At Collab+Sesame, we think that helping families is one of the most important ways to help kids. Parents’ schedules at work and at home have changed dramatically in the last 50 years, but tools for parents and caregivers - especially those working outside the home - have not kept pace.
The Bureau of Labor Statistics reports that forty years ago, about a third of mothers with kids under three worked outside the home; that has now almost doubled to 61 percent. While nearly 11 million children under five are now in some form of childcare, the options for most families are slim, expensive, and of poor quality. The statistics are staggering:
In 24 states, childcare is more expensive than in-state tuition at four-year public colleges. (For infant care, make that 33 states.)
In most metro areas, childcare costs for families with two children range from 15% to 30% of family budgets.
Estimates suggest that only 10% of childcare meets the quality requirements that lead to positive effects on children’s outcomes.
One of the biggest challenges is that daycare, one of the most affordable options, generally works during standard business hours - while many parents do not. Startups are beginning to fill the void, and we’re beginning to see opportunity in a few areas:
Organized childcare: Some startups aim to make the daycare and pre-school experience more seamless. These are important, nationally scalable solutions that should make it easier to open and manage childcare centers - enabling preschool and daycare managers to focus on educating young kids. We think there’s also significant opportunity to help parents better discover nearby care options.
Transportation for kids: HopSkipDrive, Shuddle, and Zum all focus on providing high quality rides for children. These services are particularly compelling when they pair rides with additional childcare, because they solve for when parents need an extra hour or two of care before they are home from work or for a last minute meeting. With these platforms, building accountability and trust is key - and focusing on childcare (not just point-to-point rides) is critical to differentiating from other ridesharing companies.
Part-time childcare: It is very challenging for parents to find part-time care, especially in cities where caregivers are in high demand and prefer to hold full-time positions. This often makes it uneconomical for parents to work full-time, limiting parents’ potential earnings (and career growth). Emerging childcare platforms provide part-time and last-minute care, which is important for the situation described above and for when unexpected things come up. There are two possible approaches to this: a Lyft-like model, or a platform that enables parents in a community to coordinate with each other (for free or for money). GoKid and Kidsanity are a couple examples of the latter. Zimride (later Lyft) has taught us that paid marketplaces can be more successful because of the liquidity provided by opening the platform to people outside a narrow parent or school community. However, a strong offline model already exists for taking care of other kids at school or in the neighborhood. This wasn’t the case for carpooling with strangers in the Zimride example.
Most of the emerging companies in these categories are still very early, but we think there is significant opportunity to create (and capture) a lot of value in this market. Daycare alone is a $53B market in the US, and that doesn’t consider babysitting and nanny services. While acquiring new users is difficult to scale given the fragmented nature of childcare, we fundamentally believe that there is a matching problem between those who are qualified to provide care and the families that need it. We’re always looking for investment opportunities that fix that inefficiency, so please reach out if you’re passionate about this too!