ShiftMed: June 2023 Update 

By John Keeling and Brendan Mathews

ShiftMed, formerly HomeCare.com, provides a workforce staffing and management platform for nurses and other healthcare professionals. Its customers include hospitals, healthcare facilities, and families seeking in-home care.

MFV has invested $5.25 million into ShiftMed over the past five years. As forecasted in our previous update, ShiftMed completed its latest round of financing in December 2022. The current fair value of our stake is just under $40M, including $34.65M in paper gains.

The big news since our last update is the successful closing of the company's Series E, which has created a step change in valuation for Motley Fool Ventures. Panoramic Ventures led this round, and we did not participate. Our initial investment was in the Series B, and we took part in the C and D rounds. 

Given the company’s size and ability to raise new capital, we don’t expect to put new money into it. We are very bullish that we will see further upside from here.

The news isn’t all rosy, however. While market conditions and macro trends continue to be favorable, ShiftMed has experienced some growing pains with accounts receivable (AR) management. In 2022, it had a significant increase in overdue payments from several large customers. These were sizable accounts that paid their bills in 2021, but ShiftMed was slow to take action even as overdue balances grew dramatically.

ShiftMed ultimately severed the relationship with these customers and wrote down the unpaid balances, although it is looking to claw back some of those losses through active court proceedings. Looking ahead, ShiftMed has tightened its credit standards and AR management processes to better address new customer and slow-paying customer receivable risk.

The impact of these bad customers was material to overall performance. In 2022, ShiftMed grew revenue more than 200%. The growth would have been more than 250% if not for these defaults. The company is budgeting 30% revenue growth in 2023, which would be 80% growth net of the terminated customer accounts.

Notwithstanding this bump in the road, MFV is very excited about ShiftMed’s continued strong growth moving forward. Demand in its core healthcare facility market (e.g., skilled nursing facilities) remains strong, and ShiftMed is rolling out its first hospital clients in early 2023. The hospital market has the potential to be even larger than the facilities market. ShiftMed is still in the early stages of partnering directly with insurance companies to provide in-home services as well.

Expectations vs. Results

The Foolish Bottom Line

ShiftMed could be profitable this year, but for the investments it’s making for growth in the hospital and in-home/payer markets. We believe it’s ahead of the competition in terms of entering the lucrative hospital market. If successful, this will position it as one of the winners in the category. 

With its Series E financing, ShiftMed has exceeded (on paper) our previous expected return target. It could also see an additional 2-3X+ return from here so we are upping our estimated return to $80M accordingly and pushing the timeframe out to 25-36 months.

PREDICTION BOX: (As of June 2023. It’s just a guess, not a promise.)

Amount Invested: $5.5M
Current Value: $39.9M
Estimated Return: $80M

ShiftMed in the News

• ShiftMed app allows nurses to work when and where they want