Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
ThinkAdvisor

Technology > Marketing Technology

AARP starts $40 million venture fund for technology for seniors

X
Your article was successfully shared with the contacts you provided.

(Bloomberg) — AARP, the 37 million-member organization for people 50 and older, is establishing a $40 million venture capital fund to boost innovation and technology that will serve its constituents.

The fund, administered by a unit of JPMorgan Chase & Co., will invest in enabling aging at home, improving access to health care and expanding the market for preventive health services, said Jo Ann Jenkins, AARP’s chief executive officer.

See also: 3 ways to help elder home tech help us

People 50 and older are responsible for some $7.1 trillion a year in spending and are increasingly online and ready to make use of technology in various aspects of their lives, according to nonprofit AARP. Still, designers and software developers frequently fail to target the older population with their offerings, Jenkins said.

“I don’t think we see enough investments in innovations that are focused on the 50-plus,” she said. “We’re the first fund that’s devoted to solutions around the 50-plus.”

New products

J.P. Morgan Asset Management will do due diligence on potential investments and won’t be contributing money to the fund, Jenkins said. AARP’s first concern will be on helping new products get to market, rather than turning the biggest possible profit on an investment, she said.

“There may or may not be returns, but this is key to serving our members who are looking for dependable solutions,” she said. “Aging is different than it was 10 or 20 years ago, and we need to get the private sector involved.”

The aging of the U.S. population, along with an increasing emphasis on aging at home — instead of in assisted living or a nursing home — is fueling investment in technologies such as telemedicine, which allows patients to communicate remotely with health care providers. According to a 2014 study by IHS Inc., the global telehealth market will increase to $4.5 billion by 2018 from about $440 million in 2013.

See also: Google Glass comes to doctor’s office near you as upgrade looms

“The aging population is one of health care’s tectonic shifts, driving government changes and policy changes,” said Zen Chu, faculty director of the Healthcare Ventures course at the Massachusetts Institute of Technology. The course teaches health care entrepreneurship.

PPACA’s role

The Patient Protection and Affordable Care Act (PPACA), often called Obamacare, has encouraged health care companies to experiment with home-based and preventive services, said Bill Fera, health care analytics leader for consulting firm EY. Medicare has been increasingly paying for telehealth services, he said.

MedZed, a closely held company based in Atlanta, said Wednesday it raised $3.2 million for its service that allows doctors to see homebound patients online with the help of a medical technologist who comes to the home. The money will be used to help refine the technology and expand into other markets, said Scott Schnell, MedZed co-founder and CEO.

“We’re not looking to sell the next widget,” he said. “We want to use the widget effectively to help providers and payers cut costs.”

Still, Fera said, companies are searching for a transformative technology for older people.

“I think people have been nibbling around the edges of it,” he said. “If there is a killer app in this space it hasn’t been invented yet.”

See also: Robot millionaire takes a shot at fixing severed spines


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.