Only 12 percent of $5B invested in digital health is for companies focused on older adults

By all accounts digital health funding is hitting new highs with companies in this sector accounting for $5 million in investments through the third quarter of this year. But digital health companies with solutions dedicated to the 70 million seniors who will account for 40 percent to 45 percent of the population next year account […]

By all accounts digital health funding is hitting new highs with companies in this sector accounting for $5 million in investments through the third quarter of this year. But digital health companies with solutions dedicated to the 70 million seniors who will account for 40 percent to 45 percent of the population next year account for only 12 percent of that investment. A new report by StartUp Health highlights these investment trends.

So what are some of the companies focused on the 50+ market that StartUp Health is referring to? In response to an emailed query, StartUp Health co-founder Unity Stoakes listed a few businesses. eCaring, for example, raised $3.5 million in April for a monitoring program that supports aging in place. CareLinx, which matches up users with caregivers and allows them to do background checks, raised $1.5 million. Other companies include Care at Hand, CarePredict, LifeAssist, and WalkJoy

Care navigation and vital sign monitoring are considered the top two subsectors in the 50+ market by investment.

One reason why companies specifically targeting seniors account for a relatively slim percentage of this investment is that there are several segments of digital health that are seen as a risky investment if seniors are the only focus. The comfort level with digital health varies quite a bit depending on age. Take online social communities. Although there are plenty of members of the early side of the 50+ demographic that easily navigate the Internet and spend a lot of time on computers, these communities are not really designed for the seniors that need them the most — people in their 70s and 80s who are isolated and alone. They are typically used alongside their children or grandchildren who possess the IT literacy necessary to navigate them.

Another investment trend highlighted in the report is the dominance of the B2B2C model, which drew the lion’s share or 55 percent of investments for 50+ focused companies — $148 million. Investors’ appetite for business to consumer companies targeting seniors is a bit larger than in the broader digital health market, accounting for 30 percent of investments or $80 million.

StartUp Health’s report follows an overlapping theme with a joint report between it and AARP released last month that highlighted areas of the senior market that represented the least and greatest risk for investors. Not surprisingly segments that represented a broad range of applications for young and older people, such as medication management, were considered less risky.

For those entrepreneurs prepared to assess the needs of this population, particularly by talking to people in this demographic about what they want, the market opportunity could be significant.