With a fresh injection of venture capital, Hometeam is poised to disrupt the $80 billion in-home senior care market.
Based in New York, the two-year-old startup hopes to bring more compassion when it comes to providing care services for the elderly by offering clients personalized care and custom mobile technology.
Earlier this month, Hometeam raised $27.5 million as part of a series B funding round from such investors as Lux Capital and Oak HC/FT. That capital, says 29-year-old founder and CEO Josh Bruno, will help the company integrate its technology with nursing homes and other medical institutions, as it builds out its R&D team.
Hometeam won't be accepting payments from the nursing facilities, but rather treats it as an opportunity to serve more patients--many of whom have diseases like dementia, multiple sclerosis, or Parkinson's. Its revenue comes from patient families and from private insurance policies.
What's most unique about Hometeam's business model is that it hires aides as full-time employees, rather than just contractors. Employees also enjoy a sizable salary that roughly doubles the industry standard (which is about $10.39 per hour).
To make this possible, the company takes a significant cut of its own in profits. Bruno, who was recently recognized as a Forbes 30 Under 30 honoree, admits that his profit margins are "much smaller" than Hometeam's competitors'. As a result, this has made raising capital difficult. When pitching to early investors, he says that there were a lot of no's.
It does help, however, that Bruno's custom-designed software automates the company's back-end finances, which he estimates gives back about 10 to 20 percent to employees.
The company, which launched in 2014, is reportedly growing by 20 percent each month in the number of caregivers in homes across New York, New Jersey, and Pennsylvania.
An idea born from an industry problem
Bruno came up with the idea for Hometeam when his grandfather began needing round-the-clock medical care at the age of 93.
"I watched my family struggle to try and figure out how to take care of him," he said. "We just wanted him to be happy, but he was losing his independence." That's when Bruno began volunteering in nursing homes around the country.
In the process, he realized there was a big issue in the industry: "Nobody was empowering their work force," said Bruno.
Marrying technology and emotion
At Hometeam, aides collect data about their patients (e.g., how often he or she is sleeping and eating, or photos of their daily activities with the aide) through an iPad app.
The aides provide medical assistance, such as managing medications, monitoring vital signs, and tending to more personal needs, like bathing and exercise. Family members of patients can send in notes and suggestions to Hometeam from their smartphones, and receive daily updates about their loved ones.
In a rising industry, challenges remain
On average, Hometeam's services cost $20 an hour.
"For decades, we've collected a ton of data, and haven't always used it very well or very wisely," says Kerry Shannon, a managing director with health care research firm Navigant. "Getting closer to patients and families is exciting."
Shannon is optimistic about the market potential of companies like Hometeam. "It is a terribly active space," she adds, referring to the new innovations in health care technology.
Still, dealing with consumer security remains a major challenge for young startups in the sector. "Anything that has to do with health care or in-home servicing gets some people concerned about how secure the data is," she adds. Startups should be encrypting their data, and working through reliable servers.
Developments along the way
In its early stages, Hometeam's glossy new technology was failing to attract users. It partnered with third-party home care agencies to provide data and updates in real time, but "caregivers had zero incentive to use it," Bruno says.
As a solution, he brought on his own aides, and rolled out the software to remain state and federal compliant with W2 workers. The move resulted in a new user engagement rate of 99.8 percent from caregivers, and 80 percent from clients, he estimates.
Unlike similar business models, Hometeam says it can promise full-time work, as it brings on new clients every five days.
With 300 total employees, the company this year is hoping to set up eight to 10 new offices while expanding its research and development team from 20 to 60 workers.