Aging-in-place enabler Homethrive has raised an additional $20 million in Series B funding.
For Homethrive, the funding round – led by Human Capital, with participation from Allianz, 7wireVentures and Pitango HealthTech – will go toward its “aggressive expansion” plans and further technology investments. And for similar senior-focused startups, the infusion of capital shows that VC interest in the space has far from cooled, despite a recent investment slowdown.
“This funding will help us build up our sales and marketing capabilities, expand them to be able to reach more people and evangelize for this kind of family-caregiver support,” Dave Jacobs, co-founder and co-CEO of Homethrive, told Home Health Care News. “And it will also help people understand how Homethrive’s solution really uniquely meets that need.”
Jacobs and his business partner, David Greenberg, launched the Northbrook, Illinois-based Homethrive in 2018, after each had gone through family-caregiving challenges with parents.
Before creating Homethrive, Jacobs spent 15 years as a senior executive at Medline Industries, a $12 billion health care products company. Greenberg also served as a senior Medline exec, tasked with leading the organization’s strategic priorities.
Yet even with their health care backgrounds, the pair often felt lost trying to find and coordinate services for their parents, Jacobs recalled.
“Despite the fact that we were health care executives with a lot of knowledge of the industry, and were fortunate to have close families and the means to support our families, the caregiving journey was incredibly challenging,” he said. “It was difficult.”
To alleviate those pressures for others, Jacobs and Greenberg sought out to build a business that, in very simple terms, acts as a digital senior care roadmap.
“As we look at building businesses that inform and connect the health consumer, the key ingredient isn’t just the idea behind the business,” Glen Tullman, co-founder of 7wireVentures and the CEO of Transcarent, said in a statement. “The key ingredient is the people to make the idea a reality at scale.”
Somebody whose parent was diagnosed with dementia, for example, could download Homethrive’s smart digital assistant, Dari, which would then offer background on the disease and access to social workers. In that scenario, Homethrive could additionally help family caregivers find professional services in their market, including home health and home care agencies.
“One of the most common things [we do] is we help people understand the differences between ‘skilled’ and ‘non-skilled’ home care, helping them access that,” Jacobs said. “That’s one of the most common things people come to us for, in terms of services. We are very much a partner for home care [agencies] across the country.”
As for how services are paid for, Homethrive is offered as a benefit by self-insured employers and Medicare Advantage (MA) plans, plus Medicare supplement and long-term care insurance. Homethrive is currently available across the U.S.
Some of the organizations offering Homethrive as a benefit include the Michigan Manufacturers Association, law firm McDermott Will & Emery and health-tech startup emids. Private wealth management firm Rockefeller Capital Management is another enterprise client.
“A service like Homethrive is an intangible that’s inherently valuable,” Frank Due, senior vice president and head of human capital at Rockefeller, said in a statement. “It’s a white-glove service navigating an important and meaningful space that we’re not accustomed to.”
Tullman is also chairman of the Homethrive board.
The bigger VC picture
With the $20 million Series B, Homethrive’s fundraising total swells to about $43 million. The company had previously raised an $18 million Series A in October 2020.
Jacobs and his team are bullish on Homethrive’s expansion plans, particularly with employers that recognize family caregiving as a must-have benefit in 2022.
On top of being a good recruitment and retention tool, caregiving benefits allow employees to remain productive. The direct economic effect from the need for caregiving is estimated at nearly $44 billion through the loss of more than 650,000 jobs and nearly 800,000 caregivers suffering from absenteeism issues at work, according to the Blue Cross Blue Shield Association.
“We believe that family-caregiver support will become a mainstay for self-insured employers, much like mental health support is today,” Jacobs noted.
More MA plans are starting to see the value that companies like Homethrive bring to the table as well.
Increasingly, MA plans are offering benefits aimed at the social determinants of health and preventing negative health outcomes long before they happen. The information Homethrive collects in the home potentially gives plans unique information on the health and well-being of their members.
“We are generally a canary in the coal mine for the payers,” Jacobs said. “Because people start to do research, using one of our roadmaps, very possibly before they’ve talked to a physician and a diagnosis has been given – or even an assessment.”
On the technology side, Homethrive plans to use the new funding to enhance its digital assistant by giving it additional AI-powered capabilities.
“We’re doing that so we can better recognize patterns when people need assistance,” Jacobs said. “Be able to provide the right recommendations and do that at scale, in a very rapid manner.”
On a macro level, Homethrive’s Series B reflects venture capital firms’ appetite for senior care startups, especially those with a home-based care approach. In recent years, VC firms have injected more than $2.5 billion into senior care and home-based care startups, according to Crunchbase data.
“There’s just a ton of money pouring into the space,” MedArrive’s VP of business development, Bryant Hutson, said at the HHCN Capital+Strategy conference. “There’s a lot more to experiment with.”
Also backed by 7wireVentures, MedArrive coordinates in-person care via emergency medical services (EMS) professionals, nurses and community health workers, among others.
That appetite is expected to remain strong, even though investors are showing signs of a more conservative approach.
Global venture funding totaled $47 billion in April 2022, which marks the lowest amount invested in private companies in the past year, according to Crunchbase. The April dip could be part of a longer-term trend, as the first quarter of 2022 likewise experienced a shift in funding.
Specifically, April funding was down 10% month over month and down 12% year over year.
Even if the VC landscape is changing, Homethrive still sees plenty of runway away, Jacobs said.
“As you have the combination of more people who are aging and more people who want to be at home, that puts more responsibility on the family caregivers – the unpaid family caregivers,” he said. “So the need and the pressure, the stress on them, it’s growing exponentially over time.”