With an increasing focus on career over family in our 20s and 30s, adults are starting families later and later in life. This is leading to an increase in households that have two working parents that are also taking care of their elderly parents at the same time.

Being a full time parent, caregiver and employee is more than most can manage effectively. What is needed is a series of support services that can help these busy individuals manage their personal and career obligations.

Employers on the other hand are increasingly looking for solutions to attract and retain the best talent. And once they attract the talent they want to ensure they get the most out of their employee base.

What is needed is an employee benefits platform that effectively helps to manage child and elder care as well as other basic needs such as home cleaning, and ride pickups.

Oneva, which is founded by the 11th female black founders to ever raise more than $1M in capital for a startup, Anita Gardyne is creating a safer, easier to use, higher quality care.com built for the modern workplace.

Current options that exist for managing child care or home elder care, etc. typically come from disparate B2C marketplaces like care.com, which are heavily tailored to the gig economy. Unfortunately, these marketplaces are not necessarily built to the level of quality you would want when trying to find help to manage your closest loved ones safety and well being.

Oneva, provides (1) in depth FBI and DOJ background clearance on all care providers at no cost to the customer, (2) insurance protection for all parties, (3) an Oneva concierge that manages all scheduling and cancellations, (4) fair living wages for all caregivers (which employers can help subsidize to make affordable for employees), and (5) flexible payment options through stipends, grants, awards, payroll deduction and FSA reimbursement.

Put simply, Oneva removes the frictions of current solutions through its tech-enabled platform while increasing the quality of child and elder care. I should note that the current Oneva solution also offers access to house cleaning service, pet care, and massages, which they found to be of value to users during the pilot.

These seem like viable expansion categories that fit in with the wellness angle of the business, however for analysis of the business opportunity we think it is best to focus on the core pillars of child and elder care. Ultimately, dog care and house cleaning won’t be what sells corporations on the Oneva value proposition, rather they are nice to haves.

The team has built Oneva to be a B2B focused platform that is offered as an HR benefit. This is a  more efficient way to scale with low customer acquisition cost (CAC) and enhanced customer engagement and loyalty.

In fact, the team has spent the past couple of years working hand-in-hand with Microsoft to develop the platform and pilot it. They are now moving into later stage discussions to launch it at a larger scale to a broader portion of the Microsoft workforce.

Think about being able to schedule and manage all of your child care and elder care needs through your workplace portal, and know that you will get a high quality level of service without all of the back and forth typically involved with a care.com website.

We are living in an age where healthcare and 401K plans are not enough to remain competitive as an organization in acquiring and retaining talent. In recent years we have seen a plethora of new HR benefits arise (e.g., student loan contributions, Uber credits, free food, gym memberships) that companies are trying to use to differentiate.

Having a platform that simplifies and subsidizes one of the biggest pain points for a large swath of the working population is a very attractive option. That is likely why 25 Fortune 100 companies have already approached Oneva about potentially working together moving forward.

There are three key trends driving demand for Oneva’s service offering that provides easy access to home healthcare providers and childcare services. 

1. Growth of the 65+ age demographic

The 65+ age population is experiencing outsized growth over the next 10 to 30 years, expanding from 48M today to 88M by 2050. To support this growing population of elders, it is estimated by the U.S. Bureau of Labor Statistics that growth of home healthcare jobs will outpace any other healthcare profession growing 41% to 4 million jobs by 2026.  

2. More families have 2 working parents

We continue to see a significant shift in the number of mother’s staying in their careers after having children. In 2015, it was estimated by the Women’s Bureau of the U.S. Department of Labor, that 69.9% of mothers with children under 18 were working, compared to 47.4% in the 1970s. 

With this dynamic shift in the workforce, 61.9% of all families as of 2016 were two person income households. This means there will continue to be a greater demand for childcare services, which is why the number of jobs in the childcare space is estimated to grow 7% through 2026.

3. Employers are trying to offer more HR benefits to attract and retain top talent

In 2016, the Society for Human Resource Management conducted a survey, which identified wellness benefits as a category of growing importance to employees. Additionally, 20% of HR professionals indicated that they had altered their benefits program to attract or retain talent in that year.

