Where Does AgeTech Investment Stand?: VCs Weigh Promise Against Payout

Experts estimate that by 2040, one in five Americans will be 65 or older, up from one in eight in 2000.

Despite the country’s rapidly aging population, digital health solutions that cater to older aduls — a category often referred to as AgeTech — is still in its early years.

Earlier this month during a panel discussion at Medicarians 2025 in Las Vegas, MedCity News Editor-in-Chief Arundhati Parmar explored the state of AgeTech venture capital with three investors. The panelists agreed that despite growing clear opportunities, the AgeTech market currently lacks the dedicated funding, proven business models and major success stories needed for it to take off.

The Medicarians conference is a senior health and AgeTech event to connect digital health companies, investors and other industry leaders.

Where does AgeTech funding stand?

(0:15 – 5:19)

Investment activity in the AgeTech space is still nascent, said Ray Jang, principal at Primetime Partners, a venture firm dedicated to aging-related technology. He pointed out that there are few funds dedicated exclusively to this technology — despite the country’s growing population of older people.

He also noted that there’s a disconnect between product designers and end users. Many digital health solutions are built by a “hot shot Silicon Valley entrepreneur” type in their 20s or 30s, Jang stated. People at this stage of their life tend to have significantly different perceptions of what usability looks like compared to people in their 60s or 70s.

Both Jang and fellow panelist Max Zamkow agreed that there should be more investment in aging-related digital health solutions. Zamkow is a managing partner at Third Act Ventures, another venture fund dedicated to AgeTech. With both he and Jang on stage for the panel, Zamkow joked that over half of such firms were represented.

Zamkow also highlighted the fact that most AgeTech developers have a very different relationship with technology than their end users. He cited older people’s concerns about independence and being monitored as a barrier as well.

“There are also some interesting dynamics about getting older and not wanting to feel infantilized, or feel like your independence is being taken away and being monitored, and it just makes things really hard, and that’s why there’s still so much opportunity,” Zamkow declared.

Another panelist — Robert Garber, managing partner at 7wireVentures — noted that the aging population is not a monolith.

AgeTech is one of his venture firm’s four areas of investment, along with behavioral health, chronic disease and underserved populations.

“Someone who’s relatively young and healthy at 65, living an active lifestyle, looks very different from someone who’s 85 with five chronic conditions, struggling with activities of daily living. We need solutions to address both ends of that spectrum,” he remarked.

Is there investment for AI companion technologies to combat senior loneliness?

(6:32 – 13:42, 16:52 – 23:30)

Zamkow invested in a company called Care.Coach. Its AI companion solution provides 24/7 virtual support and companionship to older adults to empower independent living and alleviate feelings of loneliness.

He said there are other AI companion technologies starting to emerge that go after the same problems, but the industry is still waiting for breakout success stories.

Zamkow also noted that the barrier to entry for AI companions is now very low, with many developers relying on platforms like OpenAI.

Because many companion technologies are so similar and not deeply proprietary, investors have a hard time identifying sustainable competitive advantages, he explained.

In addition, Jang said that one of his portfolio companies offers AI companions for older adults as part of its platform.

“How we’ve seen it used well is when it’s used as part of a solution that does still encapsulate human connection — because that’s something that I don’t think, at least today, we can really replicate with just technology. When we see that we have groups of older adults that come together and leverage AI to help them with discussion points or moving the topic along, I think that’s where we get the most value add,” he explained.

Broadly speaking, Jang sees AI as “more of a task completing tool” than a standalone product when it comes to healthcare use cases.

Do NIH funding cuts give investors pause?

(13:43 – 16:52)

The Trump administration recently cancelled billions of dollars in funding for the National Institutes of Health — a move experts say will harm the country’s reputation as a global leader in health and technology. While it will take months or years for the cuts’ true impact to fully materialize, this reduction in funding will likely have an adverse impact on innovation in the AgeTech space, Garber said.

He also noted that investor confidence is diminishing as a result of these funding cuts.

