UK Home Care Startup Raises $17 Million

A technology-forward home care startup based in the United Kingdom has raised $17 million in a Series A funding. The business, which launched in November 2016, has raised approximately $21 million to date.

London-based Cera, which was recently embroiled in an online fake review scandal, will use the funding to push out its new CeraFlex service line, which offers an on-demand home care service and alternative to 24-hour caregiving.

Origins

Mahiben “Ben” Maruthappu, founder of Cera and a physician by background, started the company after seeing patients “ping-pong in and out of the emergency room (ER) because they weren’t receiving the care they needed at home,” he told Home Health Care News.

He also saw the experience first hand, with his grandmother and mother going through a “revolving door of care.”

Seeing an opportunity to provide better care at home, reduce hospitalizations and ease some of the pressures also placed on hospitals, Cera was born. The company provides in-home care that is both private pay and funded through the UK system, though the majority of Cera’s services are private pay, according to Maruthappu.

Technology plays a significant role in the operations, which bear a resemblance to U.S.-based home care startups with venture backing, such as Hometeam and Honor, though both companies have shifted their business models since launching.

Cera’s technology aims to streamline many of the operations that UK home care agencies are currently doing, replacing the “pen and paper to manage care,” Maruthappu said.

Cera digitally matches caregivers—known as carers—and users through several characteristics. It also digitalizes the logistics of caring “to be more efficient and scaleable to lower overhead.” The third function of the tech is tracking digital records, with information that can be shared with family members and doctors when permission is given, allowing carers to leave messages and document the care in real time. That information is harnessed to predict any risk factors and signal if the client is deteriorating, potentially preventing a catastrophic health event.

The funding round was led by Guiness Asset Management, which oversees $1.7 billion through its EIS fund; Yabeo, the lead investor of Germany-based care supply company Pfledgebox; and Kairos. Peter Sands, the former CEO of Standard Chartered and chairman of Davos, was also a follow-on investor from Cera’s seed round.

Flex model

Cera has charged on with its new service model, CeraFlex. The program provides visits with patients three times daily, in addition to requested services available anytime. The model aims to break up the typical live-in care notion by giving care when patients actually need it and lowering the overall cost.

“Outside of [those three services], you can request service 24/7 and we will get a carer guaranteed in 30 minutes,” Maruthappu said. “For centuries people have been providing or receiving live-in care. We are able to change that using technology. Because of the affordability using this model, we are up to 75% cheaper than all-day care.”

Maruthappu estimates families can save $30,000 annually—“a significant sum of money,” he said.

With that 30-minute guarantee comes the need for huge staffing numbers to deliver care. In the U.S., a caregiver shortage could make a model like this unattainable if providers don’t have enough staff available. Cera claims to have a high retention rate—90%—and high interest in applicants to become carers as a result of higher pay compared to competitors.

“Fortunately, we’ve had a huge surplus of carers applying to work with us,” he said. “[We’ve had] a 90% retention rate in the course of a year. … We have very high staffing; it’s quite strong.”

Cera is able to pay caregivers more because its technology enables the company to “reduce our overheard,” Maruthappu said. The company ultimately aims to have “thousands” of carers, he said. It currently has “hundreds” of carers who have provided 200,000 care sessions.

“We can invest more in our carers training and pay them better,” he said. “They can do more hours, if they wish, and get paid more per hour as well.”

The model may also work because the company is currently only operating in London, a condensed, urban area where carers can travel short distances to flit from one client to another throughout the day.

“We are focused in London, which means travel time is quite low,” he said.

As the company looks to expand into other regions, including Manchester, Birmingham and into Germany, the approach may require a different focus.

The funding announcement follows recent accusations that some Cera employees posted fake reviews about the company, Bloomber Technology reported in April.

The company brushed off the accusations as an attack from a competitor in a statement to HHCN: “It has come to our attention that we have almost certainly been the target of a deliberate attack by a competitor, which has led to the numerous misleading allegations made against our business. We will continue to investigate this and will be taking relevant legal action.”

Written by Amy Baxter

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Amy Baxter
Assistant Editor at Home Health Care News
When not writing about all things home health, Amy fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."

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