Have you ever unlocked your smartphone using your fingerprint? One of the minds behind this advanced technology now is bringing his expertise to a new market: senior housing.
And Scott Moody—whose former company created the technology behind Apple TouchID*—is not the only tech superstar turning his attention to senior living, and not the only entrepreneur securing large sums from investors for products that could transform care delivery in the near future. Moody just raised nearly $2 million for his startup, K4Connect, and that is only part of a tidal wave of dollars providing momentum for innovative senior health and care products. It’s currently a $7 trillion market and is forecast to grow to $13.5 trillion by 2032, according to figures cited this week by CNBC.
While the boom in startups focused on the senior market is not new, the latest investment figures reinforce its growing scale and scope—giving providers even more motivation to learn what’s in development that has the potential to disrupt the senior living status quo.
Startups Gaining Ground
Digital health companies active in the senior space have seen a dramatic increase in funding from investors, and this has been documented in quarterly reports from StartUp Health, an entrepreneurship development company.
The most recent report shows funding for digital health startups serving the 50-plus segment gained momentum during the third quarter of 2015, increasing 50% over the funding averages of the first quarter and second quarter of this year.
There have been 152 such investment deals year-to-date, totaling $1.7 billion, the report says. There were 267 such deals totaling $3.5 billion in all of 2014.
Additionally, investments relevant to the 50-plus market have contributed to almost half of the digital health funding in the past five years, with the number of deals as a percent of all digital health hovering at about 50%.
Investors are funding companies that address the needs of 50-plus consumers at all stages, the report says. GE Ventures has funded seven such deals so far this year, investing in early-, mid- and late-stage companies.
GE Ventures is closely followed by Penrock, which has funded six deals to date this year. Cambia, Fidelity Biosciences, and Qualcomm Ventures have all funded five deals to date.
From TouchID to Smart Senior Housing
The recent funding round for Moody’s K4Connect offers more insight into the excitement around senior-care technology, as well as its potential impacts to the senior housing industry. The company recently announced it has raised $1.9 million in a seed round to support the launch of K4Community, its first product for senior living communities.
“We’ve turned each apartment into a smart home,” Moody tells SHN.
Specifically, K4Community integrates disparate smart devices, technologies and systems into a single response system, and is meant to arm operators and community staff with actionable resident data and analytics to help improve customer satisfaction and quality of care.
The technology, which involves dashboards, alerts and reports, as well as analytics at the community level, is currently being piloted in two communities. Though Moody declined to identify the communities, he said the pilots are “going exceedingly well.”
“Look, nobody wants to be monitored, nobody wants sensors around to simply tell someone else about them,” Moody says. “Instead of just knowing when I fall down, what can you do to keep me from falling down?”
Moody said he envisions K4Community being used in independent living, assisted living and memory care, noting that with K4Community “each apartment is very much tailored for the resident” to be responsive to personal needs.
“Our objective really is to continually branch out to people in their individual homes,” Moody added.
Ben Yu, managing director of Sierra Ventures, told SHN that Sierra Ventures chose to help fund K4Connect and K4Community in part because Moody’s previous company, AuthenTec, was “very very successful.” AuthenTec’s technology currently serves as the foundation for Apple’s Touch ID.
Sierra Ventures is not the only investor sinking large sums into the senior-focused space because of the entrepreneurs involved.
Honor, a startup that offers on-demand in-home services, recently secured $20 million in funding, including $15 million from Marc Andreessen. Honor is the brainchild of Seth Sternberg, former co-founder and CEO of Meebo, which Google acquired for a reported $100 million in 2012.
Another home care startup, HomeHero, also secured $20 million this year.
But having a superstar entrepreneur at the helm is not the only way that these startups are winning over investors. StartUp Health and similar incubator and accelerator organizations are serving as breeding grounds for innovation, providing support for entrepreneurs and helping connect them with investors, advisors and providers who are piloting technologies. Aging2.0 is among the most high-profile of these organizations, and was the focus of CNBC’s recent coverage of the rise in senior care startups.
Among the Aging2.0 entrepreneurs that CNBC spoke with was Andreas Forsland, whose company Smartstones is developing stone-sized sensors to help people with disabilities communicate. Forsland’s message to reporter Constance Gustke is one that senior housing providers may be wise to take seriously.
“There’s a lot of complacency [in the industry],” he said. “And the attitude is that if isn’t broken, don’t fix it.”
But, he concluded, senior living communities that take this position and lag on innovation are likely to see their pipeline of residents dry up.
*Editor’s note: This article has been updated from its original version to reflect that Scott Moody’s former company created the technology behind Apple TouchID. The original article referred to Scott Moody as the mastermind behind Apple TouchID.
Written by Mary Kate Nelson and John Yedinak