The death industry: How innovation is breathing new life into the market

Death. 

It’s inevitable and omnipresent. In 2020, 60 million people died worldwide; 160,000 in Australia and 33,000 in New Zealand. But even though death is a natural part of life, in the West, we’re awkward and squeamish when it comes to talking about death.

Some cultures have rich and joyous celebrations of the dead, such as Mexico’s Día de Muertos. In the West, death is much less integrated into the fabric of life.

There has also been a surprising lack of innovation in deathcare. The industry has seen very little by way of digitisation, services are expensive (in Sydney, a standard coffin and burial service can be $15,000, while a no-frills cremation is $4,000), and customer NPS is low. As in many traditional industries that are ripe for disruption, a small number of large incumbents (sometimes operating behind several different brands to create an illusion of choice) dominate market share.

One reason the industry has been resistant to change is due to barriers to entry for new players: the upfront capital required to operate crematoriums and burial services are significant, as are the legal hurdles. However, we are confident that customers will begin to demand deathcare services that are infused with dignity, grace, and style, and usher in an era of tech-enabled innovation in deathcare.

This sector is larger than funerals and burials; we predict that innovation will occur in wills, estate planning, memorialisation, digital legacies, assisted dying, palliative care and end-of-life care. 

Venture capital investment in deathtech remains low — less than $80 million was invested in this space in the US in 2020. We are strong believers that we as a society will learn to do death better, and we are excited as investors to ride this wave. 

What changes are afoot? 

As VC investors, we always ask ‘why now?’ As we discussed in our investment principles, timing is crucial for early-stage startups. Since death has been a constant for the entirety of humanity, why do we believe we are on the precipice of an inflection point that’ll unleash a wave of innovation in this industry? 

Here are some macro trends that we think will play a role in driving an evolution: 

Decline in religiosity, increase in celebration of individuality

The centrality of religion to people’s lives is declining — compared to their parents, fewer baby boomers believe in God, attend religious services, or raise their children to be religious. This means people are turning away from conventional, stock-standard funeral services centred around a religious ceremony; eschewing sorrowful formal proceedings, and opting instead for services which celebrate the life and uniqueness of a given individual.

According to a 2019 survey, 73% of Australians don’t want a religious funeral, and 65% are ready to embrace ceremonies which incorporate good humour. The ‘personalisation’ trend is coming for death – more people are also planning their end-of-life celebrations while they’re still alive. 

• Consumers have information at their fingertips, and they’re scrutinising it! The funeral industry is notoriously opaque, and has garnered sustained criticism for unfair prices that take advantage of bereaved and grieving relatives. In Britain, the competition watchdog launched an investigation into the funeral sector after finding it had increased its prices by 6% (twice the rate of inflation) every year for the past 14 years. With the help of social media – including online communities such as r/DeathPositive and #deathfluencers such as YouTuber Ask a Mortician, consumers are empowered to scrutinise death services in the same way they scrutinise their financial products, mattresses, and makeup. Clued up and questioning consumers puts pressure on death services to do better, and rewards newcomers who offer fairer prices and better services;  
  
• We’re running out of burial space! This trend is literal – the world is, quite literally, running out of space to bury the dead. Cremation is on the rise: more than 50% of people are opting to be cremated; this number is expected to grow to over 70% in the next 10 years. However, we think that physical burial grounds and tombstones will be replaced with alternative physical memorialisations of loved ones who’ve passed away – such as turning their ashes into diamonds, or some more creative options we touch on below; 
• Living and dying on the internet. We now live entire lives, construct entire personas, and build entire universes, online. So what happens to our digital legacy when we die? Who controls our digital presence, what happens to the content we’ve posted, and how should our death be announced to the people who only know us through the internet? Startups have sprung up to give people solutions to these conundrums – allowing them to lay plans for their digital legacy, and even Tweet from the grave; and 
• Death is a journey. Modern medicine has made it possible to live with degenerative and other life-limiting illnesses, sometimes for several years. However, these last years of life can be challenging – reckoning with one’s own mortality is painful and emotionally complex. End of life care aims to ensure that the last years of a person’s life are lived with as much joy and abundance as possible, and equipping them with the knowledge and fortitude to face death and its impact on their loved ones. We are seeing the emergence of integrated, humane services that provide guidance, solidarity, and comfort in these last years of a person’s life. 

