2022 Venture Capital Outlook: Investors Break Down the Home-Based Care Hot Spots

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The COVID-19 emergency undoubtedly forced the health care sector to reimagine care delivery. In this environment, home-based care and senior care services began to receive more attention than ever from venture capitalists.

In recent years, VC firms have poured over $2.5 billion into various senior care and home-based care startups, according to Crunchbase data.

This doesn’t look to be changing anytime soon. Startups that center around home-based care – and senior care generally – are likely to see continued opportunity and investment throughout 2022.

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“I think the platforms like Medically Home, DispatchHealth and Contessa that are allowing providers or health systems to deliver [higher-acuity] care in the home were the first wave,” Marissa Schlueter, a health tech investment associate at OMERS Ventures, told Home Health Care News.

OMERS Ventures is the venture capital investment arm of OMERS, one of Canada’s largest pension funds.

As part of this first wave, companies that helped organizations deliver high-acuity care in the home setting — including hospital-at-home services — locked down investments from VC firms, as well as other financiers.

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Since its inception in 2013, DispatchHealth has raised $403.2 million. In total, Medically Home has raised $274.5 million. Contessa has raised $59.8 million, according to Crunchbase.

“Hospital-at-home programs were already being put in place and experimented with before, but there was a major need for delivering that kind of care in the home during the pandemic because hospitals were so capacity constrained,” Schlueter said. “There’s a massive percentage of the population that have multiple chronic diseases, and those patients … need to have pretty regular engagement with their providers.”

As health care moves into a different wave, Schlueter has identified platform or SaaS-based solutions that enable extended care transitions, for aging and disabled patients, as next in line to receive VC interest.

Data will also continue to play a key role in capturing VC interest in 2022.

“What’s great about the shift into the home is that it also allows providers, caregivers and even payers to capture a lot more data on the social determinants that impact the health outcomes,” Schlueter said. “I think there’s going to be a lot of interest in tech solutions that are enabling the capture of that data, the analytics of that data, the navigation through better optimization of social services and care utilization in the local environment.”

Another area of home-based care that will be top of mind for VC investors this year is at-home diagnostics, Chris Booker, a partner at the Nashville, Tennessee-based VC firm Frist Cressey Ventures, told HHCN.

“Whether its lab tests or other diagnostic areas, [we’ve seen] this accelerate from an investment standpoint, as well as from a utilization standpoint,” he said. “Patients are getting accustomed to being able to do a lot of things that used to require a two- or three-hour visit to the doctor, for a simple test or procedure, at home.”

Frist Cressey Ventures’ portfolio includes senior care and home-based companies, such as CareBridge and Ready.

A continued focus on at-home diagnostics from VC investors should come as no surprise to those who have been watching this market closely.

Everlywell — a company that provides at-home tests — has raised $325 million since launching in 2015. The company markets its testing kits on a direct-to-consumer basis or through retail channels. In recent years, Everlywell has entered the Medicare Advantage (MA) space.

The company offers COVID-19 testing kits, as well as tests related to heart health, food sensitivity and more.

Another direct-to-consumer at-home health testing platform, LetsGetChecked, has raised $263 million in total since its 2015 launch. As part of its operating model, LetsGetChecked works with partnered connected devices, including Apple Health, Fitbit and Garmin.

VC investors will also fund technology solutions that address the ongoing labor shortage that home-based care is facing, according to Booker.

“I think more technology to leverage the staff levels that we have today will be a continued priority,” he said. “We’re seeing technology used to leverage staff and allow them to see and perform more services for patients.”

One area of home-based care that has been slow to scale in the past has been at-home dialysis. Only 12% of Americans who need dialysis receive treatment at home, according to 2019 Cricket Health data.

Last year, Frist Cressey Ventures turned its attention to at-home dialysis by further investing in Monogram Health’s Series B funding round, which raised $160 million. The kidney care management company provides at-home care and data-driven solutions for patients living with chronic kidney and end-stage renal disease.

“Monogram has been able to significantly increase at-home dialysis, significantly reduce ED utilization and hospital visits,” Booker said. “It’s been a big effort to keep people in the home setting.”

Ultimately, Schlueter believes VC interest comes down to three key areas.

“At the end of the day, it all comes down to the economics, clinical impact and patient experience,” she said.

Companies featured in this article:

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