Tech-enabled hospice startup debuts with$7M [Axios]
After being blindsided by her father’s laborious death, marketing executive Jessica McGlory started Guaranteed, a company that aims to give families a better way to care for loved ones in their last days.
Why it matters: A recent report from watchdog group Private Equity Stakeholder Project suggested that for-profit hospice agencies have been tied to lower standards of care, fewer patient visits, higher rates of hospitalization and poorer worker compensation than their nonprofit counterparts.
- “Private equity has made [hospice] almost its playground,” McGlory tells Axios. Her startup envisions superior, tech-enabled hospice care in the comfort of home.
Driving the news: New York-based Guaranteed raised $6.5 million in seed funding led by BrandProject with participation from Precursor, Springbank, Lakehouse and Cake Ventures, bringing total funds raised to just over $9 million.
- The round marks one of the largest seed rounds for a Black female solo founder.
- Before 2021, only 93 Black female founders had raised $1 million or more in venture capital, according to ProjectDiane, a biennial report on the state of Black female and Latina founders by Digitalundivided.
- Guaranteed will use the funds to hire hospice and clinical care professionals, engineers and marketers.
By the numbers: Hospice care is an estimated $34.5 billion market expected to reach $64.7 billion by 2030, per Grand View Research.
- Private equity has poured investment dollars into hospices of late, with 30% to 50% of all home health and hospice transactions in 2021 involving PE firms, according to M&A advisory firm The Braff Group.
- That figure is on the rise, per a 2021 analysis that found that the number of hospice agencies owned by PE groups rose from 106 (of 3,162) in 2011 to 409 (of 5,615). About three-quarters of PE-acquired hospices were nonprofits.
The intrigue: Sponsors have come under fire in recent years from legislators and regulators including President Biden, who in his State of the Union address called out PE investors for their role in raising costs and reducing quality at nursing homes.
- Meanwhile, the Government Accountability Office is investigating the ownership of nursing homes, with a report due to come out in the fall.
How it works: Guaranteed is Medicare-certified and has a Medicaid license in California, where it is launching.
- The company employs care teams including home hospice aids, nurses, dietitians, social workers and chaplains whom patients can access 24/7 through messaging and video calls.
What they’re saying: Andrew Black, a Guaranteed investor and the managing partner of BrandProject, tells Axios the tech-enabled hospice sector presents a window of opportunity for startups.
- “It’s an institutional category where a brand hasn’t really existed, and there’s room for one,” Black says.
Flashback: The idea for Guaranteed came to McGlory while she was caring for her father in hospice in 2019.
- Stumped by the source of her father’s severe pain and unable to get the attention of a nurse, she video-called a certified nurse assistant friend who was able to help.
- “Without that, we would have been out of luck and he would have continued to cry out in pain,” McGlory says.
One fun thing: After being immersed in a business landscape largely dominated by white men, McGlory set ambitious equity goals for her startup’s cap table: More than 40% of Guaranteed’s funding had to come from underrepresented investors.
- “Throughout my entire career I’ve had to be one of the only Black women in any room,” McGlory says. “I couldn’t let that happen at a company I’m building.”
- The end result: Half of Guaranteed’s capital came from a female- and/or person of color-led investment firm or angel investor.
The takeaway: McGlory envisions Guaranteed as providing people with the means to die in a dignified and respectful way — something her father did not have the chance to do.
- “The only thing that’s guaranteed for all of us is that one day we will die,” McGlory says, “but the thing that isn’t guaranteed is that when you die it’s comfortable, pain-free and filled with dignity. We wanted to create that.”