"AI Can't Unclog Drains"... Why Major Investors Are Pouring 2 Trillion Won into Manual Labor

U.S. PE Firms Acquire Plumbing, HVAC, and Electrical Repair Businesses

South Korean Care Company Caring Secures 110 Billion Won in Investment

"People—Irreplaceable by AI—Are the Core Asset"

Amid the ongoing artificial intelligence (AI) investment boom, cases of investing in essential service companies that are difficult for AI to easily replace are garnering attention. Domestic venture capital firms are making consecutive investments in care service companies, where on-site staff such as care workers are essential. Meanwhile, U.S. private equity funds are acquiring plumbing, heating and cooling, and electrical repair businesses to expand them into large-scale service enterprises.

Domestic Venture Capital Pours Money into 'Care Labor'

According to the investment banking industry on July 23, South Korean senior care company Caring secured a Series C investment round worth 40 billion won this year. Stick Investment and Stick Ventures participated as new investors, while existing investors SV Investment, IMM Investment, and Hyundai Investment Partners also followed up with additional investments. The company's cumulative investments have now reached 110 billion won.

Caring recorded a consolidated revenue of 165.8 billion won last year, an all-time high for the company. As of May, the company had around 13,000 care workers, including social workers and certified caregivers. The company plans to expand its integrated care-at-home facilities, offering both home-visit and daytime care, to 70 locations by the end of this year, and hire more than 1,000 new employees.

Similarly, CareDoc, which also provides care services, is planning to conduct a pre-IPO funding round this year with the aim of going public next year, seeking to raise over 20 billion won. Korea Investment & Securities has participated as a key investor, and other venture capital firms including iM Investment Partners have also invested. The capital raised will be used to expand care, nursing, and senior residential services, as well as to prepare for the IPO. As of last year, the company’s cumulative transaction amount exceeded 300 billion won, and it offers customized care services to more than 10,000 customers every month.

Although these care companies utilize AI technology, the operational capability to secure and train scattered care workers and maintain consistent service quality is what determines their value. A domestic venture capital industry official commented, “Structural demand is growing due to the aging population, which is translating into investments in care companies. Since the final service must be delivered by people such as caregivers and social workers, it is difficult for AI to replace them in the short term.”

U.S. Investors Turn Local Repair Firms into $10 Billion Enterprises

Internationally, residential management services such as plumbing, heating and cooling, and electrical repairs are also emerging as major investment targets. The demand for plumbing and heating/cooling services does not disappear even during economic downturns, and the fact that AI and robots cannot easily replace on-site technicians is further supporting these investment strategies.

Recently, global alternative investment manager Apollo Global Management decided to acquire a minority stake in U.S. home facility service provider Apex Service Partners by investing $2 billion (about 3 trillion won). Apex installs and repairs HVAC, plumbing, and electrical systems for residential properties. Since its establishment in 2019, Apex has acquired a series of regional companies and now operates 75 brands across 46 states in the U.S. It employs more than 13,000 staff and generates annual revenue in excess of $3 billion. Including debt, the company’s enterprise value is estimated at approximately $10 billion.

In February, Blackstone also reached a deal to acquire Champions Group, which employs more than 1,800 on-site technicians and has 150,000 paid members, for approximately $2.5 billion. Champions Group offers a home management platform uniting heating and cooling, plumbing, and electrical services. Oak Hill Capital is also reported to have agreed to acquire Guild Garage Group—created by consolidating garage door repair companies—for more than $800 million.

Notably, U.S. private equity employs a "roll-up" strategy, actively acquiring a company of a certain size first and then sequentially bringing in regional operators in the same sector. They retain local brands, technicians, and customer relationships, while centralizing accounting, advertising, call centers, recruitment, and parts procurement systems.

A domestic private equity CEO stated, “While cutting-edge technology development is attracting substantial investments, the value of physically demanding onsite work such as plumbing and tiling is also rising. It is critical to pay attention to sectors where AI is not easily applicable and skilled labor is indispensable.”

This content was produced with the assistance of AI translation services.