Care Angel

Early Stage

On a Global Mission to Empower Millions of People to Take Better Care

Analytics

Raised to Date: Raised: $303,713

Aggregate Commitments $

Platform

StartEngine

Start Date

11/20/2020

Close Date

07/15/2021

Min. Goal

$9,999

Max. Goal

$1,069,999

Min. Investment

$494

Security Type

Equity - Common

Funding Type

RegCF

Series

Series A

Price Per Share

$2.41

Pre-Money Valuation

$45,700,000

Rolling Commitments $

Status
Funded
Reporting Date

07/31/2021

Days Remaining
Funded
% of Min. Goal

3,037%

% of Max. Goal

28%

Likelihood of Max
Funded
Avg. Daily Raise

$1,281

Momentum
Funded
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Location

Miami, Florida

Industry

Healthcare & Pharmaceuticals

Tech Sector

HealthTech

Distribution Model

B2B/B2C

Margin

High

Capital Intensity

Low

Business Type

Growth

Care Angel, with a pre-money valuation of $45.66 million, is raising crowdfunding on StartEngine. The company has developed a software solution that works as a virtual nurse assistant. The platform helps manage the health management of the population at scale and aims to drive better medical results at lower costs. Wolf Shlagman founded Care Angel in December 2015. The proceeds of the current crowdfunding round, with a minimum goal of $9,999.09 and a maximum goal of $1,069,999.03, will be used to scale up the platform to reach and improve the lives of millions of people. Care Angel already works with several health plans, representing 600,000 members monthly. The solution has reported an engagement of 83% and a cost reduction of $41 per member per month.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$996,230

$78,144

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$-1,654,724

$-1,881,801

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$47,581

$435,956

Accounts Receivable

$484,971

$52,350

Total Assets

$786,269

$709,044

Short-Term Debt

$61,292

$36,831

Long-Term Debt

$165,931

$5,617,946

Total Liabilities

$227,223

$5,654,777

Financials as of: 11/20/2020
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

America is headed for a healthcare crisis, brought on by a graying population. Every day another 10,000 baby boomers hit retirement age. In ten years, all baby boomers will be 65 or older. At that point, approximately 75 million U.S. residents will be past retirement age — more than 20% of all Americans. With these massive numbers of older residents comes challenges on multiple fronts, but perhaps none so daunting as healthcare and caregiving.

Healthcare simply gets more expensive as people get older. Managing chronic illnesses, for instance, accounts for 86% of all healthcare costs, and three-quarters of Americans 65 and older live with chronic conditions. Furthermore, many boomers are not adequately prepared for retirement on a financial front. One in three boomers have no retirement account, and Social Security can only account for half or less of normal retirement expenses.

Caregiving is also a challenge. Owing to a lack of trained home health care workers, more than 1 in 6 working Americans report doing unpaid caregiving for elderly or disabled family members, which often results in worse mental health outcomes and neglected work performance. The COVID-19 pandemic has only worsened these challenges, and home health care workers without protective equipment put themselves and their patients at risk. 

Care Angel aims to employ technology to better manage home health care. This startup employs an artificial intelligence (AI), voice-powered system to keep in touch with vulnerable populations, detect current or imminent poor health outcomes, and notify the appropriate parties. The software checks in regularly with patients at home — asking them basic questions to gain baseline data — and flags warning signs for review by caregivers. Through employing this technology, caregivers can lower their own and their patients’ healthcare costs by a significant margin, and — as an added bonus — easily keep in touch with patients in a pandemic-divided world. Care Angel’s B2B/B2C solution is already at work representing 600,000 members every month.

Care Angel’s current StartEngine raise has been rated a Neutral Deal by the KingsCrowd investment team.

Price

Care Angel’s current Series A raise has a concerningly-high pre-money valuation of $45.7 million. Admittedly the company is taking in revenue and has received positive early feedback. Still, this is a very high valuation for a company still suffering large net losses and without any patient outcome data to report. Thus, Care Angel’s price score is its lowest across all five metrics.

Market

The U.S. health care market is absolutely massive, the most expensive per capita in the world. However, Care Angel’s solution only addresses a fraction of a fraction of that market: health care management for at-risk populations. That said, the virtual health care market overall is expected to balloon to $77.4 billion in the U.S. alone by 2026. The pandemic has driven some of this market growth, as health officials urge caregivers to rely on virtual caregiving options. Fortunately for Care Angel, boomers have also been taking the opportunity to become more familiar with technology during the pandemic as well.

Given that the healthcare industry is working to cut costs, and that a graying of the population means more and more of the population relying on unprofitable (for providers) Medicare, Care Angel’s money-saving program might be just what the doctor ordered. If the company can secure ever-increasing portions of the sizable telecare market and help caregivers drive costs down, Care Angel could carve out a slender but significant slice of that multi-billion dollar industry. Still, in order to appeal to providers, it must by necessity provide its service cheaply without sacrificing quality, which will require it to acquire as much as possible of an already-limited market. Care Angel will also face increasing competition in the telehealth market, further limiting its ability to capture market share. Due to these limiting factors, the market score for Care Angel is quite low.

