People Share Their Cars, Their Homes, and Now Their Nannies

At Inovia, our interests gravitate towards underserved industries. Nothing excites us as much as an overlooked market that drives our daily lives and employs countless everyday people, which somehow fails to capture society’s collective attention and awe.

Enter the Care Economy. In 2016, over $300B was spent in the United States on care (spanning a number of dimensions, including childcare, housekeepers, eldercare, and pet care). This is a reflection of how far care norms have evolved. With an aging population and a falling stay-at-home parent population, the market for external care providers continues to grow. There has historically been no efficient and cost-effective way for families to connect with quality caregivers, nor for caregivers or care-related businesses to target families. And despite its size and growth, the market for care remains large, informal, and highly fragmented.

Every member of the Inovia team remembers being paid with cash at the end of a night of babysitting. Setting the scale of that transaction aside — for some of us it was $2/hour, while the youngest of us remembers $7/hour — the very concept of online transactions was a foreign and uncomfortable idea. Again, the dynamics governing this norm have changed; online (and increasingly, mobile) payments are ubiquitous as we increasingly evolve into a cashless society.

Amidst all this change, one job has remained constant: nannies. Care providers themselves, and the families who employ them, have had a remarkably consistent relationship over the years. As parents embark on their new milestone, they turn to hyperlocal channels to try to find the perfect match, factoring in geography, age, and personal preferences like language and religion. When we first invested in CareGuide in 2014, it was on the strength of their response to this inefficient marketplace.

Over the past three years, CareGuide has evolved their vision — first with its foray into fintech with the launch of HeartPayroll, and now by making child care more affordable for families across North America. Child care costs in the US are rising much faster than overall inflation, including housing, transportation, clothing, and food. (Only medical care costs have been rising faster — slightly.) The inefficient marketplace dynamics coupled with the precious assets at hand has meant that nannies were an expensive luxury only within reach for high earners.

To make ends meet, parents have been linking up and forming ad-hoc “nanny shares”, where two families share the time of one nanny, each paying about two-thirds of the cost of hiring a nanny on their own. Families save on child care costs, nannies earn more, and more families can afford childcare and get to work.

In response, CareGuide officially launched Nanny Lane, a marketplace built for nanny sharing. Until now, there has been no civilized way to organize a nanny share; families are spending hours each week wrestling with clumsy facebook groups, classifieds websites, and other patchwork solutions. Nanny Lane is the first purpose-built service to fully enable the nanny share phenomenon. Families spend more on child care than cars and travel, where Uber and AirBnB have made sharing possible.

By matching one nanny to multiple families, each family’s contribution to the overall nanny salary lowers, decreasing the cost barrier to hiring a care provider, and expanding the care market dramatically. Nanny sharing has always lived across informal Facebook groups, flyers, school newsletters or conversations between friends, but a successful match relied on friends with similarly aged children, extremely close proximity, and the same ideal nanny profile. By leveraging an existing supply on both sides of the marketplace and managing the matches algorithmically, CareGuide reduces the friction to nanny sharing, finally launching this parenting hack into the mainstream!

We’ve spent the past three years working alongside CareGuide’s leadership team, and have tremendous faith in John, Ali, Ed, Brian, and Alyssa’s ability to execute and drive growth, while maintaining unparalleled compassion and respect for their customers. And if you’re a member of the Inovia family across the US (with a family of your own!) we encourage you to find your perfect nanny on Nanny Lane!