Finding high-quality childcare is difficult and selecting a person or service for childcare is one of the most important decisions a parent has to make. That is why Koru Kids is making it easier through its algorithm that matches London families with the best and brightest student nannies. Additionally, this childcare startup takes care of all the administrative tasks like contracts and payroll, so your student nanny can fully focus on taking care of your children.
London TechWatch spoke with the CEO who is the force behind the push for better childcare services, Rachel Carrell. Carrell joined us to discuss the company’s future plans and the recent funding which brings the total amount funding amount raised to £4.1M over three rounds for the startup founded in May of 2016.
Who were your investors and how much did you raise?
Koru Kids’ pre-seed funding raised £600K from Matt Clifford and Alice Bentinck from Entrepreneur First, Michael Pennington from Gumtree, Global Founders’ Capital, 7Percent, and others.
Our seed funding raised £3.5M and was co-led by Albion and Forward Partners. We also raised funds from Jam Jar Investments, Samos, and Ian Davis (former Global Head of McKinsey and chairman of Rolls Royce), and others.
Tell us about Koru Kids.
Childcare in London is fragmented and outdated. Koru Kids is using technology to make it easier for families to find outstanding childcare for families. Our main service is after school care. We recruit, vet and train the best university students to become after school nannies. Our technology platform is sophisticated and allows us to match parents with great student nannies, quickly and at scale. We also take care of all the admin associated with being an employer including contracts and payroll. The students get a fun and rewarding part-time job that works around their studies. The families get a smart and enthusiastic university student to help with their after-school childcare. It’s a win-win.
What inspired you to start Koru Kids?
I had my first baby and quickly realised how painful childcare was in London. My friends and I were all finding childcare hard to arrange, incredibly expensive, and the traditional options didn’t meet our needs. I watched many of my friends either struggle to go back to work or be forced to make career choices that they didn’t want to make. So I quit my job and decided to make it my life’s work to create better childcare options in London.
How is Koru Kids different than other childcare companies?
My background is in health tech so I see the potential technology can bring to the childcare market. Koru Kids uses technology to identify the best students in London and our platform allows us to make the best possible matches between parents and students. We believe in taking the mental load away from parents, so they don’t have to trawl through hundreds of nanny profiles.
Additionally, we’re data led so we’ve been able to iterate fast which has allowed us to grow and learn fast.
Unlike other childcare apps, our service matches families and nannies together on an on-going basis. We want families and nannies to have a happy working relationship for the long term. That’s why we don’t charge upfront fees just a simple hourly fee.
What market are you targeting and how big is it?
Childcare is a huge market in and of itself, but after school care is also a really big market. Our research found that only 1 in 3 schools in London have an afterschool club or service, many of which are oversubscribed.
What’s your business model?
Koru Kids has three main customers: our nannies, our families, and their children. We work really hard to meet the needs of each group. We are different than other childcare services because we charge a simple and all-inclusive hourly rate, rather than a one-off placement fee like many traditional childcare businesses. We do this because we want our interests to be aligned with the families and nannies that we are working for.
Is nanny sharing something that parents actively want or do you have to educate parents on the benefits of this form of childcare?
After school nanny sharing can work really well. We get a lot of parents who enquire about this, but we do also educate parents on the benefits. The best nanny shares happen when families who already know each other (usually because their kids go to the same school) pair up, and then we match them with a great nanny. Another reason it works is because the children already know each other and get on well, so it’s great for the kids and the parents.
What was the funding process like?
Having my second child in the middle of the fundraise was a challenge! It was also a great experience – I loved speaking with lots of smart people about my business, receiving feedback, and being challenged. I feel like I understood my own business far better at the end of this process.
What are the biggest challenges that you faced while raising capital?
The biggest challenge I faced was having my second baby. Raising capital is a notoriously tough process, and having a baby is also difficult, but doing both at the same time is the toughest challenge I’ve ever faced. I had to choose between blocking out a period of a few weeks where I wouldn’t take meetings, or to continue taking meetings and risk cancelling last minute if I went into labour. I strongly felt that taking these few weeks off would damage my fundraising, so I continued with a full schedule. I did my first phone call the day after I gave birth and my first meeting two days later. It wasn’t easy. I was trying to put everything I had into it but was running low on reserves.
What factors about your business led your investors to write the check?
Our commitment to technology and building a scalable platform to solve multiple childcare problems was a really big factor.
I also think that investors recognised the strong team and culture that is the driving force behind Koru Kids. We have a culture of trying new things and we all treated this process as a great learning experience. The team is committed to improving and growing the company, and I am passionate about developing my team and recruiting talented people.
What are the milestones you plan to achieve in the next six months?
In the next 6 months, we will be ramping up our afterschool service, including after school nanny shares. We’re recruiting a lot of nannies and we’re also growing our team in the office, particularly our tech team. It’s important that we continue to build out the product at pace and build features our nannies and parents will love.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
There is a lot of support out there, but you need to keep your ear to the ground and be active in looking for support. We had thousands of families on our platform without spending a penny on marketing, and a lot of our customers still hear about us through word of mouth. We also managed to get free office space for a year. We got lots of great advice from people kind enough to meet us for coffee, too.
Where do you see the company going now over the near term?
Koru Kids is set to scale up to meet the needs of more parents who desperately need after-school childcare in London. We’re growing fast and are planning to train over 1K students in the next few months. To scale at this level we need to keep hiring talented people onto our tech and operational teams.
What’s your favourite outdoor activity in London?
I really love going to Highgate Wood with my kids; there’s a great playground, and the cafe is really nice too. We are also loving going to outdoor paddling pools at the moment.