Photography source: Julia Vivcharyk on Unsplash
This article is an attempt to provide structure to the existing solutions, and outline which are the most innovative in addressing challenges related to the elderly population. Our analysis focuses on Europe, although the mapping also includes other geographies for a more comprehensive industry snapshot.
We define age tech as the broad spectrum of solutions that employ cutting-edge technology to enhance the lives of older adults, addressing their unique challenges and needs. This sector presents a tremendous opportunity for both financial returns and significant social impact.
To put it into perspective, the 'Silver Economy' in Europe alone is projected to reach a whopping €5.3 trillion by 2025, dwarfing many other markets in terms of Total Addressable Market size. Notably, prominent European VC funds such as Index Ventures and Atomico, and accelerators such as Next Age or Birdhouse Age Tech have also identified this promising opportunity, further validating the industry's potential.
A quote commonly attributed to Mark Twain reads, "Age is an issue of mind over matter. If you don't mind, it doesn't matter." Even if, on a personal level, this might be true (and a great perspective!), our rapidly advancing digital age and socio-demographic trends shed light on the pressing needs of our ageing population. By 2050, around 2 billion people globally will be over 60. Out of those, nearly 20% may experience social isolation, a problem accompanied by various health risks. (WHO) Healthcare already represents an important cost for European countries. As of 2019, healthcare expenditures as a share of GDP in many European countries exceeded 10 percent. Out of those, around 10% is allocated to long-term residential care. (Statista)
Many European countries, including Germany, Italy, and France, heavily rely on informal care for the elderly. This is encouraged by governments to reduce healthcare expenditure, and economic factors such as high costs of care homes also play a role (Statista). However, with the expected growth of the elderly population and the decline of multi-generational households, relying solely on informal care may not be a sustainable strategy in the long run. Specialist nursing and residential care settings may be necessary for specific health conditions associated with ageing. Innovations in Age Tech are then proven essential in this scenario, offering solutions to enhance the lives of our older adults.
This substantial impact and market potential set the stage for us to dissect the Age Tech industry further, proposing a categorisation of the various segments. We outlined four key categories of age tech innovation according to the current start-up landscape: