AI-Powered Long-Term Care Planning | Bay Area Startup

A Personal Catalyst for Innovation in Long-Term Care Planning

Lily Vittayarukskul, as shown in the accompanying image, was pursuing a degree in aerospace engineering when a life-altering event occurred: her aunt received a diagnosis of terminal colon cancer. Having been raised with significant support from her aunt, Vittayarukskul and her family dedicated themselves fully to providing care. She remembers, “We went all in on her care.”

Financial and Emotional Strain

Following her aunt’s chemotherapy treatment, Vittayarukskul’s aunt experienced a significant decline in health, becoming increasingly frail. Her family, originally from Cambodia, then spent approximately two and a half years managing her daily, long-term care requirements. This period created substantial financial hardship, as Vittayarukskul explained to TechCrunch, “It wiped us out financially.”

The profound emotional and financial toll of this experience led Vittayarukskul to shift her academic focus toward genetic and data science.

The Founding of Waterlily

In December 2021, Vittayarukskul established Waterlily, a San Francisco-based startup. The company’s mission is to assist individuals and their financial advisors in navigating the complexities of long-term care planning by modeling potential costs and funding strategies.

According to Vittayarukskul, Waterlily aims to empower financial advisors and insurance agents to provide more informed recommendations regarding appropriate financial products, tailored to a family’s anticipated long-term care needs.

Addressing a Critical Timing Gap

Vittayarukskul points out that individuals typically begin considering long-term care options between the ages of 65 and 70, or when a need already exists. However, she argues that this often proves to be too late to adequately prepare.

Waterlily utilizes artificial intelligence to forecast a family’s future long-term care requirements and associated expenses. It then provides guidance “in building a care plan and figuring out the right way to pay for it,” Vittayarukskul stated to TechCrunch.

Potential funding solutions include purchasing life insurance with a long-term care rider, obtaining a dedicated LTC policy, utilizing annuities, or self-funding.

AI-Powered Predictive Modeling

Waterlily’s predictive AI is applicable to individuals aged 40 and above.

The company’s AI modeling software leverages data from over 500 million data points and machine learning algorithms to generate highly personalized predictions regarding care needs and costs. It forecasts the “when,” “how,” and “how much” of potential long-term care expenses.

Data Sources and Security

“We have formal data-sharing agreements with long-term care providers, government databases, academic research studies, and individual users,” including the Centers for Medicare & Medicaid Services and the Federal Long Term Care Insurance Program. Vittayarukskul also noted that they are finalizing contracts with insurance carriers to securely integrate anonymized data.

From Angel Investor to Co-Founder

Initially, Vittayarukskul founded Waterlily as a solo venture. Evan Ehrenberg, an early angel investor, joined the project after being impressed by initial research. Ehrenberg, previously the founder and seller of Clara Health, tested the platform himself.

His personal experience with the platform’s long-term care predictions – which prompted him to modify his lifestyle and financial plans – led to a deeper involvement.

“After six months of working together, we knew it was a great fit and made him a co-founder,” Vittayarukskul explained.

Ehrenberg’s Background and Role

Ehrenberg’s background is notable: he earned a neuroscience PhD from MIT at the age of 16, after graduating from UC Berkeley at 16. He currently serves as Waterlily’s chief operating officer.

He observed parallels between long-term care and challenges encountered in clinical trials during his time with Clara Health. Patients often sought less expensive, generic drugs due to insurance limitations, even when name-brand medications were preferred. Similarly, long-term care is often not covered by health insurance, leaving many financially unprepared, as Vittayarukskul highlighted.

Distinguishing Itself in a Complex Landscape

While several tools facilitate long-range planning, Vittayarukskul posits that Waterlily’s approach is notably more individualized. For instance, Genworth’s cost of care calculator provides average figures based on ZIP codes. Platforms like NaviPlan, eMoney, MoneyGuidePro, and RightCapital are comprehensive financial planning systems that incorporate long-term care modules or cost estimations as part of their broader functionality.

She explains that, “Although these tools assist advisors in modeling retirement and insurance scenarios, their long-term care projections generally rely on national averages or Monte Carlo simulations to introduce variability and assess financial plan robustness.” Conversely, Waterlily “integrates sophisticated predictive modeling with a user-friendly interface.”

Launched publicly in March 2024, Waterlily is yet to accumulate year-over-year performance data. However, Vittayarukskul informed TechCrunch that the startup’s current monthly recurring revenue (MRR) exceeds 22 times its initial MRR following its first month of operation. Furthermore, she stated that its average monthly MRR growth rate since launch has been 58%.

The company presently serves eight significant enterprise clients, including Prudential and “multiple other Fortune 100 insurance companies.” Hundreds of independent financial advisors and insurance agents also utilize Waterlily, according to Vittayarukskul. Its revenue structure is subscription-based, charging $250 per advisor or agent seat monthly.

The startup has now secured $7 million in seed funding, spearheaded by John Kim, founding partner at Brewer Lane Ventures, with strategic investments from Genworth, Nationwide, and Edward Jones. Previously, Waterlily raised a $2.2 million pre-seed round from investors including Scott Barclay, managing director of healthcare at Insight Partners.

Waterlily intends to allocate the newly acquired capital, raised through a SAFE agreement, to expand its engineering, data science, and enterprise management teams. Continued refinement of its AI models and data partnerships are also planned. Additionally, the company will amplify its sales and marketing initiatives.

Currently, the startup employs nine full-time personnel, supplemented by contractors.

Looking forward, Waterlily is exploring applications in disability, critical illness, hospital indemnity, and Medicare planning – essentially, “any domain where advanced predictive modeling can empower families to make informed life and health coverage decisions,” Vittayarukskul noted.

The company also reports receiving inquiries from insurance providers interested in leveraging its data for underwriting purposes. Potential international expansion to Canada, the U.K., and select Asian markets is also under consideration.

Kim, a former president of New York Life and current investor, conveyed to TechCrunch his investment in Waterlily stems from his belief that it represents “the first AI-powered guidance tool addressing the most substantial need as the American population ages.”

He further elaborated: “Long-term care insurance represents a significant and expanding need, often unmet by trusted advisors. Waterlily’s guidance tool offers a unique and personalized recommendation for individual long-term care requirements. I anticipate it will revolutionize the long-term care insurance market.”

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