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Aging Ventures and Silver-Tech — A Global Megatrend Guest Post by Dov Sugarman, an Expert in Senior Care Technology

Global demographics are changing dramatically. Longer life spans and lower birth rates mean that the proportion of older people in populations around the world is rising rapidly. In 2015, there were approximately 1.6 billion people in the world aged 50-plus. By 2050, this number is projected to double to nearly 3.2 billion people. In the US alone, 30.000 people will retire every week from today and until 2030. The aging of society poses both challenges and opportunities to governments and private sector companies alike and is having a transformative impact, economically and socially.

Known as the Longevity Economy, this fast growing market segment consists of people who are living longer and will thus continue to fuel economic activity far longer than past generations had. The US alone is home to 111 million in the 50-plus cohort; whose spending on consumer goods and services, including health care is responsible for at least $7.1 trillion in annual economic activity, with that number expected to grow to over $13.5 trillion by 2032. The outsized economic value of the 50-plus-year-old group is largely powered by their share of wealth: 83 percent of US household wealth is held by people over 50.

The past couple of years has seen the creation of several dedicated funds targeting investments in companies developing innovative solutions for seniors. In 2014, Generator Ventures and Formation Capital launched a stage agnostic fund to invest exclusively in the aging and long-term care market. In 2015, Ziegler, a leading healthcare investment bank with a significant presence in senior living and Link-Age Ventures created the Ziegler Link-Age Longevity Fund, to invest in companies that provide innovative products, services, and technologies to meet the growing needs of seniors and senior living providers. Also in 2015, AARP, the gigantic US senior citizen organization with 37 million members, and JP Morgan Chase launched the AARP Innovation Fund to invest in early-to-late stage companies that have technology and solutions that better the lives of the 50-plus set.

And even Silicon Valley’s most famous venture capitalists have begun betting on the “silver tech” niche. One particular area that has seen extensive investment recently is homecare. Homecare is a huge growth market and one that has seen relatively minimal technological disruption. This growth is driven in large part by demographics, and by the increasing preference among seniors to age in place in their own homes, even those who need some assistance with daily activities. According to the AARP Public Policy Institute, 89% of Americans aged 50 and over indicate that they want to remain in their homes as long as possible. The fact that many or most will eventually need some in-home assistance, coupled with a growing scarcity of willing workers, requires scalable models for service provision in the community.

In fact, more than $200 million was invested in 2016 by many of the most prominent venture firms in a variety of companies developing online tools and services for arranging and providing home care. One of the most notable was Andreessen Horowitz, who invested $15 million in the online caregiving marketplace Honor. While millennials may still matter most to investors, increasingly the older adult population presents an attractive investment opportunity globally, given the size, growth, and complexity of its needs. While still in a nascent stage, there is no doubt that this will be an increasing opportunity, over time.

Dov Sugarman understands aging and is a recognized thought leader in the field of senior care technology. He has an MPH in Health Policy and Management, and a BS and MS in Nutrition, and is the Israel representative for Aging2.0, the global innovation platform on a mission to accelerate innovation to improve the lives of older adults around the world.

His 20-year career includes managing senior services (nursing homes, assisted and independent living, and adult day care) in the United States, co-founding an internet startup, a senior management role at digital pioneer 888, and leading Technology for Aging at JDC-Eshel, Israel’s leading senior services development agency. Dov is currently responsible for strategic partnerships at the insure-tech startup SafeBeyond, and frequently consults with entrepreneurs working on startups in the senior services space in Israel and abroad.

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