Seth Sternberg, Honor CEO
Honor has closed a Series B round to support its first major expansion beyond California cities in what will be a critical test for the caregiving startup. In a phone interview, Honor CEO and Co-founder Seth Sternberg talked about the company’s priorities for the $42 million it has raised and product development tweaks to reduce hospital admissions.
Thrive Capital led the financing round. Thrive’s managing partner and co-founder, Joshua Kushner, also co-founded health insurance startup Oscar. Other investors that took part in the Series B were 8VC, Andreessen Horowitz, and Syno Capital. To date, Honor has raised $62 million, according to data from Crunchbase.
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Sternberg said of its move to add Thrive as an investor that he liked the technology entrepreneur experience of the firm’s management, particularly its healthcare entrepreneur experience in New York. Sternberg has said that he wants Honor to have a presence in at least 10 cities and it’s hard to believe that New York wouldn’t be among them.
One part of Dallas-Fort Worth region’s appeal for a caregiving service like Honor’s is that nearly 10 percent of the population are retirees, according to a 2013 estimate. Although its client base also includes people with cancer and Parkinson’s disease, seniors are an important part of its target market and make up half of its customer base.
He noted the company was aggressively hiring caregivers, engineers, sales and marketing staff and other roles to support its expansion to Dallas Fort Worth. The move marks a test for the business because, as Sternberg observed, it will require more than a quick jaunt between San Francisco and Los Angeles to address any growing pains that may arise from adding a new market for the business. The expansion to Texas also gives the company exposure to regulations in another state. Although he declined to share numbers on Honor’s personnel stats or just how many staff the company is seeking for Dallas Fort Worth, Sternberg said “the more, the merrier.”
He noted that there is no shortage of companies in the caregiving space, but he did not see any of them doing what Honor is doing. He also said that customers don’t think of Honor as a technology company.
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“There are 50,000 agencies trying to do home care. All of them want to help the elderly with their health, but how are they changing the game? Are they uniquely positioned to use technology?”
As a way to drive home the difference between his company’s approach and the level it raises caregivers’s expectations, Sternberg recalled the response he sees from caregivers when they receive an automated email from the company confirming they have been paid. A lot of its “Care Pros,” as the company calls its caregivers, email a thank you note to the automated message.
“It blew my mind because they are not used to being regularly paid. That is very important to understanding Honor and how it operates,” Sternberg said.
He observed that since Honor got up and running, the average number of hours the company’s caregivers work has increased. “We’re using way more caregivers than we originally modeled [for the business].”
Sternberg also talked about product development — specifically, the addition of a set of questions caregivers ask clients. The “wellness check” app prompts caregivers to query clients on things like how they have eaten, how much they are drinking, sleeping, etc. The goal is to build a baseline for each customer so that caregivers can spot behavior that deviates from the normal pattern and intervene earlier before the problem escalates into a hospital admission or readmission.
