With names like Solace, Tulip and Eirene, start-ups are hoping to make cremation the next big at-home purchase.
Less than two hours after you book a cremation with Eirene, a start-up in Ontario, the company dispatches a mortuary transit driver to pick up your loved one. The body is ferried to a cold storage facility, where it stays until Eirene has processed the end-of-life paperwork. From there, one of Eirene’s crematory partners will cremate the body, and a funeral director who works for Eirene will either drive the ashes to your door or send them via mail. All told, the process takes about one week.
It’s the promise of direct-to-consumer brands like Casper, retrofitted for the death industry. Taking this approach to an industry as emotionally charged — and legally complex — as the death care business might sound far-fetched. But as the cremation rate balloons in North America, with that option expected to be taken in about 63 percent of deaths in the United States by 2025, investors are betting that the future of the business lies in e-commerce.
At the same time, millennials and Gen Xers are increasingly making end-of-life decisions for their parents, and some are expecting a process that approximates the ease of an online order. To reach them, new companies with names like Solace, Tulip, Smart Cremation, After Cremation, Eirene and Lumen are borrowing both the business models and the bright, sans-serif aesthetics of start-ups like Glossier and Allbirds — all in the hopes of making cremation the next big at-home purchase.
That future, however, will require a stark reshaping of the funeral industry. Right now, a vanishingly small portion of funerals and cremations are arranged online. Most Americans turn to one of the country’s 18,800 traditional funeral homes, and few of those even have an active website. A report from 2018 found that only 16 percent listed their full prices online (though the number has probably shifted during the pandemic). Online cremation start-ups may be a novelty in 2022, but as digitally native shoppers grow older in the coming decades, they might not stay that way.
“It’s one of the industries that really hasn’t changed in the past 100 years,” said Mallory Greene, the founder of Eirene. “You’re still going to walk in and make the arrangements, fill out a bunch of paperwork.” For people who are grieving, she said, “it’s obviously very burdensome and overwhelming.”
Right now, “Gen X is who we’re marketing to,” she said, largely because Gen Xers arrange the bulk of funerals today. But she said millennials would make up an important demographic in the future: “As millennials start making arrangements, I think they will be heavier on the digital side.”
Ms. Greene’s father worked as a mortician in an independent funeral home in Toronto. Though she pursued a career in financial tech, she always knew she wanted to start her own company, and she couldn’t get the thought of revamping the funeral industry out of her head. Ms. Greene started Eirene in 2019 with the goal of eliminating the stress and logistics from arranging a cremation.
Around the same time, two former Nike executives founded Solace, backed by a modest $1.7 million in venture capital. Solace now operates in Seattle; Portland, Ore.; and several cities in Southern California. Also in 2019, a major operator of funeral homes, Foundation Partners Group, bought the start-up Tulip Cremation, which today is active in eight states. It has deep pockets behind it: Foundation Partners Group’s parent company is the private equity firm Access Holdings, which said last year that it was investing $150 million in improving the tech side of the funeral business. In October, After Cremation in Utah disclosed a $1 million funding round.
The pitch, to consumers and investors, boils down to convenience and price. The companies point to the growing number of Americans who live away from home as a target demographic.
“It wouldn’t be that uncommon to see an older parent pass in Florida, for example, while their children live somewhere up in the Northeast,” said Mike Doyle, Tulip’s general manager. That doesn’t mean people will automatically turn to an online start-up. Many families have visited the same funeral homes for generations, and it will take more than a little bit of inconvenience to get customers to sign up.
More persuasive to the average person might be the price. While a typical cremation costs a few thousand dollars, these start-ups advertise prices from roughly $800 to $1,000.
They contract with wholesale crematories, and the start-ups say they can pass on the savings. Plus, “with the right technology enabling a more efficient process, we can handle more cremations than a typical funeral home,” said Keith Crawford, a co-founder and the chief executive of Solace.
Getting started has been slow. In December, Tulip completed its 20,000th cremation since its introduction in 2018. Solace would disclose only that its annual customer total is in the “four figures.” Lumen, a small Nashville company, said it was approaching 300 cases since its introduction in April.
“From actual dollars and cents and how many people they’re serving, it’s still fairly small,” said Suelin Chen, the chief executive and a co-founder of Cake, a website that helps people plan their end-of-life care. But “I think they have an outsized influence, she added.
They are also coming up against a more fundamental problem: Cremation doesn’t lend itself well to e-commerce. Most of these start-ups are tech companies first. They build the website and back-end platform that lets people place an order, but they rely on vendors for everything else.
Operating as a tech overlay may work well for, say, a travel or hospitality start-up, but in the funeral business, it brings its own headaches. In almost every state, consumers can buy cremations only from a licensed funeral home. That means every one of these start-ups needs a brick-and-mortar shop in each state where it offers services. Eirene has a small office for regulatory reasons, but Ms. Greene said no customer had ever asked to visit it. Mr. Crawford said Solace had small offices in Seattle, Portland and Los Angeles that the funeral directors on his staff “work from occasionally,” but most of his team is remote.
Other states have requirements so rigorous that it’s hard to imagine this business would even be possible in them. Alabama, for instance, requires funeral homes to have a conference room, a display area with at least “eight different adult size caskets” and a viewing area that can hold at least 100 people.
“Nearly all states have licensure requirements that were established without contemplating this type of business model,” said Mr. Doyle of Tulip. “As we continue to grow, there are certainly regulatory frictions that are slowing down the process a little bit.”
Victoria J. Haneman, a law professor at Creighton University who studies the funeral business, said that “many of the state-by-state regulations are outdated and completely unnecessary.” While consumers benefit from federal regulation around price disclosure, some of these state-level rules protect the companies already operating and create a disincentive for new operators, she said.
Tulip, for example, might be in the best position to make those economics work. Its parent company, Foundation Partners Group, already owns over 170 funeral homes, crematories and cemeteries across 22 states, and Tulip is using that infrastructure to serve its online customers. Unlike its competitors, it doesn’t have to sink money into empty storefronts.
Smart Cremation, which has been active for over a decade, has the same perk: Its owner is NorthStar Memorial Group, a company with over 75 funeral home and cemetery locations.
Some old-school funeral homes have offered a version of this service for decades. Barbara Kemmis, the executive director of the Cremation Association of North America, recalled that when her brother died at a college in Wisconsin in the 1990s, the funeral director shipped his cremated remains to her parents in Texas.
But something new is happening. “There’s no way of gathering statistics of how many urns are mailed, but anecdotally, from our members, we’ve heard a dramatic increase,” Ms. Kemmis said.
In the United States, cremated remains are legally required to be shipped via the Postal Service, and in 2019, it introduced a postage system called Label 139 for handling them. The label was designed to increase the visibility of these shipments and the caution with which they are handled. It’s not cheap — shipping with Label 139 can cost $100 or more — but it is effective.
Tulip said around 75 percent of its customers chose to have the cremated remains mailed to them. At Solace, the portion is closer to one-third, with the rest delivered by a licensed driver.
The pandemic accelerated the rise of e-commerce by years, according to some estimates, so the arrival of these companies fits a pattern. “If you look at every other industry, online models are just becoming the norm,” said Ms. Greene, the founder of Eirene.
But in the funeral industry, even those small shifts feel momentous. “I think we’re still far away from having an app where someone can make a funeral arrangement,” she said. “I don’t think we’re there yet. But I do think that consumer needs are definitely changing.”
