Finding and affording child care is one of the biggest challenges parents face. Kinside makes the process easier by not only providing a marketplace of verified carers, but also helping parents tap into their flexible spending accounts (FSA) and other benefits to afford care. Today, the company announced it has raised $12 million in Series A funding, in a round led entirely by mothers. They include Sasha McKenzie of Wellington Ventures; Joanna Drake of Magnify Ventures; Initialized’s Alda Leu Dennis; and Maven Ventures’ Sara Despande. The round brings Kinside’s total funding so far to $16 million. TC first covered the Y Combinator alum when it announced a $4 million seed round led by Initialized in December 2019.
Brittney Barrett, Kinside co-founder and chief marketing officer, told TC that the round’s composition came together organically.
“Investors are naturally attracted to businesses that are dedicated to solving pain points that they themselves experience or have experienced. This is why representation is so important in the venture world,” she said. “ We didn’t seek out a round of only mothers, but working mothers are acutely familiar with the painfully inefficient process of finding care. They also know how much families spend on care every month so they understand the scope of the financial opportunity.”
Kinside was founded in 2018, after co-founder and CEO Shadiah Sigala spent weeks calling daycares and preschools, trying to find a place that would take her baby son and three-year-old daughter. Since its launch in 2019, Kinside’s marketplace has grown to thousands of child care centers, and it is used by parents from over 3,000 employees who use it to search for open child care spots and get pre-negotiated tuition rates. To qualify for Kinside’s marketplace, carers need to be licensed by the state, and also pass Kinside’s safety vetting requirements. Barrett explained that the company worked with state licensing experts to develop a proprietary state-by-state vetting framework that evaluates years of license and visitation history, and has a national failure rate of 5%.
Barrett said that Kinside leverages the volume of the employer-based system to pre-negotiate rates with providers. It integrates with dependent care FSAs so parents can use their pre-tax funds as they become available, and blends them with secondary payment methods, like their bank account. This eliminates the need for claims and reimbursements, making the process of paying for child care with benefits easier.
Kinside takes an agnostic approach to the kinds of employers it works with. For example, Barrett said they range in size from employers in the tech space with 20 employees and ones in the manufacturing sector with 20,000.
The latest round of funding will be used toward increasing Kinside’s marketplace functionality and developing new tools that will further expand its dynamic inventory as the company aims toward expansion to 10,000 employers and one million parents. Dynamic inventory means that the company knows in real-time when a spot becomes available at a centers, helping parents in the search. In the long-term, Barrett said that Kinside plans to leverage that data to create the right amount and type of supply in the right areas, reducing child care “deserts” or helping independent child care owners expand to a second or third location.
In a prepared statement, Magnify Ventures’ Drake said, “Finding accessible, affordable, quality child care has long been an undue burden for working parents in the U.S., and the pandemic has shone a bright light on the critical importance to employers of urgently solving for employees’ child care needs.”
