Care Sourcer has closed a £8.5m funding round – the largest ever Series A funding round to be received by a digital tech company in Scotland.
The care comparison and matching site raised the funds from two investors, Legal & General and ADV.
The money will be used to roll the company out nationwide throughout the year, as it currently only operates in London, Edinburgh and Gloucester.
The funding will also be used to develop the technology and expand its team of care experts and technologists.
Care Sourcer was founded in Edinburgh in 2016 by Andrew McGinley, CEO and Andrew Parfery, CCO. Anyone, including private individuals, GPs and social workers, can request care for older people on the website and will receive offers from local care providers within 48 hours.
The service costs the care provider a small fee and there is no charge to the person making the request.
Co-founder McGinley explained the purpose of the company: “Right now, too many people are waiting weeks or even months for care – this causes incredible stress for people and their families, and it’s also a huge expense to our health system. People deserve better than this broken status quo and we know that our technology can help.
Legal & General Retirement Retail were the lead investors of the funding round, investing £6m. ADV, who had previously invested during Care Sourcer’s seed round, followed on with a £2.5m investment.
“We’ve had incredible feedback from people who have already found care through Care Sourcer and with backing from Legal & General and ADV, we’re kicking off our next stage of growth and UK-wide expansion. Our talented team is incredibly motivated to make sure that nobody in the UK has to wait for care when they need it,” McGinley added.
With this investment, Care Sourcer aims to directly tackle the NHS’s ‘bed-blocking’ crisis. NHS England alone reported over 150,000 Delayed Transfer of Care days in 2017-18, which is the number of days that someone who is medically fit for discharge is still occupying a bed. These delays cost NHS England £3bn annually, or £8m per day, and also force the NHS to cancel operations and increase waiting times in A&E.
Care Sourcer claims that its care matching tech can address nearly half (47%) of these delayed discharge cases.
Chris Knight, CEO of Legal & General Retirement Retail, said: “Our investment in Care Sourcer will not only directly improve the lives of many of our customers – both recipients of care, and family and other carers trying to find a care solution for loved ones – but it also contributes to our long term purpose of building a better society.
“By addressing Delayed Transfer of Care, a key issue in the UK’s care provision and a huge cost to the NHS England budget, not only have Care Sourcer devised a strong business concept but it is an innovative solution that brings choice and transparency to the UK care market. We are looking forward to working more with the Care Sourcer team who share our commitment to resolving issues in UK care provision,” he added.
Care Sourcer completed its first external seed investment round in 2017, raising £500,000 from UK venture capital firms Accelerated Digital Ventures and BGF Ventures. It was the first investment in a Scottish company by both investors. Also that year, the company bagged a nationwide Small Business Research Initiative contract worth £100,000 to tackle delayed discharge with NHS England. After a successful trial, NHS England awarded a further £757,000 to Care Sourcer to expand their work with NHS bodies across the country.
Mike Dimelow, CIO at ADV, also commented: “This is an excellent example of the right team, timing and opportunity coming together in a startup. With a fantastic mix of brains targeting an area which is a huge pain point globally, Care Sourcer has big potential to be generation-defining.
“Taking on investment from one of the UK’s largest financial institutions brings into sharp focus the importance of thinking about life post retirement for older adults. We’re excited to see Care Sourcer’s growth accelerate,” he concluded.