COVID has brought attention to early childhood education. Here’s how investors are reacting.


One thing the pandemic has made clear, according to many experts, is that families with young children need more support than they receive.

The closure of child care centers forced many parents out of their jobs, fueling the Great Resignation. And a September US Treasury report noted the adverse effects of shortages in childcare provision.

For early childhood education, the coronavirus has stepped on the accelerator pedal, accelerating trends that were already happening, in both good and bad ways.

Market uncertainty during the early days of the pandemic had temporarily halted the growth of the early childhood education sector, which had seen steady expansion over the previous decade. But 2021 has seen a surge in spending, estimated at over half a billion dollars last August (and closer to a billion dollars now).

“COVID has taken us five years into the future,” says Matt Glickman, CEO of Promise Venture Studios, a nonprofit that supports early childhood education and child care businesses.

Over the last year or so, there has been an increase in the amount of private capital directed towards specialized and innovative solutions in the sector, giving investors hope that these new investments will improve access to early childhood education services. , especially in the absence of federal assistance. to the sector.

The appetite for change is there. The challenge, says Glickman, is to build on that momentum.

Widespread closures early in the pandemic and labor shortages underscored how intertwined early childhood is with everything else, suggests Chian Gong, partner at Reach Capital. Since then, employers across the country have shifted to more hybrid work and more working with unpredictable and non-standard hours.

Childcare businesses have been hit hard during the pandemic, says Julie Wroblewski, managing partner at Magnify Ventures. They’ve lost revenue and slots, and they’ve seen a lot of displacement. But some of these companies seem to have withstood the pandemic. For example: WeeCare, a caregiver-focused platform, raised $17 million in a funding round in February, according to SEC filings.

Meanwhile, new childcare technologies have shown promise as a way to help people find available care and support companies offering childcare services, according to investors like Wroblewski. For example: Winnie, an app that connects preschool and daycare services.

These companies can also provide useful data on the childcare market, the kind of data that governments did not have when seeking to provide relief funds to the highly decentralized and fragmented childcare system.

However, it will ultimately be more difficult to resolve the thorniest issues such as access and low pay for social workers.

Childcare companies operate on razor-thin margins, which has made the category difficult, says Reach Capital’s Gong. The investor models that work best are those that can creatively attract money to the category, she says. Employer-sponsored child care is one such area of ​​great opportunity.

Investors like Gong say early childhood is still a deeply underappreciated category.

While it’s a big market, it’s not seeing the level of investment, innovation or scale you’d expect, says Anna Steffeney, executive director of FamTech Collaborative, a business coalition family oriented. “I think what we’re trying to do is increase awareness of investment opportunities, solutions and innovation,” Steffeney said.

Daniel Mollenkamp is a business journalist at EdSurge. Contact him at


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