Who will win in this opportunity space?

The convergence of these trends will drive the creation of companies that re-imagine how we approach death. We are excited to invest in companies that innovate across the journey of death – inventing ways for us to age, die, and be memorialised as we live – with dignity, grace, style, and maybe even a little bit of pizzazz!

We believe the best companies in this space will: 

Change the conversation 

To take market share from incumbent deathcare services, newcomers will need to stand out, and stand for something different. Most people are reluctant to broach death in polite conversation, brands that want strong customer advocates and referrers will need to give their customers something remarkable to talk about while also working to normalise talking about, and planning for, death.

Deliver a high-quality service, with tight control across the value chain

Revered Silicon Valley venture capitalist Keith Rabois writes, “formula for startup success: find a large, highly fragmented industry with low NPS; vertically integrate a solution to simplify the product”. Deathcare services – which includes everything from wills, estate planning, end of life care, funeral planning, and funeral services – is an example of a fragmented industry, with piecemeal, point solutions. There is an opportunity for a player to consolidate deathcare services under one trusted brand, and out-deliver on customer NPS through having continuity and consistency across an integrated death journey. 

Isabella Rich, an investor at Our Innovation Fund, believes innovations in deathcare will follow the same patterns as innovation in software.

“We have seen product-led growth within the software industry give more power to the end-customer. The same will hold true for innovations in deathcare; newcomers focused on delightful customer experiences will disrupt monopolistic incumbents who have been more focused on profitability than the customer.”

Grow how much we spend on dying

Have you ever heard someone say, “Auntie Frankie’s funeral was amazing – there was a live band playing covers of her favourite songs, the food reminded me of some of her best home-cooking, and when her hologram appeared…!”

As funerals become more joyous occasions which celebrate the life that was lived, we predict there’ll be a flood of creativity unleashed, as people start to reimagine funerals as an opportunity to farewell their loved ones, in style. The most successful players will offer empathetic, tasteful, and customisable elements that customers can incorporate into their death journey. 

Who is currently making waves?

There are already companies starting to make waves in deathcare. Here are just a few from around the world. 

Digital-first funeral services

Bare is an Australian, digital, direct-to-consumer funeral services provider that supports people to deliver funerals that reflect their individual style, tastes, and values. Bare is transparent with its customers; its prices are fairer, and don’t contain hidden costs and mark-ups. Its website is populated with inspo that showcase more personal and meaningful ways to host a send-off, from a beachside ceremony, to a memorial hike, to turning ashes into a fireworks display. With a 4.9 star rating across more than 800 reviews, Bare is earning the right to be a trusted partner to families at a difficult time in their lives.

“The pandemic has forced us to think outside the box when it comes to planning a funeral. It’s shifted the thinking from ‘what’s been done for 100 years?’ to ‘what would my loved one actually want?’ In many cases that’s not an expensive, traditional funeral,” said  Sam McConkey, co-founder at Bare.

Meanwhile, Canadian-based New Narrative delivers virtual memorial services for funerals that loved ones are unable to attend in person — a need which the COVID-19 pandemic has exacerbated. 

Alternatives to burial/cremation

A number of greener alternatives to burial and cremation have appeared. Aquamation International offers a new method of cremation called ‘alkaline hydrolysis’, which releases one tenth of the carbon dioxide generated by traditional cremation. Coeio is the maker of a biodegradable Infinity Burial Suit made of mushrooms and microorganisms, that helps the body to decompose and turn into vital nutrients that feed the earth, and Better Place Forests allows people to find their final resting place under a private tree, in a protected memorial forest. 

