Care Economy Sized at $648 Billion and Poised to Grow Rapidly

SAN FRANCISCO, July 14, 2021 /PRNewswire/ -- Today, The Holding Co. — in partnership with Pivotal Ventures — released The Investor's Guide to the Care Economy: Four Dynamic Areas of Growth, a first-of-its-kind report that puts the size of the care economy at $648 billion, making it $138 billion larger than the US pharmaceutical industry¹ and larger than the US hotel, car manufacturing, and social networking industries combined. Even more, the report finds significant growth opportunities in the four key areas it explored: household management, child care, aging-in-place and employer benefits.

The report, compiled between December 2020 and June 2021, is designed to immerse investors, entrepreneurs and businesses in the world of care and help them evaluate, understand and, ultimately, enter the care economy. It was supported with research and analysis from McKinsey & Company, consisting of both primary and secondary methods, including two original surveys, six government data sources, 34 expert interviews and more than 25 market reports. The work was supported by IDEO, Springbank Collective and Magnify Ventures, and brought together more than 30 other stakeholders shaping the future of care through its advisory committee.

Given the wide-reaching nature of care and robust demand for these services across sectors, the opportunities for growth and innovation in the care economy are vast. This is, in part, reflective of the pandemic's vivid illumination of caregiving challenges and their wide-reaching impacts. That's why, with the release of this report, The Holding Co. and Pivotal Ventures are calling on investors, entrepreneurs and corporations to invest in care.

"The care economy offers investors, entrepreneurs and businesses a treasure trove of untapped opportunities for innovation," said Patrice Martin, Cofounder and CEO, The Holding Co. "Coming out of the pandemic, American families are fed up and demanding the kinds of products and services that will allow them to thrive like never before."

While the care economy encompasses a breadth of industries and services, the report identified four key market drivers, including household management, child care, aging-in-place and employer benefits. These segments are not only driving expansion of the care economy but catalyzing a revolution in how our society cares for people from their first breath to their last.

Americans Are Eager to Buy Back Time Spent on Household Management
An original, national multi-person household survey conducted by McKinsey & Company in April 2021 found that American families across income levels are willing and ready to spend on help with care-related activities and chores at home. More specifically, 85% of people said they would be willing to pay each week to save time on household management tasks, with the median household being willing to spend up to $50 a week on time-saving products and services like house cleaning. As Americans place an increasingly high value on their time, household management presents a $217 billion opportunity for growth in the care economy.

Widespread Challenges in Child Care Prime the Market for Reinvention
Child care is a $136 billion market with expansive room for growth, especially as government spending — which accounts for $36 billion of total market spend — provides fuel for private sector innovation. Increased government funding, leveraged with the right technology, can help spur the increase of child care solutions on multiple fronts — from helping families find care quickly and efficiently, to helping providers expand their operations. This perfect storm of factors also makes the market ripe for new entrants.

Aging Emerges as One of the Most Exciting and Dynamic Markets in the Care Economy
The aging-in-place market totals $151 billion, and as of 2019, was expected to grow at a compound annual growth rate of 13%, with meals, home and personal care being the largest segments. The report identified two key drivers: 1) insurers who are enabling independence for aging adults and 2) emerging solutions that facilitate shared decision making between aging adults and their children, such as care coordination apps or safety monitoring tech.

Forty-two Percent of Employers Say They Plan to Expand or Add Care-Related Employee Benefits
The care-related employee benefits market is approximately $1.3 billion at present and has the potential to grow significantly as businesses spend more on care-related benefits.

"An increasing proportion of employers are now seeing that offering caregiving benefits is an essential tool for attracting, engaging and retaining a diverse and competitive workforce" said Courtney Leimkuhler, Partner, Springbank Collective. "In fact, only 25% of employers surveyed said that they felt their current caregiving offering was sufficient, and 42% are planning to expand or add care benefits, like those of UrbanSitter, a leading childcare startup which saw 400% growth in its corporate benefits channel from 2019 to 2020."

"This report makes clear: Care is not only a large and rapidly growing industry, but a dynamic and investable market," said Renee Wittemyer, Director, Program Strategy and Investment, Pivotal Ventures. "Given care's importance to the economy and to families, this is the moment for investors and entrepreneurs to step up, help solve care challenges, and seize the incredible market opportunities."

You can read and download The Investor's Guide to the Care Economy here. From there, share with your network, explore the site's additional resources and begin investing in the care economy.

About The Holding Co.
The Holding Co. is a creative lab that partners with innovators to build solutions to care — caring for kids, caring for the aging, caring for households and more. They are a team of seasoned designers singularly obsessed with creating the products, brands, services and experience that families are craving. They've worked in partnership with a variety of organizations to reimagine care — from venture-backed startups, to grassroots and national nonprofits to Fortune 500 companies. Their team has expertise in visual, product, UX and business design to help partners create more time, space and, ultimately, joy, for families. 

About Pivotal Ventures
Pivotal Ventures is an investment and incubation company created by Melinda French Gates in 2015 to advance social progress in the United States – which means equality and opportunity for more people in this country. Through their investments, partnerships and advocacy, they have invested in over 150 non-profit and private sector organizations — helping accelerate momentum where progress has stalled.

When it comes to care, Pivotal Ventures is focused on breaking down the barriers to advancing women's power and influence in the U.S. and child care and long-term caregiving duties have continued to hit women the hardest. They support market and policy innovation that can help build a modern care system – which is essential to women's advancement and the health and well-being of people in the U.S.

About Springbank Collective
Springbank Collective invests in early-stage companies building the New Care Economy and the Future of Inclusive work to empower all working women and working families. Among their investments are Wellthy, Plume and Catch.

About IDEO
IDEO is an award-winning global design and innovation company. They create positive impact through design by taking a human-centered approach to helping organizations in the public and private sectors innovate, grow and bring to market new ideas.

About Magnify Ventures
Magnify Ventures is an early-stage venture capital fund investing in founders with bold ideas to transform how modern families live, work and care.

¹ Based on revenue measured

MEDIA CONTACT: Lauren Wetzsteon Tufo
Lauren.Tufo@edelman.com
+1 202 855 0989

SOURCE The Holding Co.