Brief interview with HomeHero's Kyle Hill

Startup looks to dominate the senior care market

We all know that the baby boomers are aging. In fact, since they started crossing over the 65-yr-old threshold four years ago, they're the group that's causing this senior demographic to nearly double to 88 million by 2050, according to one report. 

This growing population has many innovators trying to come up with a solution to care for them.

One company is Santa Monica, Calif.-based HomeHero, which launched in January 2014, with 20 caregivers. The company matches caregivers with seniors who need care at home.

After getting some initial funding of around $1 million from Science, it went on to raise $2 million in August 2014, led by Social+Capital Partnership, and now it's raising $20 million in a Series A round, led by Graham Holdings Company with participation from Social+Capital Partnership, Tencent Holdings Limited and The Launch Fund. 

Here's a brief interview with Kyle Hill, co-founder and CEO of HomeHero [slightly edited].

Q: Care.com is trying to address in-home senior care. How is this marketplace different?

Hill: From the outside you can say they’re similar, but we couldn’t be more different. For starters, we are a marketplace focused on senior care. More than 70% of Care.com's business comes from babysitters, pet-sitters, nannies, etc. [I believe] senior care is around 15%. We’ve put an huge emphasis on that. We pride ourselves on having a matching process for seniors and caregivers. We want to match families with reliable caregivers. If you go to Craigslist or elsewhere, you’ll get 10,000 results. It’s an extremely overwhelming number to sort through. We focus on matching you with a caregiver. We give you three matches back, given the caregiver's skills, location, start-time, and other conditions your family provides. And you get a video interview with the caregiver. We also automate schedules and payments to facilitate.

Q: What are some information you collect to find the best caregiver?

Hill: We ask, 'What’s your gender preference; what’s your schedule; what skills are needed; what kind of patient are you (e.g. Are you an HIV client?)' Then on the other side, we match you with caregivers that have those. Often times, we can match someone within an hour. Average is about 4 hours to find matches. We usually like to give three to four results. The bottleneck isn’t us, it’s the family. We’ll have a match, but the start time will be the next day.

Q: How's the economic model different from say Care.com? 

Hill: On Care.com, you pay a fee to get access to the site. We're not a subscription model. We're paid when there's a connection. And we have a 24-7 customer service line. You can call us at 3 am in the morning and we can send a caregiver there. We consider ourselves a full-service homecare provider. Also, our model is our fee is about 40% lower than homecare agencies that have real people servicing your needs. Because we use so much technology, we cut off a lot of the costs. For example, we have an automated billing system, whereas an agency has two or three people handling billing. So we’re able to offer 40% lower, and we take a fee.

Q: What are your rates and what do caregivers get?

Hill: On average, we charge $18 an hour in LA, San Francisco is about $21 an hour. Caregivers keep 85% typically. Most agencies charge $30 an hour and a caregiver gets $10 an hour. And they get a monthly or bi-monthly check. With HomeHero, they can get paid every day. 

Q: Doing their videos is expensive. How are they produced?

Hill: They come to us to get those videos done. Also, we meet every single one of our caregivers.

Q: How do you handle "backdooring" [when the caregiver and senior come together but bypass paying the fee]? 

Hill: It’s not a problem in our industry. First of all, we charge such low prices and we ikeep such a low price that cutrting us out isn’t woth it. Plus we have 24 hours support and we have a $4 million insurance policy. The 24/7 service and $4 million policy is good and we give daily email summaries to friends and family.  That coupled with the fact that if caregivers backdoor us, it’s very hard to find work in this industry, and they [won't be able to hide the fact that they've cut out an agency]. Also, remember – the person receiving the care isn’t the one paying for it. The son/daughter is paying for the care. It’s not as easy to disintermediate.

Q: How many patients do you have?

Hill: I can’t disclose the number of clients, but we’ve provided one million hours to families.

Q: Why did this sector interest you? 

Hill: I really struggled with watching my dad go through this process of finding care for my grandmother. I saw how hard it was for him to find them, screen them and manage them. I started building technology for my dad. I took a lot of that and putting it into HomeHero. My grandmother became the first client. 

Q: What did you do prior to this? 

Hill: I worked for a startup FlowTab, which helped bars receive mobile drink orders. It was a marketplace. We scaled to three different cities. Then I just got so distracted helping my dad, We ended up closing up FlowTab and solving a much bigger problem. We raised $150,000 for FlowTab.

Q: What was the incentive to get your initial caregivers on board?

Hill: It’s everything we discussed: higher wages; own the relationship with clients, More flexibility and getting paid faster. Also, we have beautiful profiles that show your certifications, etc. It's kind of like LinkedIn for caregivers.  

Q: How many caregivers do you need to launch in a city?

Hill: Around 25-50 caregivers, we’re comfortable launching in a city.

Q: Where do you plan on opening up next?

Hill: Our focus will be on the three cities for remainder of year. We’ll start seeding the next cities in the fall. We’ll look at southern sunbelt – Texas, Arizona.