A Q&A with TenderTree founder Andy Agrawal. The San Francisco-based company was founded in early 2012 and closed a $1.3 million Seed funding round in mid-November. A graduate of the 500 Startups accelerator program, investors include Scott and Cyan Banister, Denis Grosz, Expansion Venture Capital, Inspiration Ventures, Deciens Capital, and 500 Startups.
SUB: Please describe TenderTree and your value proposition.
Agrawal: TenderTree allows families to find and hire trusted caregivers. Today you can look at reviews and information about every kind of service provider out there, but when it comes to hiring a caregiver for your loved ones, there is almost no information available about the person you hire.
We are changing all that by allowing families to view profiles of caregivers, including background checks, references, photos, and reviews. Our platform and mobile application manage payments, payroll and taxes, insurance—all online.
SUB: Who are your target markets and users?
Agrawal: Our customers are the baby boomers—sandwiched between caring for their children as well as their parents. They use our site to find caregivers for their parents. We also cater to disabled individuals looking for in‐home care.
SUB: Who do you consider to be your competition?
Agrawal: Our main competitors are the brick and mortar home care agencies who do everything offline. They charge an arm and a leg, are super inefficient and give you creepy results.
SUB: What differentiates TenderTree from the competition?
Agrawal: TenderTree allows families to see all the information about the caregiver they are hiring, including photographs, hobbies, background checks, work experience and reviews from other families who have hired that caregiver. So, now you can find that perfect caregiver—the one who loves crossword puzzles or cooks Italian food. Offline agencies do not make any of that information available.
Our platform also provides insurance and bonding for each caregiver so you are fully covered. Every customer is fully protected by a $3 million insurance policy that covers general liability, professional liability, vehicle coverage as well as bonding. Finally, our mobile application allows caregivers to track their hours and communicate with the families about what they have done during each shift. It’s a level of transparency that has never existed in the industry.
SUB: When was the company founded and what were the first steps you took in establishing it?
Agrawal: The company was founded in early 2012. The first step I took was to interview as many caregivers and families as I could and understand their needs and truly figure out if this is something they’d want to use. The response was overwhelmingly positive with people often telling me they couldn’t wait for this to be built so they could start using it.
SUB: What was the inspiration behind the idea for TenderTree? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Agrawal: I saw a really broken industry—where people are paying ridiculous sums of money and getting random people assigned to them to care for them. The entire senior care industry is really horribly screwed up in that way. There are these huge middlemen that are gouging everyone and adding very little value to the ecosystem.
The ‘aha’ moment was when I read an article in the New York Times by a blogger who pointed out how there were scattered databases and registries for information about caregivers, but nothing that was easily accessible, and even with these registries you were left to manage all the tax paperwork on your own and cross your fingers when it came to insurance and bonding.
SUB: How did you come up with the name? What is the story behind it?
Agrawal: With ‘tender’ we are embodying the gentle and delicate nature of the service we provide. At the same time, we are sturdy and reliable like a tree with many branches that extend out in different directions.
SUB: What have the most significant obstacles been so far to building the company?
Agrawal: The notion of finding care for your loved ones online is new, just as shopping online was new a few years ago. That’s why we are working carefully to ensure customers have a great experience and will no longer have to rely on antiquated home care agencies to find care.
SUB: You recently raised $1.3 million in Seed funding. What are your plans for the funds?
Agrawal: Our plans are to grow and make the service available to more people. We are growing our team as well and hiring developers plus customer acquisition folks. Anyone interested should email us at [email protected]–if you apply, tell us the hardest problem you’ve ever solved.
SUB: Why was this a particularly good time to raise funding?
Agrawal: We have been growing really fast—more than doubling our revenues each quarter and this was a great time to grow the team and add some fuel to the fire. The new round of funding will allow us to accelerate our growth.
SUB: How does the company generate revenue or plan to generate revenue?
Agrawal: We process all payments for families to caregivers and keep a percentage of the amount processed. This is exactly how the offline agencies operate, except that you might pay $28 to $30 per hour and the worker only makes $10 to $12 per hour. Since our system is online and eliminates a lot of the inefficiencies of the agencies, we allow caregivers to earn more and families to pay less, while keeping a percentage of the transaction for processing the tax paperwork, providing insurance and bonding and allowing families to have a record of care through our platform. Also, if someone doesn’t show up, our platform finds you a new caregiver immediately.
SUB: What are your goals for TenderTree over the next year or so?
Agrawal: We are taking an antiquated and largely offline industry and bringing it online. Our goals are to focus on providing a great customer experience and roll out the service to a wider audience. We’re listening closely to customer feedback so we ensure our product is built to serve them best.
TenderTree – www.tendertree.com