Care: The $6T Market That Makes All Other Work Possible
The Artemis Fund believes technology can create prosperity for all. With offices in New York, Texas, and Nevada, Artemis leads seed rounds for companies creating resilient families, individuals, and businesses across the US.
What is the Care Economy? It’s the work of caring for our loved ones from their first breath to their last. According to an analysis by Pivotal Ventures, the care economy is valued at $650B. A recent BCG study estimates that the care economy is worth $6T. More than half of that value estimated by BCG is driven by unpaid care labor and family caregivers. BCG estimates that 90 million people (56% of working adults) contribute unpaid care labor to loved ones on top of their full-time jobs.
A Broken System for Modern Families
Gone are the days when most families could afford a stay at home mom. Compared to less than 50% in the 1960s, over 70% of moms participate in the labor force today. The public system is antiquated and doesn’t support the needs of modern families. Food for thought:
- Who is caring for your children this summer? Now imagine you didn’t have that support or couldn’t afford that sitter or camp. Further imagine you work night shifts. How do you find and afford non-typical coverage?
- The average school day is 8:00 a.m. to 2:00 p.m., and the average work day is 9:00 a.m. to 5:00 p.m.
- The US mandates that school-age children attend school 180 days a year, or approximately 36 work weeks. That leaves another 80 days (16 work weeks) for parents to figure it out themselves.
- According to the Care Report by New America, “U.S. public policy has made care for children under five into a “private” matter that families are expected to (and struggle to) manage. Summer is the time of year when this private management expands to parents of school-age children.”
Care is expensive and the supply is lacking. More than 1.8 million care economy jobs are unfilled, including nursing assistants, home health aides, childcare workers, and many more occupations.
Consider the average cost of care for one child is $11.5K annually. A recent report by Childaware.org indicates that families with two children in a childcare center paid at least twice as much for that care as they did for the typical rent in 11 states and the District of Columbia last year.
- The national average childcare cost requires 10% of the median household income of a married couple with children.
- The national average childcare cost is 32% of the median household income of a single parent with children.
- This is well above the recommendation from the U.S. Department of Health and Human Services that childcare should not cost families more than 7% of their annual income.
Leaving the workforce can devastate an individual and family’s earning potential. For example, a 32-year-old woman earning $60,000 a year who stops working for five years to be a stay-at-home mom will lose $300,000 in wages. This is compounded by another $400,000 in lost wage growth and retirement benefits, for a total of over $700,000 in lost wages and benefits. This calculator from the Center for American Progress helps parents understand the long-term costs of full-time caregiving.
Longevity Sandwich — Who Will Care for Our Aging Parents?
In addition to rising childcare costs, twenty-five percent of all US adults are now part of the so-called “sandwich generation,” meaning they have financial costs related to caring for at least one child and a parent 65 or older. The average cost of care for an aging parent ranges from $24K-$117K annually.
Care is an Economic Imperative, Not a Personal Matter
When unpaid and paid care falls through, workers must step up for their loved ones. This means more caregiving employees are at risk of missing work and even leaving the workforce. For every ten unfilled paid care roles, one full-time worker exits the workforce in another part of the economy.
According to the U.S. Bureau of Labor Statistics, as many as 100,000 Americans have been forced to stay home from work each month because of childcare problems. The economic toll now amounts to $122 billion each year in lost earnings, productivity, and revenue. By 2030, the US will lose $290B in GDP each year in lost productivity due to the lack of adequate and affordable care.
The data makes another crucial point: When caregivers have access to better solutions, our society will be more equitable, our businesses will be more competitive, and our economy will be stronger. — Pivotal Ventures
One Solution? More Female VCs.
Over 300 care-tech companies have raised venture capital since 2016, and care-tech companies raised $3B in 2021 alone. Investments in home care and eldercare also increased nearly threefold between 2017 and 2021. In 2022, child-care startups brought in almost $108 million in venture capital funding, a 128% increase over 2019.
The rise of women-led VC firms and more female VC partners is driving capital to solve these problems. Women still spend more time than men on unpaid care work in both absolute and relative terms. Paid care work is also still overwhelmingly undertaken by women—and disproportionately by women of color. As the number of investors taking a gender or racial equity lens to their investment strategies has grown, they are targeting the care sector.