Memorialisation

The concept of ‘mourning jewelry’ has been around since the middle ages, where it was common to emblazon skulls and crossbones into clothing and jewels to commemorate loved ones. Mark Cuban backed Eternerva is a service that turns ashes into wearable mementos, such as diamonds, while Parting Stone will turn ashes into a smooth, medium-sized stone that can be carried and held, and UK-based And Vinyly is putting a new spin on ashes by turning them into vinyl record that can be cherished for generations. The service allows you to “record a personal message, your last will and testament, your own soundtrack or just the sound of silence”. 

Death planning, wills and estates

US-based Cake is an end-of-life platform that is a one-stop shop for death planning. It’s a directory of services across the whole death journey, helping customers plan everything from advance directive forms, to closing your Netflix accounts, to obituaries for your gravestone. Similarly, Gathered Here is a consolidated Australian end-of-life services aggregator, a one-stop shop for wills, probates, funeral planning, and financial assistance with the cost of funerals. 

Dean Bergin, who is a Fund Manager at progressive, venture-focused family office LUXEM and an early investor in Gathered Here, says “there is pent-up and growing consumer demand for transparency, and real alternatives”.

“There’s also the beginnings of attitudinal change from incumbent service providers; they see that embracing digital technologies can help them meet consumers’ demands, giving them a chance to bring their legacy businesses into the 21st century. Both sides of the marketplace stand to benefit from embracing digitisation, pointing to a strong investment opportunity.”

Meanwhile, Empathy is a digital assistant aimed at helping bereaved families. This AI based platform helps families to organize affairs after a death.

“On average, a family can spend 500 hours dealing with the different aspects related to the death of a loved one. We provide a digital companion in the form of native apps that are built to empower bereaved families,” said CEO and co-founder Ron Gura. 

Managing digital assets

GoodTrust is a service that safeguards digital assets and shares them with loved ones when you pass away. It even includes a feature to record and digitally deliver personalised messages to loved ones at scheduled times in the future.  

Our predictions

10 years from now

In 10 years, we believe death will be increasingly de-stigmatised, and conversations about death will be normalised. Tech-enabled companies will empower people to exercise greater control over the decisions surrounding their death, including how they’re memorialised and remembered. Some of our predictions include: 

• An increase in creative and personalised death professions, including death concierges, death doulas, and death celebrants; 
• Innovations that help people make the most of their final years, with AR and VR helping people to have ‘bucket list’ experiences, even if their physical bodies are limited;
• Technologies that enable people to ‘live’ from beyond the grave, and continue to be present in their loved one’s big life moments. This could include the ability to send pre-recorded video messages on special occasions, such as graduations, birthdays, and marriages, or AI-powered bots that allow loved ones to continue chatting to a simulated version of the dead, powered by inputs such as chat records or Roam Research notes; and 
• New ways to educate people about death and help them make peace with their mortality, including psychedelic-assisted therapies that reduce the fear of death.

50 years from now

Here goes. We predict that in fifty years, death will be less inevitable, and less final, than it ever has been. Technologies will allow us to continue ‘living’ in some form, even if our physical bodies still expire. Science fiction has helped us to imagine what this future might look like — Emmy-award winning episode of Black Mirror San Junipero explores a reality where we upload our consciousness into an infinite digital realm, while Netflix drama Altered Carbon is set in a future where consciousness is digitised and stored in cortical stacks implanted in the spine, allowing humans to survive physical death by having their memories and consciousness ‘re-sleeved’ into new bodies.

While technology might not advance at this pace, development in longevity, cryonics, and virtual reality is gathering pace, and may allow present generations to extend their biological lifespans for long enough to see the dawn of a ‘science fiction’ future.

Perhaps in this future, we’ll be confronted with a new set of choices: when we depart from our physical bodies, what our personal afterlife metaverse will be like, and whether we really want to live forever. 

This piece was first published in AfterWork reading, by AfterWork Ventures – a venture capital fund that invests in early-stage tech companies in Australia and New Zealand.