In the past 12 months, we have come across a few interesting European companies that are reimagining the way older people learn and socialise. We believe in this market opportunity and want to contribute by sharing our thoughts to walk through:
(b) Our understanding of the early players (& Market Map)
(a) This new market is pushed by several macro drivers
I) Ageing European Population
The European population is aging, driven by increased life expectancy and lower fertility rates (source). Today ~30% of the population (~90m people) is >55 years-old and by 2050, this age class will represent ~42% of the total population (140m people) (source - pages 18, 19). In Europe, ~4.5k people will turn 65 every day between 2021 and 2030, driven by increased life expectancy. In France alone, there were 16.7m retired people in 2019 (~25% of the total French population) and on average, France is seing ~720k new people retiring every year. (source)
II) “New generation” of older adults is digitally connected
The new generation of 65+ is digitally connected and willing to engage in and pay for online activities. Interestingly, the behaviours of this population who use internet have changed considerably between 2009 and 2020. This research (social life section) shows that the adoption of the following three activities have dramatically increased:
Internet banking: 10% of elderly people in 2009 vs. 55% in 2020
Telephone/Video calls: 4% in 2009 vs. 53% in 2020
Email communication: 17% in 2009 vs. 74% in 2020
The elderly population is clearly increasing its digital skills and presence. This is mainly driven by the increasing number of people with digital skills passing into older age (i.e. ”adults with digital skills who are becoming older adults”).
III) Spending behaviours and increased income
The median equivalised net income (i.e income after tax and deductions) for older adults in Europe grew by 18% between 2012 (€14.1k/year) and 2020 (€16.7k/year) (source) and the value of old-age pension benefits also rose overall by 25 % on the same period (2012: €1Tr vs. 2020: €1.32Tr) (source). In the US, older people tend to spend more on certain categories such as travel ($3,431 / year) and food ($2,090 / year) according to research by Epsilon (page 7) Entertainment ($761 / year) and education ($183 / year) are the third and fourth leading categories. While we couldn’t find similar studies for European adults, we can assume that these US spending behaviours generally reflect the same behaviours of Europeans.
IV) New online habits and COVID effect
According to a recent study done by Google in the UK, “a majority of online seniors spend at least six hours a day online and own an average of five devices.” ****These older adults go online for different reasons: staying in touch with friends/family (91%), managing their finances (87%) and improving their health/wellness (73%). We believe that the COVID-19 situation was a forcing function for older adults to go online and interestingly, their new habits are clearly here to stay. In the same study, a total of 70% of seniors say that they will spend at least the same amount of time online in the next few years.
V) Increasing age of retirement
The normal age of retirement in Europe is being pushed up by most countries to 65 years old, which is forcing workers to stay in the workforce longer (source). The workers must pay contributions to pension schemes over a longer period of time in order to be able to retire.
Three founders in the space offered their perspectives on the market:
Alex, cofounder and CEO of Mirthy:
“Just as globalisation and technology changed how people lived and worked, longevity will do the same over the coming years as we live much longer lives. The classic three stage life made up of 'education, work, retirement' will need to be reinvented as the number of years spent in retirement stretches significantly. I believe there is going to be even more of a need to generate income in retirement, coupled with the renewed sense of purpose lost from the work stage.”
Hannah, Founder CEO of The Joy Club:
“There’s a macro driver around the changing role of older people in society. Throughout the course of human history, older adults have been respected and considered as the experts as they would pass down methods of e.g. making textiles and weapons, help rear children and grandchildren and would hold social history in their memories. Other society members would go to them for wisdom and advice. But now - in many societies - we have Google to answer our questions, family members aren’t necessarily living close by and older people have lost their historic place in our social groups. So, how should older people feel connected and who should they connect to? How can they get a sense of purpose? How can they share their wisdom and skills in a way that is meaningful to them?”
Jon, cofounder and CEO of Vilma:
“Compared to previous generations, baby boomers have higher expectations with regards to older adulthood. They want to learn new skills, discover new interests, enjoy and share experiences, connect with others and keep growing. Likewise, they get to retirement wanting to stay active with a high level of vitality coupled with an increasing familiarity with new technologies. We are witnessing the beginning of a golden era for older adults- the level of knowledge, experiences, energy, generosity and curiosity they have is spectacular. You can see it everywhere- we just need to connect the community to realise the full potential.”
(b) There are already several players trying to take advantage of this nascent opportunity
Disclaimer: It is by no means an exhaustive list. Please feel free to suggest companies that we have missed (dg@brighteyevc.com).
We have found three main observations while crafting this high level market map:
Observation 1: The market is nascent. There are only a handful of early players operating in Europe and the total amount of VC funding in this space in Europe is still small (less than €20m for all European players + most of the funding went into “For pleasure” solution). We also couldn’t find a dominant player in Europe as of yet. There a few candidates well positioned but the jury is still out. All this suggests that market timing might be right to build a European leader.
Observation 2: We found two main categories of solutions: one type for “learning for pleasure” and another one for “learning for purpose”. This distinction is a bit subjective and we recognise that there is some overlap between the two categories, especially for companies such as Mirthy, Vilma, Vermut, The Joy Club, and others. Naturally, “for pleasure” solutions are more likely to be used by retired people, who tend to have more free time.
Observation 3: Looking at the solutions across the board, we see the solutions trying to market themselves primarily based on five attributes:
Social: Most products promote the ability to make meaningful connections, sense of belonging and connect with other people who have shared common interests.
Trust: Safety (i.e. avoiding scams), quality and human interaction - not chatbots are prominently advertised.
Ease of use: Solutions often feature a simplified UX/UI. They want users to get straight to the core value of the solution without wasting too much time.
