London startup builds end-to-end marketplace for care home industry
In 2021, recent estimates valued the U.K. care home sector at £7.7 billion. However, this sector is experiencing a reduction in capacity, even as the average age of the population continues to rise. Additionally, there is a lack of transparency regarding pricing and service availability, making it increasingly challenging for families to find the most suitable care home for their elderly loved ones. Addressing these issues is the mission of Lottie, an online marketplace founded in London in 2021 by brothers Will and Chris Donnelly. Lottie not only helps individuals seeking care find the best care homes and services for their needs but also offers support for categories like home care.
Lottie has experienced significant growth, boasting approximately 500,000 monthly users, representing a 300 percent increase over the past year. After a successful $7 million funding round in the previous year, the company has now secured $21 million (£16.35 million) in a Series A funding round led by the prominent U.S. venture capital firm Accel, with participation from existing investor General Catalyst.
The social care sector has been relatively untouched by the digital revolution of recent decades, leaving families to navigate local care services or rely on directories and websites like Care UK or Carehome.co.uk, which often lack comprehensive information such as pricing and real-time availability.
Lottie’s acquisition of Found, a care home software company, has allowed it to offer real-time service availability, displaying listings only when there is actual capacity. This feature is a significant time-saver for families in urgent need of a care home.
With Found integrated into its platform, Lottie provides care providers with a comprehensive solution for managing inquiries, customer relationships, occupancy, financials, and more. This integration also paves the way for Lottie to handle payments in the future, streamlining the booking process, similar to other online booking marketplaces.
Lottie’s business model includes multiple revenue streams. Currently, care providers are charged for lead generation and billed on a pay-per-query basis through its core marketplace. However, with the integration of Found, Lottie plans to earn a percentage fee from the duration of each residency booked through its platform. Additionally, Lottie operates as a SaaS company, charging care providers for using its software through a subscription model, starting at £150 per month.
While Lottie presently focuses exclusively on the UK care home market, its recent backing by two major U.S. VC firms with global portfolios hints at its international ambitions. However, the company does not anticipate expanding into international markets until 2025. The U.S. market is likely to be Lottie’s first target for international expansion due to its similar market characteristics.
With an additional $21 million in funding, bringing its total funding to $31 million, Lottie plans to double its workforce to over 100 employees by the end of the next year. The primary focus for hiring will be expanding its product and engineering teams. Lottie aims to develop Found into a comprehensive home operating system and modular solution, streamlining operations for care providers and consolidating multiple software systems into one.
