ImpactAlpha, May 24 – More than 50 million Americans are over the age of 65 today. That age group is likely to grow to 62 million by 2025 and 84 million by 2050. As the Baby Boomer generation ages, the cost of healthcare and health-related services in particular will sharply rise: Medicare spending is forecast to increase more than 6% annually through 2025; home healthcare spending will increase at a similar rate.
Already, the so-called Longevity Economy is estimated to be a $7.6 trillion market.
Three deals this week target some of the most costly over-65 expenses: housing, health and health services (transportation and food are also big-ticket categories). Honor secured $50 million to expand its business-to-business home health services platform; Iora Health raised $100 million for its network of primary care clinics for Medicare patients; and Foxy Management and Hebrew Home for the Aged closed funding for a new low-income senior housing development in the Bronx, N.Y.
- Elevating home healthcare… San Francisco-based Honor started in 2015 as a matchmaking service of sorts between consumers and home care providers. Now, its primary focus is helping resource-strapped care providers manage back-end functions efficiently. The Honor platform manages operational functions like payroll, recruiting, billing, insurance and compliance issues for small home services firms. “We’re really enabling these small businesses to become medium-sized businesses,” says Honor’s Seth Sternberg. Investors in Honor’s $50 million Series C round include Andreessen Horowitz, Kapor Capital and Thrive Ventures.
- Flat-fee primary care… Iora charges employers and health insurers a flat monthly fee, rather than fee-for-services, for care provided to seniors at its clinics. The company claims the model improves the quality of care and reduces overall costs. Investors seem to agree: Iora has raised $233 million since launching in 2011. Backers of Iora’s $100 million Series E financing include .406 Ventures, Devonshire Investors, F-Prime Capital, Flare Capital Partners and GE Ventures.
- Housing for homeless seniors… Homeless seniors will be offered 30% of the units in a 175-unit residential space for low-income seniors. Affordable housing developer Foxy Management and health and social services non-profit Hebrew Home for the Aged will develop the 20,000-square-foot plot in the Bronx, N.Y. Seniors earning less than 60% of the area median income will have access to the remaining units. The Low Income Investment Fund, or LIIF, provided a $4.2 million loan to acquire the site; development costs will be covered by low-income housing tax credits and New York city and state tax-exempt bonds and subsidies.