Flexibility: the notion of freedom seems to be key for retired people. Thibaut, cofounder of Alphonse commented that “their new life is providing them with a higher degree of freedom which can be translated into (a) having more time, (b) less responsibilities, (c) [potentially] more financial independence (retirement windfalls, potentially lower cost of living, etc.) that they might have not had earlier when they were active”. While this might not be a great news for LTVs (!), it is a key component that needs to be embedded into solutions.
Embracing being an “older adult”: Hannah Thomson, Founder CEO of The Joy Club, shared: “people in later life tend to not consider themselves to be ‘old’ and they don’t want to be made to feel ‘old’ by brands. However, they do recognise they are in a distinct life phase and want to be with like-minded peers, with whom they can try new things and make the most of their retirement - marketing effectively to this demographic requires navigating this nuance, so that customers feel seen and heard by the brand.”
(c) Where we believe the [potential] opportunities are:
Based on this high level analysis and on interactions with a number of founders in this new space, we found several themes that could unlock the learning experience for senior people. Funnily, most of the themes tap into some of the core human motivations such as social and belongingness, esteem, self-actualisation and stay mentally and physically active. We also took a stab at imagining possible business models for each opportunity (disclaimer: we might be completely wrong but it was fun to try at least!).
Unlocking and accessing the wisdom, insights and hard-to-access knowledge of older adults for younger generations Older adults have developed significant work/life experience (reached pro level in some cases!) that could be leveraged to help and guide younger people in different contexts (schools/university/workplace). One possible way of doing that could be through some kind of “multigenerations mentorships”, where mentees pay a fee to access insights and receive guidance, just like any coaching/mentoring platform (“BetterUp for 65+”). Another potential way could be launching vertical marketplaces focused on specific niches where knowledge is learned on the job and is usually hard to pass on to the next generation. In this industry (e.g. energy, construction, etc.), an accumulated knowledge over [30-40]+ years is considered as extremely valuable and this could be monetised via a B2B model, where companies would re-hire retired workers to lead internal upskilling initiatives such as launching internal academies.
Allowing retired people to increase their monthly income by making extra money We have seen that the median equivalised net income has increased over the years (see above), but we believe there is still a segment of officially retired people who would potentially be interested in staying active and increasing their monthly revenues in order to live a better life. This could be done by monetising their expertise, their talent and passion, and/or learning new relevant skills (e.g. investing in crypto for older adults? becoming a freelancer or a childminder?). There is no need to reinvent the wheel and one way of unlocking this opportunity could be via a subscription model (”Skillshare or Patreon for seniors”) where retired people showcase & monetise their talent to anyone, and/or a managed marketplace to match people with job opportunities (e.g. one day per week at a specific company → see example where retired people take part time jobs in the travel industry to get access to perks!).
Navigating the pre-retirement phase Helping older workers (50-65 years, pre-retirement) change career, find work, earn promotions right before official retirement (65 in Europe) and prepare for their retirement. Indeed, older workers need to adapt and show a high degree of flexibility to maintain demanded skills in constantly evolving labour environments within the context of changing technologies. Broadly speaking, we are thinking about the following concept: “learning platforms/universities for the 50+ who are still active”. A potential way of taking advantage of that opportunity could be partnering with and handling training needs of companies in need of reskilling/upskilling their ageing workforces (50+). A SaaS model could be leveraged in this case where members get access to coaches to guide them. Another way could be through an “exclusive” membership model (B2C, B2B2C), where members are part of on-going learning network just like Reforge or Chief.com.
Building edutainment platforms with a strong focus on human connection A large number of seniors are looking for activities to stay active and engaged, while having fun and making new friends. This could be translated into “learning/social hubs” that marries online and offline (i.e. physical centres in cities) learning experiences, where people could meet, connect, share and learn. This whole concept would rely on building a strong sense of belonging to a specific community. A yearly membership coupled with a “pay-per-activity” model would seem to be more adequate. For the online learning and community aspects, both The School of Life and Farnam Street seems to be potentially two interesting models to be inspired by.
Finding new hobbies and/or learning new skills with their peers: “By Seniors, For Seniors” Based on general insights, we have observed that there’s a certain portion of older adults who would like to learn new specific skills because they are in search for a new a hobby or simply because they might need it to keep up with latest trends. Think of situations such as DIY (e.g. learning about home improvement or about gardening), basic digital skills (e.g. learning how to use MS Office, communicating with family members via video chat), language learning (e.g. learning a new language with native speakers who are the same age), and so forth. Whatever the reason, building a marketplace where people of the same generation ((”I feel comfortable with people my age”) are connected could be an interesting way to break the adoption barrier. Another potential way would be launching a B2C online learning platform for older experts where learners would pay per course (“Maven for older adults”).
Allowing seniors to raise their profiles and be seen as “cool”. The harsh reality is that society does not always value older adults and elevate them. There are a lot of stereotypes about this population and we believe that there are tons of “cool” people - in every sense of the word - who are 65+ and fully retired. While this opportunity clearly lies on the entertainment side of things, finding ways to show the world that older adults can be modern, dynamic and inspiring is a compelling opportunity to explore for us. The core question for us is: “can 65+ become creators and/or influencers?” The answer is: YES, 100%. This could be done through a combination of a media approach with a superstar effect for instructors (“Cameo/Masterclass/Mindvalley for seniors”). Similar models mentioned above in the “Allowing retired people to make some extra cash” section could also be leveraged too.
We want to congratulate and encourage all the passionate entrepreneurs who are building companies in this nascent space. We would love to receive your feedback on this piece and if you are building a learning/edutainment platform for the 50+, let’s chat: dg@brighteyevc.com
Finally, thank you to the following founders for their insights and great feedback: