After being shocked by her father’s painstaking death, marketing executive Jessica McGlory founded Guaranteed, a company that aims to give families a better way to care for their loved ones in their final days.
Why it matters: A recent report from the watchdog group the Private Equity Stakeholder Project suggested that for-profit hospice agencies have been linked to lower standards of care, fewer patient visits, higher hospitalization rates, and lower labor compensation than their nonprofit counterparts. profit.
- “Private capital has done [hospice] almost his playground,” McGlory tells Axios. His startup envisions superior hospice care, enabled by technology, in the comfort of home.
Driving the news: New York-based Guaranteed raised $6.5 million in seed funding led by BrandProject with participation from Precursor, Springbank, Lakehouse and Cake Ventures, bringing the total funds raised to just over $9 million.
- The round marks one of the largest seed rounds for a solo Black female founder.
- Before 2021, only 93 black female founders had raised $1 million or more in venture capital, according to ProjectDianea biennial report on the state of Digitalundivided’s Black and Latina founders.
- Guaranteed will use the funds to hire clinical and hospice professionals, engineers and vendors.
By the numbers: Hospice care is an estimated $34.5 billion market that is expected to reach $64.7 billion by 2030, by Great view research.
- Private equity has poured investment dollars into hospice lately, with 30% to 50% of all home health and hospice transactions in 2021 involving private equity firms, according to mergers and acquisitions advisory firm The Braff Group.
- That number is on the rise, according to a analysis 2021 which found that the number of hospice agencies owned by PE groups increased from 106 (from 3,162) in 2011 to 409 (from 5,615). About three-quarters of the hospices acquired by PE were nonprofit organizations.
the intrigue: Sponsors have come under fire in recent years from lawmakers and regulators, including President Biden, who in his State of the Union address called PE investors for his role in increasing costs and reducing quality in nursing homes.
- Meanwhile, the Government Accountability Office is investigating nursing home ownership, with a report due in the fall.
How does it work: Guaranteed is Medicare certified and licensed by California Medicaid, where it is launching.
- The company employs care teams that include home hospice aides, nurses, dieticians, social workers and chaplains that patients can access 24/7 via messaging and video calls.
What they are saying: Andrew Black, a secured investor and managing partner at BrandProject, tells Axios that the tech-enabled hospice sector presents a window of opportunity for startups.
- “It’s an institutional category where there hasn’t really been a brand and there’s room for one,” says Black.
Retrospective scene: The idea for Guaranteed came to McGlory while he was caring for his father in a hospice in 2019.
- Perplexed by the source of her father’s severe pain and unable to get a nurse’s attention, she video-called a certified nursing assistant friend who was able to help.
- “Without that, we would have been out of luck and he would have continued to cry in pain,” says McGlory.
A fun thing: After being immersed in a largely white male-dominated business landscape, McGlory set ambitious capital targets for her startup’s cap table: More than 40% of Guaranteed’s funding had to come from underrepresented investors.
- “Throughout my entire career, I’ve had to be one of the only black women anywhere,” says McGlory. “I couldn’t let that happen at a company I’m building.”
- The bottom line: Half of Guaranteed’s capital came from an investment firm run by a woman and/or a person of color or an angel investor.
Food to go: McGlory envisions Guaranteed as a way to provide people with the means to die in a dignified and respectful way, something his father didn’t get a chance to do.
- “The one thing that is guaranteed for all of us is that one day we will die,” says McGlory, “but what is not guaranteed is that when you die it will be comfortable, painless and full of dignity. We wanted to create that.”