Welcoming MyVillage to the Red Sea Ventures Portfolio
We’re excited to announce Red Sea Ventures’ investment in MyVillage, a $5.95M Seed round, the largest in Montana’s history!
MyVillage is reimagining early childcare by enabling and empowering individuals to become home-based daycare franchise owners. MyVillage offers a “business-in-a-box” solution — a brand, community, software, and platform — for franchisees to open and operate a high-quality home-based childcare business successfully. The company’s mission is to “harness the power of community to create exceptional childcare for every child.”
The Problem: More than half of Americans live in “child care deserts,” defined as areas where there are either no licensed child care providers for children under the age of five or there is less than one slot in a licensed child care center for every three children under the age of five (CAP Report).
With increasingly dual-income households and a millennial generation limping financially into adulthood, the demand for affordable childcare is ever-increasing. And as we know, Constrained Supply + Increased Demand = Increased Price, so the problem is only getting worse. And while it’s promising to hear the public sector focused on Universal Pre-K, those programs start typically at age four and only three states have adopted the program thus far, so there remains a need for the private sector to solve this problem for families with children under the age of 4 or 5.
The Team: Co-Founder Erica Mackey previously founded a solar company that raised $250M in Africa. Upon returning to the U.S., she and Co-Founder Elizabeth Szymanski each had their first child and immediately ran into the pervasive problem of finding high-quality affordable childcare. They set out to build a childcare solution for the average American family. Erica and Beth are incredibly capable and mission-driven founders, conveying an infectious passion, energy, and vision (above Intro Video).
The Solution: Home-based daycare is not a new thing; there are currently over 200,000 licensed “family care providers” (the technical term for home-based daycare) in the United States. However, the process of setting up as an independent provider is daunting, the operations even harder, and then turning a profit on top of everything nearly impossible. As a result, only about 13% of the children in the $48B paid childcare market, attend home-based daycare. Our thesis is that MyVillage will substantially expand the supply of home-based childcare providers redefining the industry making this a leading model of early childcare.
From a demand standpoint, home-based “family child care” is a great solution to the accessibility, affordability and quality problem. Home-based care costs roughly 1/3 center-based care as a national average, see chart below. Home-based care is also 3–5x cheaper than dedicated paid nannies or nanny-shares (Center for American Progress). We believe this is essential to the empowerment of dual-income households allowing parents the flexibility to chose whether they stay home or pursue careers.
The Product: MyVillage provides a community and platform for individuals to succeed as entrepreneurs in the home-based childcare market. Franchisees receive mentorship, coaching, marketing, software (such as parent communication, e-payments, tax & accounting), liability insurance, and most importantly a trusted premium brand. MyVillage helps individuals like Shawnna — pictured here — successfully make the transition from an employee in HR at a local company to a small business owner. In meeting with Shauna, a MyVillage home-based Franchisee (pictured above) based in Bozeman, it became apparent the essential role MyVillage plays as the backbone of her success, helping her navigate the emotional, operational, financial, and regulatory hurdles of starting a home-based daycare business successfully.
We’re incredibly excited at Red Sea Ventures to join Erica, Beth, the rest of the MyVillage team & the many MyVillage home-based daycare franchise owners like Shawnna on a mission to provide access to affordable, high-quality childcare nationwide!