“Uncertainty creates paralysis. There’s a lot of fear and deer in the headlights going on right now where people don’t know what they don’t know. In the absence of certainty, they do nothing — we’re already seeing that happen across a lot of the commercial players outside of government, because they just don’t know. And for those who are publicly traded, that uncertainty creates even more risk for them as they’re trying to understand what it means to their budgets, to their balance sheets, to their investments,” Garber explained.

Jang also stated that the cuts are concerning, pointing out that NIH funding is often critical for early-stage AgeTech startups.

Beyond the loss of funding, there is also the risk that startups may stray from “the same academic and medical rigor that we expect from the NIH and their pathway,” he remarked.

On a more optimistic note, Jang said the funding gap might push entrepreneurs to tackle existing, well-known problems in aging care rather than chasing entirely new innovations.

“There [are] actually a lot of issues in this space — and I actually don’t think that you need to necessarily build something completely new to create meaningful differences in our healthcare system,” he declared.

What are the opportunities and perils when innovating in the AgeTech market?

(23:53 – 29:03)

With older adults being the fastest-growing part of the country’s population, the investment opportunity is huge for AgeTech, Garber stated.

“I think we have both a business and moral imperative to continue to innovate here,” he remarked.

He added that longevity tech has also emerged as a separate investable category, but said he thinks we’ll see it start to blend with AgeTech as healthcare leaders think more about healthspan versus lifespan.

Garber also pointed out there are still challenges around payments and business models.

“I don’t particularly believe that most of the direct-to-consumer [AgeTech] businesses have a lot of staying power. Eventually, most of them have turned to a B2B approach at some point. So I think we have to continue to think about who’s paying and what’s the problem we’re solving, and what are the hard dollar ROIs that we can measure?” he said.

Investors are looking for ways to do well by doing good, but that only works if the capital flows are there, Garber noted.

Creating new capital streams in healthcare is incredibly difficult, so companies need to tap into existing ones. It’s tricky to predict where those flows will come from — government funding may shrink, and consumers aren’t likely to pick up the slack, Garber pointed out.

“There’s a bigger incumbency on perhaps the private sector to make up some of that shortfall. And then we have the nuance of some of this is federal and some of this is state. It just depends on where you are in the ecosystem — and the complexities are real,” he explained.

In Zamkow’s view, changes in reimbursement are what make it so hard for venture capitalists to invest in AgeTech companies.

When a business model might disappear in a couple years, it’s hard for startups to build something sustainable, he stated.

“A couple years ago, everyone was trying to go and create supplemental benefits, and then the readjustment of star ratings just crushed all that,” Zamkow declared.

On a brighter note, Jang pointed out that there are many ways AI can improve Medicare.

Compared to commercial insurance, Medicare is much more regulated, from how insurance is sold to the paperwork after a visit, he noted.

“There’s a lot of form filling — and if you talk to any physician or any provider, nobody likes to chart or nobody likes to fill out forms. We’re really seeing a lot of big changes, both from the health plan perspective and from the provider perspective, on things like automating authorizations or automating callbacks or automating post discharge forms,” Jang remarked.

There is also potential in using AI to create personalized care plans based on a patient’s unique history, instead of a one-size-fits-all approach, he added.

How can the AgeTech industry attract more capital from mainstream investors?

(29:03 – 32:32)

The AgeTech industry needs big, visible wins, like successful public exits, to prove to mainstream investors that it’s a viable, high-return market — not just a niche for impact-focused capital firms, Garber declared.

Success attracts capital, and the lack of liquidity and exits in recent years has made it harder for AgeTech startups to build momentum and draw in diversified investors, he said.

He noted that “incrementalism” is the thing that scares him most in his work — emphasizing the importance of tackling large, meaningful problems in healthcare rather than settling for incremental progress.

“When we look at things, that’s really the biggest bar. If we’re successful, does it matter? Do we impact enough lives? Do we save enough money to improve the quality and the outcomes? I think that’s really where the rubber meets the road. We have to start there, because that’s where the sustainability of the business comes from,” Garber stated.

Photo: Medicarians