Koru Kids, the London-based startup that helps you find and manage childcare, has raised £10 million in new funding to scale its platform.
The Series A round is led by Atomico, with Atomico partner Niall Wass joining the company’s board. Also participating are previous investors AlbionVC, Forward Partners, Samos, JamJar, Rocket Internet’s Global Founders Capital and 7Percent. It brings the total amount raised by Koru Kids to £14.1 million.
“Childcare is exhausting and difficult to arrange: for many families it’s hard to find the right thing at all, and for nearly everyone it’s excruciatingly expensive,” says Koru Kids founder and CEO Rachel Carrell (who has a doctorate from Oxford and previously worked at McKinsey!).
“Parents need affordable, flexible childcare to allow us to carry on in our careers but it’s very hard to find. Nurseries close early, childminders are in short supply and neither option copes well with parents finishing at 5pm one day and 10pm the next. Once I realised that there were so many people struggling with the same issues it gave me the impetus to quit my job and to create Koru Kids.”
The resulting childcare platform is described by Carrell as a “full stack” product that sees Koru Kids recruit, train, match and provide ongoing support and training to its nannies. At its core it aims to simplify the lives of working parents.
“Our platform takes care of taxes, payroll, pension, holiday, nanny communications, activity ideas and a dozen other things that can come up when you’re dealing with nannies,” she tells me. “We also help parents share nannies, so one nanny takes care of children from two different families at once. That brings down the cost for families, the nanny gets paid more and the children have a friend to play with.”
More broadly, Carrell says society should think of childcare as essential infrastructure for modern living. “If a third of London didn’t have water or roads, we’d consider that a major failing of essential infrastructure,” she argues. “As it turns out, one-third of London schools don’t have an after-school club. We need to start respecting childcare as the essential infrastructure that it is.”
Typical Koru Kids customers are described as working parents with children aged 4-10 years old who may not have access to a suitable after-school club or want to provide a broader range of after school activities for their kids.
“Before Koru Kids, the only option for these people was a full time nanny — which is incredibly expensive — or an au pair, which many people don’t have an extra bedroom for or don’t want in their house,” says Carrell.
Exact competitors are hard to pin down as Koru Kids incorporates several different services, each with specific competitors. They include payroll agencies, training businesses, nanny agencies, after-school clubs, Gumtree and other listings sites.
“The key difference is that none of them provide a seamless service as we do,” claims the Koru Kids founder. “We train our nannies ourselves, which is completely unique in the market; we do all the payroll, pension and other paperwork as well as the recruitment of nannies, and we are tech-led, using our own software, which means we can be more efficient.”
Meanwhile, the Koru Kids revenue model sees the company take a commission per hour. Rather than the large upfront fees a nanny agency typically charges, Carrell says she has deliberately tried to align the startup’s interests with that of parents using the platform.
“If a match doesn’t last very long, Koru Kids is out of pocket; I think that’s as it should be,” she tells me. “We should only win when the parents win. That incentive structure means that every day our team comes to work and thinks about how to make the best possible matches, and what product to build to help our nannies get better and better each day.”