Daycare startup looks to make sure the kids are all right

This year the child daycare industry is expected to take in $57 billion. The founders of Winnie only want a small piece of the pie.

Continue Reading Below

Winnie is a startup that offers a marketplace for childcare and early education, and this week snared $9 million in Series A investments. Ten companies were involved in the round and were led by Rethink Impact, a female-led firm that invests in female-led companies, such as Winnie.

Parents use Winnie’s web site or app to discover quality local daycare and preschools. Started in 2016 by former Postmates executives Sara Mauskopf and Anne Halsall, in the last year, Winnie has expanded the number of cities it serves from 500 to 7,000 and features more than 150,000 daycares or preschools.

Co-founder Mauskopf, told Crunchbase that times have changed with many households and “things like childcare are no longer optional since the vast majority of families in this country don’t have a stay-at-home parent now.”

And Winnie’s timing could be spot on. According to research firm IBISWorld, “industry revenue has grown as a result of sustained low unemployment and increased disposable income amid high demand for childcare services. During the period, demand for childcare services has remained strong despite the high and increasing cost of daycare services.”

Increasing indeed.

Daycare costs for babies and toddlers average $11,666 per year ($972 a month) in the United States. But it depends on location, size of centers, and more, while prices range from $3,582 to $18,773 a year ($300 to $1,564 monthly), according to the National Association of Child Care Resource & Referral Agencies (NACCRRA).

For preschoolers, costs are a bit lower with an average of $8,800 a year or $733 a month. Again it depends on where you live, and families could pay anywhere from $4,460 to $13,185 a year ($371 to $1,100 a month).

The most expensive states for preschool-age kids in a childcare center? Colorado, Massachusetts, Minnesota, New York, Pennsylvania, Rhode Island and Wisconsin, with costs over $8,000 a year ($667 a month).

Stocks in this Article

BFAMBRIGHT HORIZONS
$152.43
+0.37 (+0.24%)

If Winnie’s long term goal is to take the company to the public markets, beware. Several companies have gone public and returned to private ownership in the daycare sector, such as Learning Care Group, which was purchased by private equity firm American Securities in 2014. Another private company,  The Learning Experience, has been in the space since 1980.

Investors -- and many parents -- have put their most precious investment in Bright Horizons which has more than 1,000 childcare and early education centers around in the United States, United Kingdom, Ireland, Canada, the Netherlands and India.

GET FOX BUSINESS ON THE GO BY CLICKING HERE