a communication platform among caregivers, seniors and their families. Hirschman said some companies approaching him about potential acquisitions aren’t explicitly in the senior health care space, but rather are seeing the intersection of their consumer-facing products and the senior care realm, and are seeking out ways of keeping older adults as consumers of their product longer while making the caregiving process more efficient.
“We’re not going to see massive innovations at the hospital level,” Hirschman said during the webinar. “We’re going to see it on the consumer level through [personal fitness tracker] FitBit, through companies like CareTree, through empowering a different level of health care services. …That’s where we’re going to see some really interesting acquisitions and growth.”
The growth of startups that are introducing innovative senior care technology and their scaling up in senior living settings is a good thing, said Kevin Heraty, chief marketing and development officer at Cantata Adult Life Services. Based in the Chicagoland area, Cantata is a group of companies that includes an independent and assisted living campus, a home care service, and a consulting arm. It also is focused on being a leader in innovation, and as part of that mission, became an investor in CareTree.
Undertaking this sort of investment in promising startups is one way that senior living providers might share in the substantial upside as today’s startups achieve scale and perhaps even are acquired by the Googles of the world; but, at the end of the day, Heraty emphasizes that the most important impact of the startup boom is the possibility of enhancing the lives of seniors.
“Our ultimate goal is to help people achieve their best lives possible,” Heraty said. “With the demographic boom that’s coming to this space, we better figure it out.”
Written by Kourtney Liepelt