By: Jesse Draper, Ashley Ramirez & Jennifer Kwan Mandelbaum —
There are nearly 80 MILLION families in the United States. Yet Venture Capital has overlooked this massive opportunity for numerous reasons. At Halogen VC, we’re investing in the Future of Families because families have enormous challenges yet to be addressed by technology and this is big business for investors.
Parents are exhausted, overworked and overwhelmed. 60% of American families have two working parents, many of whom are constantly trying to make ends meet and juggling between work and family 24/7. In addition, the pandemic has been tough for millions of parents – from having anxiety over the health and wellness of their children to losing their jobs. In fact, 51% of parents said their jobs were impacted by the pandemic. Beyond that, with all the kid duties and a full plate of other to-dos, it’s hard to be a parent period. Bottom line: families need help.
To gain a deeper understanding of the big issues parents are dealing with today, Halogen VC commissioned its first inaugural 2021 Future of Families Survey, in which over 600 parents across America shared their insights on what childcare issues keep them up at night, and what resources would help them better manage their day-to-day routines and to lead a healthier, happier life. We received several passionate, heartfelt responses; some parents even told us they felt heard and found the survey therapeutic. We read each and every answer and so many of them touched us.
The results of the survey strongly prove Halogen’s hypothesis
- Solving childcare is the biggest untapped business opportunity in 2022/coming out of covid
- Based on our market research for family needs, guess what – this big issue addresses a $7.5 TRILLION MARKET. Yes, that’s right – TRILLIONS.
Let’s take a look at some survey results
- 96% of parents have childcare stressors. Our results indicate that across all income levels, Cost of Childcare & Education is the #1 stressor with a whopping 73% of parents worried about this matter, followed by Lack of Quality Care and Lack of Hours Needed for Childcare, both of which 44% of families stress about. In addition, 37% of parents also stress about the Lack of Activities and Stimulation for their Children and 20% of them say that Lack of Transportation / Access to Childcare or School is a headache.
- 97% of careers were impacted due to childcare responsibilities. Given our current broken child care and support system, it’s no surprise that parents’ careers are impacted. Because of kid duties, almost 30% of our survey takers refused or decided not to work towards a promotion. In addition, roughly 20% of parents quit their jobs due to family responsibilities. With 65% of parents indicating that they don’t have a lot of flexibility in their work schedule to handle family duties, it is not surprising to see that workforce dropout and lack of motivation in career growth is a thing.
Parents are not getting enough support from work. This is very clear. 43% of mothers have three months or less of maternity leave covered by their employer while 56% of survey takers believe that maternity leave should be at least six months. A shocking 15% of mothers said they did not receive any parental benefits from their employer. Halogen portfolio company ‘The Skimm’ launched #ShowUsYourLeave to force employers to start raising awareness around their parental leave policy for this exact reason. Our data confirms this is still an issue.
- At least 85% of participants use Family Technology, aka FamTech, to help manage their lives (ex. meal delivery/food preparation, education, financial planning, childcare, etc). There is enthusiasm in adopting new FamTech apps: at least 50% of participants are interested in using at least one new type of Famtech app. Parents are desperate for convenient and easy-to-use solutions that simplify their lives.
- When asked ‘What would make your parenting life more manageable?’, we saw a trend here with the responses received: parents are busy and want reliable, affordable support/resources and convenience.
The opportunity is HUGE
The Future of Families is a $7.5 Trillion market. Sectors in this space are having double-digital annual growth, and this trend is expected to continue in the coming years: FamTech has a +40% CAGR, Childcare +11%, Edtech +16%, Digital Workplace +21% and Child & Youth Services +11%. These numbers alone prove that there is real demand for solutions, and based on our survey results and other deep-dive research, there is tremendous room for growth and opportunity in these areas. To name some: more women are joining the workforce, single-parent homes are rising and more people are moving away from home; therefore, they don’t have traditional family support systems nearby.
Our survey results and research allow us to stay laser focused on early-stage startups with cutting-edge technology and services, offering tools that enhance family lives and help them thrive at work, school and home. We are homed in on FAM: Flexible Care & Work Life; Affordable, Quality Care & Resources and More Care: Educational Options & Alternatives. We believe companies that possess these attributes will help parents reach their family, career and personal aspirations and pave the way to a brighter future for their children.
For the past five years, Halogen has been investing in various Future of Family subcategories that address parents’ most pressing needs. The early success of these startups has led us to double down on these categories:
Childcare. We have game-changing childcare solutions that have gone above and beyond to provide flexible, quality care to families, including WeeCare, the largest childcare network in the USA providing affordable, vetted & trusted in-home daycare and preschools; Brella, which provides full time and flexible, on-demand childcare and HopSkipDrive, a ride service for children ages seven to 17 and that follows strict safety and security standards and provides safe transportation for Foster Systems across the United States (It is estimated that 70-80% of the incarcerated in the United States prison system today went through our Foster Care system so we need many more solutions here.)
Servicing another governmental children’s issue is our portfolio company, Binti who addresses an enormous both domestic and global need: streamlining the foster/adoption process with technology. In less than five years, the company has helped over 40,000 families get approved to foster or adopt children. This is 60% more efficient than our government had been in the past with placements mostly done by handwritten paperwork.
Education. Caribu is an early stage, first and only educational screen time multi-platform video-calling experience designed to engage young children in various activities with friends and family. Toucan makes it easy for users to learn new languages while browsing the internet. We need so many more options here. Educational opportunities both online and in person keep children off of the streets and decreases crime.
Meal/Food Preparation. This was surprising to us. With many meal services at our fingertips these days, families still want more options. Families are looking for healthier, more simplified delicious meal options that are easy and enjoyable. We invested in One Potato for that very reason – parents can prepare a family-friendly meal using organic, pre-prepared ingredients in just a few simple steps with special child portion pricing.
Financial Planning. Almost 40% of parents who took our survey are interested in using a financial planning app. Trust & Will makes it easy, fast and affordable for users to create, manage and pass on their legacies. Ellevest is the #1 leading female name in Fintech, offering dedicated robo advisor and holistic, gender-aware financial solutions. Their thoughtful investment and career services have generated wealth for many women and their families.
Career / Workplace: AllVoices supports working parents and beyond by making sure companies maintain a healthy and happy work culture. You can voice all work issues anonymously and more using this empowering HR platform. In addition to more innovative benefit and HR offerings like those that both Weecare and Brella also offer, we found that families would also like better time management solutions.
In addition to these pressing issues for families above, a number of parents voiced the need for convenient shopping platforms and quality goods. Halogen portfolio companies Babylist and Monica & Andy, both dominate in this space – baby registry marketing and organic clothing for babies, respectively.
It’s time to invest in solutions for the 80 million families in America. These pain points are not being felt by a small portion of this demographic – per our survey, nearly every one of these families is struggling. Across the income spectrum, across the country, parenting is the top issue affecting every other aspect of their lives. With better technology in childcare, education, famtech, digital workplace and youth services we can solve for millions of Americans top stressors and build the next billion dollar businesses of the future. Addressing childcare is the biggest untapped business opportunity of 2022 and we’re ready to lead the charge but we encourage other funds and investors to join us. We can’t do this alone. Deploy capital into this space, it will be returned many times over. This is a FOR PROFIT opportunity and one that affects all families.
A huge special thank you to our participants and Future of Families companies for contributing to the success of the survey. We are grateful to have you part of this critical movement. We are in a childcare crisis and we hope to be a small part of making the future for families brighter. We’ve said it before, we believe in space travel and blockchain like the rest of you investors but let’s solve these problems here on Earth. We’re talking about a $7.2 Trillion opportunity.