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Care Economy Overview

About the
Investor’s Guide

Child care

A $136 billion child care market desperate for supply and ripe for reinvention.

$136B

Current
Market SIZE

$167.8B

POTENTIAL MARKET SIZE
WITH GOVERNMENT-SIDE GROWTH

Source: McKinsey & Co Analysis, April 2021

A surge of post-pandemic government spending is going to fuel innovation in the private sector.

The child care market is unaffordable, fragmented, and broken. Federal and state governments are now stepping in to support families with their child care needs. This funding, leveraged with the right technology, can help spur the increase of child care solutions on multiple fronts—from helping families find care quickly and efficiently, to helping providers expand their operations.

The demand for child care is palpable, and the market is ripe for new solutions in child care supply.

Before COVID-19, more than half of American families already lived in child care deserts (areas with an insufficient supply of licensed child care). The 2020 pandemic decimated the child care industry, forcing widespread closures and leaving families scrambling for solutions.

‍
Entrepreneurs are already building exciting new models to support people to move into this meaningful, flexible profession and also help existing child care providers with their business and operational needs.

Here are just a few examples of new models in child care:
‍

Lowering the barrier to become a child care provider and micro-entrepreneur
Connecting parents to child care providers through online marketplaces
Providing community-based platforms to create support systems for providers
Innovating on business models by bringing in employers as payers of care benefits

There has been a sea change in government policy around care and a wave of funding is coming that could boost the child care market.

Which ones might apply to your business?

Check the boxes to add them together.

$67.9b

TOTAL GOVERNMENT
OPPORTUNITY

CURRENT FUNDING:
$3.7 B
Temporary Assistance for Needy Families (TANF): Funding for financially vulnerable families with cash assistance, child care subsidies, and work support during critical times
$9.7 B
Child Care and Development Fund (CCDF): Funding to support quality child care access, child care assistance for families, skill building for teacher workforce, and support in quality for child care programs
$10.3 B
Head Start: Funding to support low-income children for full-day/full-year child care aged 3 to 5 through a mix of private providers and public centers
$12.4 B
State Funding for Pre-K Programs: Funding for pre-K and early education programs, a percentage of which flows into the private sector
POTENTIAL FUNDING:
$6.8 B
Child Tax Credit (CTC): Funding for families to use for care (e.g. child care, parenting tech, child wellness solutions) -- up to $1,600 per family above the current $2,000 credit
$25 B
American Jobs Plan: Funding to upgrade child care facilities, increase the child care supply in areas that need it most, and expand tax credits for employers to build child care facilities at places of work

CURRENT FUNDING:
Temporary Assistance for Needy Families (TANF): Funding for financially vulnerable families with cash assistance, child care subsidies, and work support during critical times
Child Care and Development Fund (CCDF): Funding to support quality child care access, child care assistance for families, skill building for teacher workforce, and support in quality for child care programs
Head Start: Funding to support low-income children for full-day/full-year child care aged 3 to 5 through a mix of private providers and public centers
State Funding for Pre-K Programs: Funding for pre-K and early education programs, a percentage of which flows into the private sector
POTENTIAL FUNDING:
Child Tax Credit (CTC): Funding for families to use for care (e.g. child care, parenting tech, child wellness solutions) -- up to $1,600 per family above the current $2,000 credit
American Jobs Plan: Funding to upgrade child care facilities, increase the child care supply in areas that need it most, and expand tax credits for employers to build child care facilities at places of work

$25B

There has been a sea change in government policy around care and a wave of funding is coming that could boost the child care market.

Which ones might apply to your business?

Check the boxes to add them together.

*Government sources: acf.hhs.gov (TANF), acf.hhs.gov (CCDF), eclkc.ohs.acf.hhs.gov (Head start), NIEER.org The current child tax credit provides working families up to $2,000 per child per year to offset the costs of raising children. Additionally, up to $1,400 of the $2,000 CTC can be refundable for each qualifying child if certain conditions are met.The American Families and Jobs Plan is currently in review and the information above is true as of June 29, 2021.

11%
GROWTH

Average annual profit growth 2013 to 2019 of Bright Horizons, the largest provider of employer-sponsored child care and back-up child care.

Source: Bright Horizons Family Solutions 10-K, March 2021

STATE-STARTUP
2021 PARTNERSHIP

The North Carolina Partnership for Children is using part of its $5M CARES Act allocation to give home-based child care providers in their state a subscription to Wonderschool, paving how tech and government can work together.

Source: U.S. News, March 2021

The contemporary child care market isn’t just about “babysitting.” It encompasses a wide variety of services and supports that parents are willing to pay for, including...

Birth, fertility, and pregnancy

‍Parent coaching on demand, parenting communities & support networks

PARENTING TECH

Advice and support on demand, early childhood  education platforms, care coordination technology

11% GROWTH

STATE-STARTUP 2021 PARTNERSHIP

11%
GROWTH

STATE-STARTUP
2021 PARTNERSHIP