Exclusive: Kaiser Permanente Ventures Invests $5 Million in Healthcare Startup Hometeam
Kaiser Permanente Ventures, the corporate venture capital arm of California-based health care provider Kaiser Permanente, is backing two-year-old healthcare startup, Hometeam, with a $5 million investment, Fortune has learned.
Kaiser Permanente Ventures invests in innovative healthcare companies like Health Catalyst and Healthline Networks. Hometeam has raised $38.5 million to date with prior backers including Oak HC/FT, Lux Capital, IA Ventures, and Recruit Strategic Partners.
Hometeam aims to rethink how in-home care is administered to senior citizens. Unlike the popular independent contractor model, Hometeam employs caregivers as W-2 workers with healthcare benefits, 401-K plans and a career progression path. The company vets its in-home aides and pays them about $15 an hour – 30% to 50% more than the hourly industry standard wage of $9.50. Clients pay about $20 an hour for the service.
“Kaiser doesn’t have a strong presence in the in-home care space in the way that we do long-term,” founder and CEO Josh Bruno said in an exclusive interview with Fortune. “There are no firm plans yet, but there have been talks about how we can integrate in the Kaiser healthcare system.”
Hometeam would act as a conduit between the hospital visit and the transition back to the home. The caregiver would be responsible to ensure the patient is taking medication, doing physical therapy, and fulfilling any other doctor’s orders day to day. Hometeam is also exploring ways to make older adults more “connected” by building a platform that allows them to set up tele-doctor visits, get rides to community events and have groceries delivered to their door.
Hometeam currently serves clients in metropolitan areas of New York, New Jersey and Philadelphia. Bruno said the new funds will help the company expand to 10 new U.S. cities in 2016, but he declined to specify which ones. Bruno has known the team at Kaiser for a few years and said the health care giant could invest in the company’s future funding rounds. Attempts to reach a Kaiser representative for comment were unsuccessful.
Could Kaiser be a potential acquirer? Possibly, Bruno said, but he added that it’s unlikely he’ll consider an acquisition in the near-term.
“That’s not what drives me,” Bruno says of selling the company. “We’re not done yet. We’re not even close to changing this industry.”
Bruno certainly has some competition in the industry. The 40,000 mom-and-pop elder care agencies are raking in 99% of the revenue, he says. Senior care startups like Honor and HomeHero are also competing for VC dollars and trying to disrupt the $84-billion home care provider market. About 10,000 baby boomers will turn 65 years old every day for the next 20 years, and the American senior population will double in size, according to the National Institute on Aging (NIA) and the U.S. Census Bureau.