One of the themes that we have been investing against for some time has been in what we’d call the “Care Economy”. This comprises the time and dollars spent against caring for the needs of another person. It’s a truly universal experience, one that every one of us has and will grapple with several times in our lives. It’s an area that has been largely untouched by technology, but is quickly being redesigned through the ingenuity of entrepreneurs and the ever-expanding reach of digitization.
The Care Economy is enormous. We tend to break it down into two big areas. The first is caregiving for children, especially babies and infants. This is both a huge category of spend in its own right (Americans spend $70B on baby products annually), and has an enormous secondary effect on our economy because of the time spent caring for young children and the resulting potential productivity lost. We are proud of the investments we have made in this space thus far, including TenLittle which is focused on personalized and predictive commerce for busy parents as well as Bobbie which provides a best-in-class, Organic, FDA approved formula that is a healthy alternative to the existing duopoly in the market. We are actively looking for more investments in this space, especially ones that seek to address the inefficiencies and shortage around childcare and early childhood education. We had previously made an investment in this space which was not ultimately successful. But this is the rare case where we have so much conviction about the importance of the problem that we are actively looking for an opportunity to try to go after the challenge again.
The other, perhaps even larger segment of the care economy is around caregiving for aging adults or those dealing with severe illnesses. The scale of this opportunity is truly staggering, with estimates that as many as 50 million Americans serve as unpaid family caregivers for a relative. As my friend Jessica Kim from Ianacare often reminds me, unpaid caregivers really are the invisible backbone of our healthcare system. Because of this scale, the problems and opportunities in this space are varied and far reaching. We’ve invested in businesses that focus on the financial aspects of caregiving (Carefull), the practical needs of caregivers to purchase medical products and household consumables (Carewell), as well as businesses that directly support the health and quality of life of seniors (Devoted Health). But we are really just scratching the surface and could probably populate several entire portfolios of companies going after different aspects of this problem.
While this is an area that we are passionate about as investors, it is not without significant challenges. Customer acquisition tends to be a beast in these segments. One reason is that it’s more difficult to build trust and confidence with end users as a startup because the stakes are so much higher. Reaching consumers and onboarding them to a new service is more challenging and often requires live human interaction. The potential to create significant leverage from technology is certainly there, but is less developed that in other areas where we invest. Also, the ability to capture the value that a company helps to create is also challenging. Some buyers are very wary of predatory actors in these spaces and enterprises might find difficulty ascribing a clear ROI to services that support caregivers. And some buyers may just be so cash strapped that there are very few dollars to go around despite the acute needs. This is not a market opportunity for the faint of heart.
But it’s also an opportunity that really matters on a personal, economic, and societal level. It’s one that has been largely hiding in plain sight for years and years, but that many of us have been forced to grapple with directly during this pandemic. As thematic investors, we tend to surround problems with multiple companies and then follow the breadcrumbs as founders lead us to more needs in related areas. We’d made some investments in the care economy that we are super excited about, and we hope to get involved in more! If you know someone extraordinary who is devoting their powers towards some of these problems, please reach out and let us know if we can help.