Team

Founder and CEO Wolf Shlagman leads the Care Angel team — an experienced hand at telemedicine-based startups. Shlagman holds a Bachelor’s Degree in Finance, Business Administration, and Art History from the University of South Florida. More to the point, he founded a similar telemedicine company called Consult a Doctor in 2007 and successfully led the company to an acquisition by Teladoc in 2013. 

Care Angel’s CRO is Darren Hay. He is a former VP with Telus, a Canadian telecommunications company, and a former senior VP with ADT and Ideal Life, which partnered to provide remote healthcare to customers. Both these experiences are seemingly a perfect fit for his current role.

Kelly Gregorakis is Care Angel’s VP of Marketing. She brings to the team six years of leadership of the marketing team of Teladoc — the company that acquired CEO Shlagman’s Consult a Doctor in 2007. She has served in VP-level leadership roles since 2004 and seems well-credentialed for her role. Finally, Lena Nikolnikov is Care Angel’s VP of Product & Clinical Solutions. Nikolnikov served as the Director of Physician Operations for Shlagman’s Consult a Doctor, has many years of healthcare experience, and holds an MBA in Business Administration and Corporate Innovations from Post University School of Business.

All in all, this is a team with a strong level of relevant industry and entrepreneurial experience. Care Angel’s team score is accordingly high as a result.

Differentiators

With so many recent advances in artificial intelligence, you might assume that Care Angel is far from the only company to provide AI-based telehealth services — and you’d be right. Providers are aware of the massive advantages AI can provide to caregiving and are making investments. Many of these investments seem centered around employing AI for data analysis rather than information-gathering, but it’s not a difficult leap. As of now, Care Angel’s patent is pending, offering it a potential leg up if it can secure the required patent before healthcare companies simply come up with their own offerings. As of yet, the program has been better-received than anything else in the same niche market. However, there is little preventing a more mature and better funded healthcare provider from offering services very similar to Care Angel’s — especially as healthcare’s adoption of AI continues to increase. Therefore, Care Angel’s differentiators score is just below average.

Performance

Now in its sixth year of operation, Care Angel has been making steady progress towards profitability. Since winning the AARP Foundation’s Aging in Place $50K Challenge in early 2016, the company has begun to take in revenue. And that revenue is increasing year over year — $996,230 in 2019 from $78,144 in 2018. While this is a massive step up in revenue, Care Angel holds significant short-term and long-term debt. Additionally, the company faced net income of -$1.65 million (an improvement over -$1.88 million last year).

While the company still has a long way to go, its early results from its current members are promising. Early results indicate a tenfold increase in clinical efficiency, and $41 saved per member per month. Due to its growing revenue and encouraging early traction, Care Angel’s performance score is strong.

Bearish Outlook

While there is undoubtedly a growing market for telemedicine — especially for vulnerable elder patients — Care Angel has yet to secure a path to market dominance or success. While providing its service cheaply enough to provide cost savings, the company burns through large amounts of cash to develop software and pay its expansive team. Should the company’s patent application fail, other providers could easily step up with their own AI-based telephonic systems to fill the need. Without any strong differentiators or scientifically proven improvements in patient care, Care Angel needs defensibility and positive reporting on its software to expand its customer base. From a purely investing standpoint, the company’s high valuation also limits early investors’ upside potential — especially concerning given the uncertainty of Care Angel’s success.

Bullish Outlook

Where the market sees a need, it fills it, and there is a need for cost-cutting in healthcare. Providers are losing money year after year on Medicare patients, and patients are fearing they won’t be able to age at home with floundering savings and overdependence on relatives.

Care Angel can fill this need, and its system has already proven aptly scaleable. Assuming the system is shown to lead to better medical outcomes for patients, providers will be incentivised to engage the service both for financial and moral reasons. That would be a powerful argument for an industry suffering from bad PR about exploitative practices. Continued positive results and a secured patent might lead to a position of leadership in the market, or even possible acquisition — its CEO has led a previous startup to such a deal before, so such an eventuality is possible.

Executive Summary

Care Angel is providing an AI, voice-enhanced telehealth service that regularly checks in on at-risk older patients. The system enables providers to easily monitor patients for health risks and keeps family members informed on their loved ones’ health. The service has received positive feedback, and the company is gaining more revenue year-over-year. 

There are significant challenges to Care Angel becoming a dominant market force though. The company is keeping its service price low in order to provide cost-savings to patients and providers. However, this limits the company’s ability to reach profitability. Also, potential competitors or providers employing their own AI programs could cut the startup’s knees out from under it. Lastly, the effectiveness of the system has not been fully proven — if no significant benefit can be seen from Care Angel’s usage, then adoption rates will certainly fall. Therefore, Care Angel is a Neutral Deal.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Benjamin Potts.

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Care Angel on StartEngine
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Platform: StartEngine
Security Type: Equity - Common
Valuation: $45,700,000

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