Investors are hot on home care startups, if a recent $42 million funding grab is any indication of where technology is making waves in the health care space. Home care startup Honor has announced the eye-popping funding grab in a Series B round. The figure may give senior housing providers some pause about what care setting is the biggest competition.
Honor initially gained attention with a $20 million round last year, and is known for its on-demand services, prominent investors, and its high-profile founder with Google ties.
California-based Honor raised the capital in a Series B funding led by Thrive Capital, a New York-based venture capital investment firm with a focus on media and internet investments. The $42 million brings Honor’s net funding rounds to $62 million.
On the heels of its gargantuan funding round, Honor is expanding its home care services outside of its current California markets of San Francisco and Los Angeles with a new location in Dallas. The company, based in the Bay Area, is currently hiring new care professionals for its new Texas location. With the funding, Honor will also be undergoing a huge hiring push within California, says co-founder and CEO Seth Sternberg.
“We need way more care pros,” Sternberg told Home Health Care News. “To find amazing care pros is really hard, especially in San Francisco. It’s a really tight labor market. There are 2.5 million care pros in America, but the rate in which the population is aging means we will need massively more care pros in the next 10 to 20 years.”
With a hiring rate of only 5% of its pool of applicants, Honor’s appetite for qualified care pros is “insatiable,” Sternberg said.
The company is also searching for additional engineers to continue building and expanding its technology platform.
In addition to funding the hiring push and larger labor force, the new funding will be put to a variety of other uses, Sternberg said. These include more work on the fundamental technology undergirding Honor, as well as the expansion into new markets.
If the past is any indication, Honor may also find creative and unusual ways to deploy capital. Last year, Sternberg pledged to donate $1 million in free home care. The company has also pledged to pay home care professionals at a higher rate than average, and directly employed its staff on a W-2 basis rather than on an independent contractor basis.
Thrive Capital is a new investment partner for Honor, and its first New York partner. The VC investment firm has invested in the likes of Instagram and Oscar, a health insurance company disrupting the space with technology.
“Thrive is really into being very aggressive in innovation and improving health,” Sternberg told HHCN. “They’re a big tech investor. We like that they are also pushing the boundaries in health care—and that they are in New York. As a startup, you want to keep growing your network.”
Other investment partners include 8VC, Andreessen Horowitz—who led the company’s first funding round—and Syno Capital. Corporate venture capital (CVC) firms are increasingly partnering with startup businesses that aim to disrupt the health care space with technology, and senior housing doesn’t have to miss out.
Honor is one of several home care startups, including HomeHero and Hometeam, that recently have burst onto the scene and scored major investment dollars. They all are seeking to leverage technology to better connect clients and caregivers, bring more efficiency to operations, and increase transparency and communication among all the stakeholders in home care, including family members and health care providers.
Written by Amy Baxter
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