Needless to say, organizations are moving quickly to implement more attractive HR benefit programs that meet the growing list of demands and needs that employees have. Oneva will have the ear of major organizations who are looking to stay relevant.

1. Successful pilots: Throughout 2017, Oneva ran a test pilot with employees at Microsoft and had very positive results. They provided over 1,800 hours of care, and 40% of customers requested 3+ services (meaning they ordered more than just child and elder care).

2. Product market fit: When tested with Microsoft the results were strong. There are no good solutions specifically in this space being offered as a package deal within organizations. It really is a natural extension of wellness benefits and a major burden for many employees. Simplifying the process, reducing cost, and time are all major benefits to improve productivity of employees.

3. Promising financials: Margins on the Microsoft pilot were around 30% on the upmark fee Oneva charges on the hourly rate. They also plan to charge setup fees, report and services fees, etc. to the corporations to utilize Oneva.

4. Riding several market tailwinds: As I highlighted above, Oneva is benefitting from a growing elderly population that will need care, a growing number of families that have two working parents and require child care, and a general movement by corporations to meet the needs of their employees with wellness solutions.

5. Capital efficient management team: The team has been building and constructing the organization since 2013 and has raise d $1.5M to date. The fact that they have been able to build a fully compliant HR solution for a Fortune 30 company while remaining as lean as they have is a testament to being capital efficient and focused. With some additional capital, I think this team can do quite well, and maintain good control to prevent excess capital raising and dilution to current shareholders.

Anita Gardyne, the Co-Founder and CEO has been impressive in knocking down barriers and walls to accomplishing what they already have to date. As only the 11th black female to raise more than $1M, she has proven that she is a formidable business women who won’t be stopped by old school ways. She also comes with deep experience in FP&A planning with organizations like Quantum Corp. and Pacific Bell (now AT&T). I think this explains how they have managed to be as savvy and cost controlled as they have been despite being a startup.

Bob Gardyne, Co-Founder & CTO, as well as the husband of Anita has been a VP of Engineering at major organizations such as Jupiter Systems, RGB Spectrum as well as the Director of Hardware Engineering at several corporations throughout the 90s and 2000s. With over 30 years experience in technology, he comes with the knowledge and know how that you need if you are going to be selling to multi-billion dollar corporations.

The team has executed well in bringing in advisors and support cast to support their needs as a company. Most importantly, they have worked in concert with Fred Thiele, the GM of Benefits at Microsoft to build the product to meet the needs of a Fortune 30 company.

They have also worked with the Reverend Jackson to set their course towards pursuing enterprise clients. These are the kinds of individuals that can help support the vision of the company and provide the needed connections to get the company to the next level.

Some concerns that come to mind when evaluating this deal are the fact that the team estimates the sales cycle for their product amongst many of the Fortune 100 they are talking to is around 2 years long.

This puts a strain on how much capital and resources they will need to really gain market traction. I do think this team has proven they know how to operate efficiently, but long corporate sales cycles are not desirable. If the team can find a way to also diversify into SMB organizations, I think it would be beneficial to the near-term prospects of the business.

The other concern will be adoption rate. Though this makes it frictionless to manage child care and elder care, if there are people already utilizing other services driving a change in behavior towards a corporate solution could be hard.

It seems as though test pilots showed users were willing to use or at least try the solution, but it will be good to see this at a larger scale.

The Recommendation

The team is well experienced and versed in building and working with large organization. Additionally, the team is building a deep moat by working hand-in-hand with Microsoft to develop the platform in a way that meets the specific needs of some of the largest public organizations in the world.

If it took Microsoft two years to really get comfortable with the product in its current state, it would take any new competitor a good deal of time to try and win over a corporate client with a solution that hasn’t been tailored to their needs.

They are also building a product that is sitting at the center of so many tailwinds that the team is going to find a demand in the marketplace and the fact that conversations are getting started with other major corporations is a signal of what is to come.

However, the long sales cycles and true B2C competition out there are things you need to consider as you evaluate this deal. For these reasons we think this is a DEAL TO WATCH and has strong potential to be a terrific investment.