The U.K. care home sector was pegged as £7.7 billion market in 2021, according to most recent estimates, yet capacity is shrinking at a time when the average age of the general population continues to grow.
Throw into the mix a lack of transparency over pricing and service availability, and it’s clear that families looking for the the most suitable care home for their elderly loved ones face mounting challenges. This is something that Lottie is setting out address, with an online marketplace that helps those seeking care find the best care homes and services for their needs, while also catering to additional categories such as home-care.
Founded out of London in 2021 by brothers Will and Chris Donnelly, Lottie claims some 500,000 monthly users, which it says represents 300 percent growth over the past 12 months. Following on from a $7 million funding round last year, the company today announced it has raised $21 million (£16.35 million) in a Series A round of funding led by U.S. VC giant Accel, with participation from existing backer General Catalyst.
Found lacking
The social care sector has not been hugely disrupted by the digital revolution these past few decades, with families typically having to liaise directly with local care services, or use directories and websites such as Care UK or Carehome.co.uk which don’t always have all the information that a care-seeker might need, such as pricing and real-time availability.
Last year, Lottie acquired a care home software company called Found, which many care homes already used to manage the occupancy and CRM side of their business. Off the back of this, Lottie is now offering real-time service availability, only displaying listings that have actual capacity — which is a major time-saving for situations where families need to find a care home quickly.
“Prior to Lottie, and based on our research, families would find themselves contacting an average of six services before reaching a service that had availability and could meet their care requirements,” Lottie co-founder and co-CEO Will Donnelly explained to TechCrunch. “By contrast, Lottie allows families to instantly connect with services accepting new clients today, and therefore supercharges the search process.”
Lottie listing Image Credit: Lottie
With Found integrated into its marketplace, Lottie can offer care providers a holistic platform for managing enquiries, customer relationships, occupancy, financials, and more. This also means that in the future, Lottie will manage payments, so that families can pay directly through the platform similar to other booking marketplaces.
“In addition to this, Found will allow Lottie to digitise the viewing, health assessment and referencing stages of the booking process, all of which remain offline today and are currently undertaken via manual means,” Donnelly said.
Lottie / Found: Dashboard Image Credit: Lottie
In terms of business model, Lottie monetizes via several streams. Through its core marketplace, care providers are currently charged for lead generations and billed on a pay-per-query basis.
“This charge model supports Lottie in giving care seekers access to care services with immediate vacancies, as providers will turn off their listings once they’re service is at full capacity, and they no longer wish to pay for additional new enquiries,” Donnelly said.
But with Lottie shifting to a marketplace model via its Found integration, it will soon take a percentage fee from the duration of each residency booked through the Lottie platform. And as a SaaS company, Lottie will also be charging care providers for using its software, with a subscription model in place starting at £150 per month.
Expansion
While Lottie is entirely focused on the UK care home market for now, the fact that it has secured two major U.S. VC firms as backers, who between them have invested in the likes of Spotify, Slack, Atlassian, AirBnb, and Snap, is somewhat telling of its global aspirations. However, Donnelly said that he doesn’t envision the company looking to international markets until 2025.
“International expansion is on our radar, and it was a key reason for why we have strategically aligned ourselves with two global venture capital funds,” Donnelly said. “The U.S. market will offer Lottie’s first route to international expansion due to the similar market characteristics.”
With another $21 million in the bank, taking its total funding to $31 million to date, the company said that it plans to double its headcount to more than 100 by the end of next year as it builds out its tech.
“While we will grow all departments, Lottie’s main hiring focus is on expanding our product and engineering teams,” Donnelly said. “With the additional funding, Lottie plans to build out Found to be a comprehensive home operating system and modular solution, meaning providers no longer need to use multiple software’s to manage their operations and instead can just use one single system — that being Found.”