Honor Technology, which provides tech-based management services to home care agencies, has acquired home care provider Home Instead. Home Instead, the world’s largest network and international franchiser of home care services, has 1,200 offices in 14 countries with 100,000 caregivers (and largest in the UK with 13,000). Home Instead will retain its name and operate as a subsidiary of Honor. No financial or management terms were disclosed, but the valuation of the company will top $2.1 billion (£1.5bn).
It’s a bit like the guppy swallowing the whale. Honor is only six years old, compared to 25-year-old Home Instead. Honor, which started out as a West Coast-based on-demand care company, now provides an operational platform to generally smaller home care agencies for services such as billing, scheduling, staffing, and other back-office functions for a negotiated share of its agency partners’ revenue. The guppy has to date a modest $255 million in financial backing, including last October’s $140 million Series D, from firms such as T. Rowe Price, Baillie Gifford, and Andreessen Horowitz. Supposedly the deal was inked in months, starting with a speculative phone call between Honor CEO Seth Sternberg and Home Instead CEO Jeff Huber.
Home Instead definitely saw value in Honor’s analytics, which profiles caregivers’ motivations to find the best fit for what shifts and duty suits them best. Recruitment and retention of caregivers is a major worldwide problem. According to LaingBuisson’s article on the acquisition, the UK alone has a shortage of 4,500 caregivers. This also converges into staffing health systems’ moves into hospital-at-home care. Martin Jones, Home Instead’s UK chief executive noted that ‘The hospital of the future is the home. And our future will be fuelled by a vibrant, respected workforce delivering care with skill and compassion.”
“To drive innovation, Honor will substantially increase its investment in research and development through engineering and technology. Honor and Home Instead also plan to extend their advocacy and social purpose initiatives. The combination will empower professional caregivers and enable millions more older adults across the globe to receive the support they need now and in the future.”
It’s a huge deal in the sleepy home care business, and it vaults Honor into a position to shake up the home care business even further. Honor release, Honor blog, HomeHealthCareNews, McKnight’s Senior Living Hat tip to reader Adrian Scaife. Laurie Orlov in her Aging and Health Technology Watch also has an interesting take on the acquisition being exactly right.