The Artemis Fund is part of a small but growing number of funds investing in care innovation, including Pivotal Ventures, Magnify Ventures, Gingerbread Capital, Cake Ventures, Springbank Ventures, and more.
Our Current Care Tech Portfolio
- HopSkipDrive: The care burden falls disproportionately on women, who make up 80% of unpaid caregivers and spend 20–40 hours per week providing family care. HopSkipDrive is addressing this issue by connecting school districts and parents with highly vetted CareDrivers to safely and efficiently transport children. Their strategic routing software, RouteWise AI™, optimizes routes to maximize resources, reducing the bus fleet sizes by 16%, cutting costs by up to 40%, and decreasing commute times by 50%. Currently, HopSkipDrive operates in about 20 school districts and served 32K children in 2023, logging 25M safe miles driven.
- Naborforce: Every day, 11,000 Baby Boomers turn 65. Globally, the number of people over 80 will triple by 2050. Naborforce is addressing this issue by leveraging technology to connect older adults and their families to a network of purpose-driven individuals in their community. These “Nabors” offer neighborly help and friendly connections, easing the burden on caregivers and providing much-needed support.
- Work & Mother: Twenty-four percent of women leave the workforce after giving birth. The U.S. economy could benefit from a $1T boost over the next decade if female labor market participation grew to levels seen in other developed economies. Work & Mother is bridging this gap by providing fully equipped lactation facilities that support working mothers and ensure employer compliance with FLSA regulations. Impressively, 90% of women using Work & Mother suites are still breastfeeding at six months, compared to the national average of 58%.
- Hello Divorce: In the U.S., a divorce occurs every 45 seconds, contributing to a $50B industry that creates significant financial and emotional burdens on families, especially low-income and diverse women and children. Hello Divorce addresses this issue by offering a combination of software and human support to manage almost any kind of divorce. Users have access to specialized divorce finance specialists, mediation, and lawyers on demand at affordable rates. Their post-divorce product, Hello Next Chapter, provides families with the support needed for financial success following a divorce. In 2023, Hello Divorce served 1,500 families, helping them save a collective $19 million.
Care Investment Themes
- Childcare: The U.S. infant and childcare market is valued at $136B. Childcare is crucial for supporting children’s healthy development and learning, as well as enabling caregivers to work, train, or pursue education. Innovative companies we are following in this space include Wonderschool, Kinside, Patch Caregiving, Onsite Kids, and June Care.
- Pediatric Care: The U.S. pediatric care market size is valued at $38B. Parents spend an average of 6.4 hours per day coordinating, taking kids for care, and missing work. The Artemis Fund is interested in reducing friction, and increasing supply, access, and convenience of pediatric care. Innovative companies within our pipeline in this space include Coral Care, Summer Health, Expressionable, and Backpack Healthcare.
- Aging in Place: The U.S. aging-in-place market size is valued at $151B. Americans are living longer and seeking solutions allowing them to age independently. Innovative companies within our pipeline in this space include Graceful Finance and Carefluent.
- Parental Benefits: Employers lose $23B annually in revenues and employee replacement costs due to lack of care. Care benefits increase employee engagement and retention. Innovative companies within our pipeline include Sprout Family, Mirza, and Betterleave.
- Family Care: Major life events, including marriage, divorce, and family planning, drastically change the financial needs of families. Nurturing family environments contributes to positive outcomes in children’s growth and development, and the well-being of their caregivers. Innovative companies within our pipeline in this space include Canopie, Simplifed, and Afterword.
- Wealth Transfer: Baby Boomers (born between 1944–1964) hold an estimated $30T in wealth, including 2.3M small businesses. Beyond traditional estate planning, Artemis is interested in innovations that smooth the transition process and will allow younger generations to capture this value and create generational wealth. Innovative companies within our pipeline in this space include Trustate, Alix, and Peacefully.
- Fraud Prevention: Nearly 1 in 5 seniors have been victims of financial exploitation. Elder Americans lose between $2.6B and $36.5B each year due to fraud. We are seeking innovative companies addressing this problem for families, banks, and retailers like Carefull, Yofi.ai, and Myfloc.
Learn more about the companies in our portfolio on our website. If you’re a founder innovating in fintech, commerce, or care, pitch us here!
