We’ve been following and writing about the “Digital Disruptors” in home care, Honor, Home Hero, and Home Team. This morning I came into the office to another news release saying that Honor has just raised another $42 million in capital in a Series B offering, following the $20 million they raised in their initial offering. Here are some highlights from the release:
SAN FRANCISCO, Aug. 8, 2016 /PRNewswire/ — Honor™ (www.JoinHonor.com), one of the fastest growing companies offering high-quality home care for older adults, announced today it has raised $42 million in Series B funding led by Thrive Capital. Additional investors include 8VC, Andreessen Horowitz, and Syno Capital.
This new $42 million investment brings the total raised to date to $62 million. And with an exceptional team of supporters, Honor can accelerate product development and enhance go-to-market growth strategy.
In other reports we have seen, Honor claims to be the largest home care provider in the San Francisco Bay Area. They recently expanded to the Los Angeles market, and just announced an expansion to Dallas.
Honor Facing the Caregiver Crisis
As we have talked with CEOs of leading home care companies in California, many questions are hanging out there. Competitors are trying to figure out how many clients Honor is actually serving, and how they can find enough caregivers to meet their aggressive expansion plans.
Seth Sternberg, Founder and CEO, has said, ““We need way more care pros. It’s a really tight labor market. There are 2.5 million care pros in America, but the rate at which the population is aging means we will need massively more care pros in the next 10 to 20 years.”
Welcome to the Caregiver Recruiting and Retention Crisis, Seth. At Leading Home Care, we’ve been tracking this industry trend for the past 18 months and have conducted significant research on the best techniques to find top quality caregivers. You can download a copy of our 2015 Caregiver Recruiting Study, sponsored by HomeTrak. We are now working on our 2016 Best Caregiver Study in conjunction with the $5 Million Mastermind Group and the Strategic Growth Mastermind Group.
Can Honor Get Traction Before They Burn Through Their Cash?
One of the questions we have heard from industry leaders has been, “Can Honor really get traction and generate the return expected by their investors before they burn through the initial $20 million?” Well, adding another $42 million certainly extends the time horizon.
As someone who has been monitoring trends in the home care industry for three decades, I have had some skepticism about this approach to using technology to solve the home care problem for consumers and family caregivers. I get calls frequently from entrepreneurs who are working on a technology solution to a senior care problem. Most of them fail early in their efforts. They fail to understand the home care is a people business built on personal relationships between clients and caregivers, and between family caregivers and home care company leadership team.
The original concept of Honor as the “Uber” of home care was destined to fail because home care is not a one-and-done transaction like Uber. However, I’m not about to write off Honor, Home Hero, or Home Team and their ability to disrupt our industry. These are very smart people with a lot of money behind them. They will figure this industry out, and they will develop solutions.
Create Strategic Focus
The answer is to create Strategic Focus. We define Strategic Focus as “having a clear vision for the future, having a strategy to get there, and having the talent to execute with excellence.” To talk about creating Strategic Focus in your home care business, give us a call at 502-339-0653.