Silicon Valley is beginning to target a huge, largely untapped, and loaded market: baby boomers and older consumers, writes a recent Slate article.
Venture capitalist-backed startups are entering the $750 billion, boomer-dominated silver space after years of tunnel vision on younger demographics. With about 10,000 Americans turning 65 each day and the 85+ demographic rapidly increasing, the older generation is a force to contend with—and investors are taking notice.
“There’s gold in all that silver, and a new generation of startups is poised to mine it,” writes Slate. “They’re rethinking the tired presumption that seniors make tricky customers: that they’re harder to reach, that they’re stuck in their ways. They don’t have the exact same needs as millennials, but new technology can address those needs in new (and lucrative) ways.”
Funding for digital health companies exceeded $1.9 billion in 2013—up 39% from the previous year, and double the 2011 amount, according to RockHealth, a seed-stage accelerator for health-related startups.
“At least 186 health-related tech companies raised $2 million or more last year, with more and more of that money coming from early stage deals (seed or series A),” Slate says.
There are nearly 4,300 companies listed under investment hub AngelList’s healthcare category. AngelList, according to Slate, is a “bellwether for emerging trends in seed-stage startups,” and those healthcare companies have an average valuation of $4.2 million. That’s approximately 11% higher than the average $3.8 million across all of AngelList’s categories.
“Other boomer-friendly categories include nutrition ($4.6 million average), home and garden ($4 million average), personal health ($4.2 million average), and vacation rentals ($3.9 million average),” says the article. “The elder care category has a $4.5 million average valuation, which is 18 percent above the super-sexy games category, 15 percent above fashion, and 12.5 percent above consumer goods.”
Written by Alyssa Gerace