- It’s a striking fact, but 73% of employees in companies care for someone close to them. This diverts their time, energy, and brains from work — negatively impacting their productivity.
- The horror is that this problem will only worsen due to the increasing percentage of elderly population. The trick is that it’s cheaper for companies to pay for assistance to such employees from an external service — and get a triple return on these investments!
- The market is huge, and the size of the problem is growing. But you can still enter this market by creating a fairly simple service following the example of these startups:
Project Essence
Cariloop comes in with a trump card right away. It claims that “up to 73% of your employees have issues because they are forced to care for someone close to them.”
This could refer to parents with children, those caring for sick relatives, or those with elderly parents — all of which consume time, energy, and nerves from the individual. Moreover, it also affects their work — the amount of time, brainpower, and enthusiasm they can devote to it.
Cariloop provides these individuals with a variety of assistance — improving mental health, consultations with specialists, assistance in finding caregivers, legal, and financial services.
Users access the full range of services through the service’s application — where they can find the necessary information, specialists, send and receive documents, or ask questions to the support service.
Additionally, the application includes a community where users can get advice and support from other service users who are also involved in caring for their loved ones.
However, service users are not left to fend for themselves. Each user has access to special coaches who help create a plan for what needs to be done and how, provide advice in case of questions, and take on tasks that can be delegated.
In principle, any individual can subscribe to the service.
However, the section for individual users consists of two questions: “Would you like your employer to start offering you and your colleagues our service?” and “Are you by any chance a human resources manager who wants to implement our service in your company?” 😉
Because Cariloop’s main business model is B2B. They sell their service to companies, which in turn offer its services to their employees. The problem is that American companies lose $44 billion annually due to decreased labor productivity, absenteeism, and turnover of employees caring for their loved ones. This is the money the startup proposes companies to save by shifting the support of such employees onto its shoulders.
The startup claims that companies that have become their clients have received a triple return on investment in paying for their service — adding more than 300,000 employee work hours cumulatively that they would have otherwise spent solving problems related to caring for their loved ones.
Although Cariloop has been around for a while, it has seen active growth in the last 3 years — its revenue has quadrupled during this time. Moreover, companies are starting to connect more employees to the service and pay more for it — NRR (Net Revenue Retention, growth in average revenue per customer) is currently at 120%.
Against the backdrop of such growth, Cariloop has now raised $20 million in investments, increasing the total investment in the project to $43.1 million.
What’s Interesting
It may seem that Cariloop is deliberately telling horror stories to scam companies out of money. But the problem is very serious in reality.
The number of Americans caring for their loved ones is indeed huge — and it’s also growing. In 2015, 43.5 million Americans cared for their loved ones, and by 2020, it had risen to 53 million. That’s 19% of all Americans! Moreover, 61% of them are employed, and 21% of them also assess their own health as poor.
The situation continues to worsen, in part because the number and percentage of elderly people are increasing as life expectancy rises. In 2020, there were 35 million Americans over the age of 65, and by 2060, there will be 2.5 times more — 94.7 million.
If we take this number as a percentage of the total US population, the percentage of people over 65 will increase from 13.1% in 2010 to 22% by 2050.
This means that even more people will be forced to care for their elderly relatives. And the problems for companies in connection with this will only increase.
Since the problem is really huge, today’s Cariloop is not the only startup tackling it.
startup Wellthy, which made a similar service and also sells it to companies. It raised $78 million in investments.
Following the same path is the startup ianacare, which I wrote about at the beginning of 2022. They raised $18.1 million in investments, some of which they received after my review.
Where to Go
The increasing demand for such services among companies is driven by two factors.
Firstly, the overall unfavorable financial situation requires companies to increase labor productivity, meaning they need to handle more work with fewer employees. However, an employee who is distracted by the time, mind, and soul spent on caring for their loved ones cannot work with the necessary efficiency.
Secondly, the rising percentage of elderly people increases the percentage of company employees experiencing similar problems — which further negatively impacts labor productivity.
The market for services like Cariloop, Wellthy, and ianacare is unlikely to be monopolized, as there is no strong network effect in the business model of these services. Therefore, the number of similar services will continue to grow, but each of them will find its clients.
Thus, the potential direction for movement is towards creating similar services that help people caring for their loved ones.
Their model is quite simple and understandable. So, nothing special is required to start — except the ability to sell services to companies 😉 However, the ability to sell is critical for any business. And here, there is also a proven need, a wide market, and timeliness associated with the organic growth of the problem.
About the Company
Cariloop
Website: cariloop.com
Latest Funding Round: $20M, April 9, 2024
Total Investments: $43.1M, Rounds: 7