In the U.S., childcare presents a nerve-wracking quagmire for parents. It’s expensive—almost a fifth of American families spend more than a quarter of their income on childcare—but that doesn’t mean it’s a lucrative business. In fact, many caregivers make so little that they can’t afford childcare for their own kids and drop out of the workforce. Wonderschool, which just raised $2 million in seed funding led by First Round Capital, wants to solve that problem by serving as a platform for qualified providers to make a better income by opening their own in-home daycares or preschools.
Other participants in Wonderschool’s seed round include Cross Culture Ventures, SoftTech VC, Lerer Ventures, FundersClub, and Edelweiss. The funding will be used to expand Wonderschool into 15 new cities over the next year and a half (its platform currently has about 50 in-home daycares and preschools in California).
Wonderschool’s two co-founders, CEO Chris Bennett and CTO Arrel Gray, previously launched Soldsie, an e-commerce company that enables businesses to sell products through their social media profiles. The two made the leap from e-commerce to childcare after Gray had trouble finding a good daycare for his toddler near his home.
“We saw too many parents who were anxious and scared about finding childcare, as well as educators who couldn’t afford care for their own children while they were at work,” says Bennett. “We knew that there had to be a better way to address this issue for families and teachers alike.”
Caregivers are picked based on their credentials, experience, education, and location. All need to have a state license, maintain liability insurance (that Wonderschool pays for), meet health and safety standards, and follow a daily routine. Bennett says that 76 percent of Wonderschool’s partners have a bachelor’s degree, while 32 percent have also completed graduate school.
But working in childcare often means that higher education does not translate into higher earnings. Many caregivers and teachers stop working simply because of the cost of childcare for their own kids was almost as much as their income. In fact, about a third of Wonderschool’s directors were stay-at-home parents before they joined the platform.
When early childhood educators leave the workforce, however, that means other parents have even fewer options. In many cities, parents join waitlists before their children are even born in order to ensure they get a spot in a good program. The average income of Wonderschool providers (many of whom live in expensive areas like the Bay Area and Los Angeles) before joining the program was less than $38,000 before taxes. The company claims that most make around double that average after joining the platform.
Wonderschool’s platform can help with demand because it allows providers to start programs any time of the year and also gives parents transparency into availability and pricing so they don’t have to wait in suspense to find out if their child has a spot.
Many of the providers Wonderschool works with are experienced early childhood educators (a glance at their site reveals a lot of teachers who are inspired by educators like Maria Montesorri, Reggio Emilia, or Rudolf Steiner). In California, Wonderschool’s providers are licensed by the state to run programs in their homes.
Bennet says that the benefits of in-home daycares or preschools versus traditional centers often include smaller group sizes, lower child-to-teacher ratios, and mixed-age groups that allow younger kids to observe and learn from older children. For many parents, it’s also reassuring to have the same person take care of their child for years, instead of transitioning to new caregivers, which usually happens in larger daycare centers based on age groups.
One of the main drawbacks of in-home daycares or preschools is that if the provider needs to take time off, parents are often left scrambling to find other childcare arrangements. Wonderschool’s network means it is able to help parents find backup care among its other providers.
Wonderschool finds most of its program directors (which is what it calls its providers) through word-of-mouth and local events. If they pass Wonderschool’s screening process, the company guides them through the steps of setting up a business—defining their educational philosophy, setting a daily schedule for kids, figuring out what rate to charge parents—and then create a profile for them on Wonderschool’s marketplace.
Parents can book a tour, sign up for waiting lists, and enroll through the site. If issues arise once they do find a daycare, Wonderschool serves as an intermediary between them and their providers. The startup helps providers set a tuition rate, manage discounts, and accept government subsidies from parents who qualify. Its platform also takes care of the administrative tasks that can bog down in-home daycare providers, like marketing and payments, and helps them meet state healthy and safety standards.
The company’s goal is to give more children the same opportunities Bennett had when he was young.
“My appreciation for education goes back to my parents, working class, Honduran immigrants who did whatever they could to ensure that my sister and I had access to excellent education, from attending quality preschool to graduating from Penn,” Bennett says. “I want to ensure other children have the same opportunities to reach their full potential.”