"The market opportunity here is huge and growing," said Jody Holtzman, senior vice president of market innovation at AARP. Many entrepreneurs and VCs have underestimated this space for a long time now, not realizing that the boomer generation needs and wants technology, too, he added.
"The top shelf of Sand Hill Road is really interested now," said Holtzman, referring to the road where some of Silicon Valley's top venture capitalists have offices.
"In the beginning, we would go to annual VC events, and the initial reaction to us being there was, 'What the heck are you doing here?' People didn't get it. … But once we started sharing data, it was like, 'Wow you have to be [an] idiot to turn your back on this growth market.'"
Lynne O'Keefe, a senior partner at Kleiner Perkins Caufield & Byers who focuses on digital health, agrees. O'Keefe says the market potential of baby boomers is especially powerful because many boomers are part of the "sandwich" generation — not just taking care of their own needs, but those of their parents and children. Boomers are a primary focus of health tech companies, adding that nearly one-third of KPCB's digital health portfolio companies target older adults.
"This is a huge market and as we think about health care it is one of the biggest markets that actually spend health-care dollars," said O'Keefe. "So if you look at those individuals who are 55 and over they actually spend 52 percent of the health-care spend even though they only comprise 26 percent of the population."
The "caregiving market" alone — a spending category that many boomers are pouring money into — is expected to reach $72 billion by 2020, according to a recent report from AARP, with the cumulative total spent on caregiving from 2016 through 2020 expected to reach $279 billion.
One start-up success story in this space is Honor — a caregiving app that's known as the "Uber" of home care — which just raised $42 million in Series B funding, backed by lead investor Thrive Capital and others including Andreessen Horowitz. The company connects older adults with caregivers for short-term jobs.