Can tech fix a childcare gap? At Nesta Impact Investments, we think it can
Nesta’s Impact Investments team backs tech ventures working in areas aligned with our 2030 impact goals. Nesta’s fairer start mission, looks to narrow the education disadvantage gap so all children are ready to start school at age five. We have made our first investment of £1M (alongside European VC Atomico) in childcare platform Koru Kids, which is known for its high-quality after-school nanny services.
What attracted us to Koru Kids was its ambition to create a new model of childminding, a model that Koru Kids calls home nursery. This concept will see Koru Kids using technology to improve the process of attracting, training and supporting early years educators to create and grow childminding businesses, while assuring high-quality provision at an affordable price for families.
Not only does success with this venture promise to benefit children and parents returning to work, it will also upskill and build confidence in a new generation of childminders to earn a higher and more stable income.
Covid has had a huge impact on the childcare sector in the UK, with many providers forced to close in the face of staff shortages, cost pressures and uncertainty around the impact of parents working from home. The number of Ofsted-registered providers has fallen by 4% this past year and by 22% since 2015. As of 2020, there were around three million children under the age of four in the UK and in March 2022 there were 1.3 million childcare places registered on the Early Years Register. The result is a significant increase in need for childcare provision. The lack of high-quality childcare options for pre-school children has an impact not only on children, who miss out on valuable development opportunities, but also on parental decisions to return to work. Koru Kids has designed a solution that will give parents peace of mind that their child is cared for in a home setting by a well-trained early years educator with a strong support infrastructure at an affordable cost. We see great potential for this model to be rolled out across the UK, building a network of sustainable childcare businesses.
As well as tracking the commercial success of the business, as an impact investor Nesta measures impact delivered over time. Together with the team at Koru Kids, we are collecting data on the number of children placed with early years educators and the number of home nurseries set up. Ultimately we will co-design a way of learning more about child outcomes for those who have used home nurseries to give us more insight into how this type of early education is supporting children’s development. We are also tracking the number of families taking up the Government-funded hours in early years provision which ensures inclusive access to the home nursery offer.
We are delighted to back the Koru Kids team, whose dynamic founder, Rachael Carrell, is a parent with a background in health tech at management consultant company McKinsey and as an entrepreneur building businesses.
“The childcare sector is in a complete mess. We’re creating a whole new system which is better for parents, childcarers and children. Home nursery is the most exciting thing to happen in childcare for decades – allowing childcarers to earn a great living, parents to access affordable quality care and children to benefit from the Koru ethos which sets them up for a great life. We are really excited to partner with Nesta to make this vision a reality.”Koru Kids founder Rachel Carrell