What would you pay to cure loneliness? Our $10M Series A investment in Papa
Today Papa, a company providing companionship and mobility services to older Americans (think grandkids on demand!), announced a new round of financing, led by Canaan. I am joining the board and am deeply passionate about the company’s mission and approach. It’s a rare opportunity to partner with a team on building a valuable, technology-enabled company with the potential to massively impact our social, financial and healthcare systems.
Healthcare — Papa’s focus — is a sector resistant to change. And yet, our healthcare system is massively broken. Many solutions exist that are small steps in the right direction, but that’s not Papa’s approach. Instead, they are using technology to create an entirely new class of caregiver. For older people, it’s companionship and support when they may be struggling with social isolation, loneliness or the general strains of aging gracefully. For a workforce that’s increasingly seeking more flexible and reliable opportunities for growth (our “Papa Pals”), it’s meaningful work that pays significantly better than other gig economy jobs and minimum wage. And for health plans, it’s a service that guides members towards healthier lifestyles, which have long-term impacts on health outcomes and costs. This approach is a big swing at a complex problem, but we’ve passed the point where incremental solutions can move the needle.
Much has been written about the challenges of the $3.3TR U.S. healthcare system, but only in the last few years has the topic of aging, effects of loneliness and how we care for older adults become more prominent, as acute Medicare costs are expected to approach $260BN by 2030. As the baby boomer generation slowly ages out of the workforce, their children (mostly millennials and Generation X) are becoming intimately familiar with the financial, medical and operational challenges required to support their parents through aging. There is a structural deficiency in how we care and shelter them: with a growing shortage of home health aids and with 43% of baby boomers anticipating aging in their primary home, there is an unprecedented need to build products and services to support this radical transition of people living longer in their homes. Less spoken about is the crisis of loneliness and social isolation facing the 50M baby boomers, and the long-term health implications if that loneliness is left untreated. It’s estimated that the lack of social connections is considered as damaging as smoking 15 cigarettes a day, and we have yet to see the compounding effects of this on one of the largest generations ever.
When I met Andrew, Founder and CEO of Papa, he had a simple and profound mission — to reduce loneliness and social isolation among the world’s older adults and to ultimately restructure American culture to support aging in a manner that would make us proud. Papa is a marketplace that connects a new class of vetted caregivers called Papa Pals, with older adults to unlock greater autonomy through mobility, companionship and daily living services. The company’s product is offered as a benefit through health plans and employer sponsored programs, along with being available directly to consumers and their families. This is not a product to support senior citizens — it’s a form of empowerment for a class of people that have slowly been left at the margins of society. By spending time with Andrew and the incredible team, this subtle but critical distinction is clear.
One of the pioneering benefits of the internet and smartphone ubiquity is the ability to more effectively match human capital, goods and assets to solve what was once the improbable. Paired with this concept, technology has caused tectonic shifts in our daily lives and led to the creation of valuable companies, ranging from retail (Amazon) to relationships (Match.com) and transportation (Uber). And we continue to believe that reinventing the offline world is a valuable evolution of the internet economy. Still today, the majority of the nearly $10TN spent on consumer services lacks any digitalization or internet enablement.
Here’s how Papa works: the service matches older adults with Papa Pal’s — usually college students, stay at home moms and young professionals — all looking to earn incremental income while supporting their local community. Papa Pals go through rigorous background and psychographic checks to ensure the highest quality service and empathy, allowing them to provide members with a range of services — from trips to doctor’s appointments and the grocery store, to simply going on walks and being an exceptional conversation partner. With the majority of visits on a recurring basis, members build a trusted and familiar relationship with the same set of Papa Pals. Families benefit by having an extra hand nearby (an important benefit given the growing geographic distance between generations). Similarly, health plans are empowered with an affordable and scalable solution to build a deep relationship with their members. In their feedback, these plans have told us again and again how Papa Pals have driven improvements in long-term health outcomes and costs.
We are happy to announce our partnership with Andrew and his team on Papa’s Series A financing, alongside Initialized Capital, Melinda Gate’s Pivotal Ventures, Y-Combinator and Sound Ventures. We are excited to support them on this journey of reducing loneliness and social isolation, and entering a world where a community’s economic and social systems are more attuned to the needs of an aging society.
