A startup that's raised $115 million once wanted to disrupt the multi-billion home care industry - now it's working with it
- Honor, a senior home care startup that wants to use technology to better care for seniors in their homes, has changed the way it's doing business.
- Honor switched up its business model in late 2017 to start working with home care agencies to staff their practices - rather than compete with them for clients. "They're really good at being deep in communities," CEO Seth Sternberg told Business Insider.
- To date, Honor has raised $115 million from backers including Andreessen Horowitz and Thrive Capital.
Home care startup Honor is no longer looking to disrupt the healthcare world in the same way that Uber redefined the taxi industry.
After learning that upending the existing home care world would be more difficult than it had imagined, Honor is crafting a new strategy. The company is now working with established home care agencies by supplying them with technology and employees to take care of their senior clients. It'd be like if a rideshare startup were to supply existing taxi companies with drivers and an app for customers to use.
Honor is part of the multi-billion-dollar home care industry, one that's growing as the elderly population booms in the US. The idea is that having an extra hand at home could help otherwise healthy elderly people stay independent for longer, and hopefully out of the hospital.
Honor helps out on the non-medical end of things, supplying care professionals that can assist elderly clients with daily chores, transport to a doctor's appointment, grocery shopping, or other activities that are part of daily life, while streamlining the process using technology.
As Honor got its start, it went head-to-head in competition with the established senior care agencies that were in each of the cities Honor branched into.
"There's no customer we don't compete for. We compete for every single customer," Honor CEO Seth Sternberg told Business Insider in August 2016. The system of agencies, Sternberg said at the time, was historically "fragmented."
But late last year, Honor started working with the agencies it once sought to be in competition with.
Instead of competing to recruit elderly clients to use Honor instead of another local agency, agencies have started to use Honor's technology and staffing capabilities to send out care professionals to the clients they manage.
"They're really good at being deep in communities," Sternberg told Business Insider. Healthcare - from the pharmacy to the doctor's office to the hospital - is a local experience, and that extends to home care as well. Because home care agencies are already embedded into local communities, Honor doesn't have to replicate that work or compete against them. Now, the company can just plug itself in, handling a lot of the logistics that are similar from agency to agency.
In May, Honor raised an additional $50 million in a round led by South African tech firm Naspers Ventures to build out its "Care Network," the group of home care agencies that use Honor. To date, Honor's raised $115 million.
How home care agencies use Honor
Working with the home care agency and through Honor's technology (housed in an app and online), Honor lines clients up with a "Care Pro" (the home care professional) who's a good fit and has the right expertise to help out that elderly client. Through the app, family members can schedule times when they need a Care Pro to stop by, add details, and monitor to make sure the visit actually happened.
That way, the Care Pros, the seniors receiving care, the agency that linked the seniors to the Care Pros, and their loved ones are all connected through Honor's app.
Now that it's working with agencies, most of that process stays the same, but the agencies set up the clients. Honor takes on a lot of the administrative tasks, which has been a big help to Laurie Miller, who runs Apple Care and Companion in Dallas, Texas and started working with Honor at the end of 2017. Miller started her agency with her mother in 2006. Over the last decade, she's seen the home care industry go through some big changes.
"It's like night and day," she said. Recruiting care professionals has gotten more competitive as her small business goes up against not just other home care clinics but nursing homes and other professions.
Because of that competition, Miller would often quadruple shift interview appointments, hoping even one candidate would show. Now, Honor employs the Care Pros that work with Miller's clients.
Not having to recruit gives Miller more time to grow the business, she said, especially because she can bring on additional care professionals as needed.
Miller also used to rely on an on-call cell phone that clients could ring if they needed care. Miller and other Apple employees would take turns bringing the phone home overnight and would grapple with finding someone available at an odd hour of the night.
Now that she's using Honor, clients can call the startup instead.
Honor has set up shop in San Francisco, Los Angeles, and the Dallas-Fort Worth area. It has also expanded to Albuquerque, New Mexico, to see how the company could fare in a less densely populated area. So far, it's been easier than other places, Sternberg said, in part because there's less traffic for Care Pros to get caught in on the way to a visit.
Shaking up the senior home care industry has had some growing pains beyond Honor. In February 2017 Homehero, a startup with $20 million in funding, shut down its home care business and pivoted to a healthcare venture. Hometeam, a New York-based home healthcare startup, in May hired a new CEO as part of its push to work more closely with health plans including Medicare and Medicaid.