Originally published by Forbes on May 4, 2022
When Julie Wroblewski met Joanna Drake in the back of a car en route to the airport after the 2018 Equity Summit conference, it only took 20 minutes for them to become friends. They had a lot in common: Both are from the Midwest, both are VCs focused on making the industry more diverse, and both have experience with caregiving. So when Wroblewski wanted to turn her care economy investment thesis into a venture firm, she knew who to call.
Wroblewski got the idea for the firm in 2019 while she was running the venture investing arm at Melinda French Gates’ Pivotal Ventures. She kept coming across interesting companies trying to tackle problems in the care economy — so she started researching philanthropic work and advocacy around the category. Soon, Wroblewski says, she realized how big of an opportunity it was: “I started to see what I thought was a very compelling and growing category for investment in venture around the care economy and family technology,” she says. “I was seeing really incredible companies and entrepreneurs.”
Drake wasn’t immediately convinced — thinking the care economy was slightly niche and more of a lived experience than a category. But that didn’t last. “At first blush, what might seem specialized is diversified across every modern family,” Drake says. “It’s really diversified across the entire population in that regard. It's a massive, massive market.”
The care economy is estimated to be $648 billion in size, according to a 2021 report, and impacts half the population, Wroblewski says. Nancy Folbre, an economist focused on the care economy and its relation to gender, tells Forbes that some people falsely assume the care economy is just related to healthcare but that it spans far beyond that. “It’s really really big, it's way more than half of GDP that is currently measured,” Folbre says. “I think the pandemic dramatized that and I think it's great that venture capital is identifying that.”
Wroblewski and Drake launched Magnify Ventures in 2020 and just closed on $52 million for its debut fund. The fund is anchored by Pivotal Ventures and will focus on early-stage companies, but will also invest further up the capital stack too. The fund will look at four main sectors: parenting and family life, future of work, household optimization, and aging and longevity. While many of the care economy’s issues existed before Covid-19, the pandemic put many of them into the forefront, which has inspired entrepreneurs to get involved and resulted in a robust pipeline of seed deals, Wroblewski says.
Magnify Ventures has invested in seven companies thus far — including Papa, a platform that connects seniors to people who can help with errands and provide companionship. The Miami-based company is currently valued at $1.4 billion. They’ve also backed early-stage companies including MiSalud, a platform that connects Spanish speakers with doctors that speak their language with the hope of achieving a better quality of care. Drake says the fund especially looks for companies that offer solutions at no cost for the consumer to utilize, a factor Folbre says is critical to improving the industry’s status quo.
The firm is finding opportunities on the B2B side too, as many large corporations look to implement care-based benefits to retain and attract employees. Magnify’s portfolio company Cocoon helps companies navigate the complex process behind employee leave, something 7% to 10% of employees will do, CEO Mahima Chawla tells Forbes. “This is becoming so top of mind for employers, we have seen all this demand,” she says. “Employers are really willing to make sure they are doing everything possible to be as supportive to their employees this year.”
Magnify looks to use its domain expertise to help companies like Cocoon grow – and also its partnerships with organizations such as AARP and The Holding Company, which can give feedback to companies and help introduce them to potential customers. “We are very excited to get out there and focus on investing now that we are done with fundraising,” Wroblewski says. “The number one priority is investing in great founders and building category leaders in this space.”