Venture capital and private equity firms are still putting their dollars into the senior living and long-term care industry.
That’s according to Axios, which aggregated data from a study by the Journal of the American Medical Association (JAMA).The study shows venture capital investments outpaced private equity investments in 2022. Last year, the margin was nearly identical for both investment types in senior care.
The value of investment in 2022 by both venture capital and private equity is far lower, under $1 billion, than the deal value reported in 2021 when venture capital invested in deals worth well-over $2 billion. But the overall rate of investment was comparable between 2021 and 2022 as private equity outpaced venture capital investment last year and venture capital outperformed private equity investment this year.
The senior living industry has attracted investments from a variety of spheres in recent years. In particular, private equity investment has surged since the start of the pandemic as companies see the allure of demographic trends in senior care.
General Atlantic managing director and global head of health care Robbert Vorhoff told Axios that addressing health inequities is “low-hanging fruit for some investors and entrepreneurs.”
Those demographic figures, coupled with the use rate of healthcare in those over 65-years-old, show that senior care “makes for a gold rush that can’t be matched elsewhere.”
Axios termed the investment by private equity and venture capital firms as a “financial arms race” in senior care, which shows capital investment is following innovation across the care continuum.
“Most of the innovation and new business models that have been developed have been about trying to keep people out of long-term-care facilities,” Devin O’Reilly, managing director at Bain Capital, told Axios.
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