The Old, The New and the Future Yoopies
Today, Yoopies announces a 4 million euros serie A investment and the acquisition of its English competitor : Findababysitter.com. We are happy to join this adventure together with Runa Capital because Yoopies’ learning curve is impressive and we believe in their new model. Here is why.
Once upon a time, there was a tricky B2C business
Launched in 2012, Yoopies matches parents with their 2 millions babysitters and caregivers by emphasizing on the “social recommendations”. The matching is based on various criterias such as the geography, past experiences, spoken languages and availability.
The childcare market appears to us as a decent long-term trend: in 10 years will there still be parents looking for solutions to take care of their kids? Probably. And there is a myriad of fragmented players trying to deliver this service. As a VC, XAnge bumped in two main warnings around the B2C marketplace model:
1. It is particularly hard to be heard in this crowded space so expect big bucks to acquire visitors on your website.
2. and as soon as trust is established between both parties, the need for a platform becomes less immediate.
Although the Yoopies team execution was impressive at the time, Yoopies was not intended to be financed by Venture Capital money. It was a very good “founder business” as we call them, a model that can make its founders happy and rich but doesn’t scale easily and quickly.
Benjamin Suchar, the CEO and founder, called me a couple of months ago. He knew I was going to be skeptical but he was not in the least deterred and managed to catch my attention with his pivot: end of 2015, Yoopies had gone from B2C to B2B2C. Now how does that impacts the two key questions above?
With the B2B2C model, a B2B subscription is paid for by the company (whose employees are the parents, the end customers), which lowers the cost of C’s acquisition. Parents still pay themselves for the childcare services and do that increasingly online: the platform handles payments and all related paperwork — which enables Yoopies to help parents find the best fiscal incentives and the relevant states subsidies. Parents end up paying less than in a direct cash deal with the caregiver and don’t have to face the daunting admin paperwork. For recurring services, which is the sweet spot of Yoopies, this is a no-brainer value proposition and parents have virtually no incentive to short-cut the platform to deal directly with the babysitter.
On the other hand, Corporates are delighted to have an opportunity to “score points” with their employees by offering must-have services. These corporates (Société Générale, Publicis, BNP Paribas) and SMEs (Jardiland, Agnes B, …) are even asking Yoopies for more services such as elderly care, concierge services, counseling support or access to gyms close by. And that’s why Yoopies is launching in september YoopiesatWork, a platform of services provided by third party partners. As always, the focus will remain on workplaces where the timetable is not aligned with the French school system (hospitals, train stations etc), meaning it is difficult for parents to take care of their children.
This is a three-force model (parents, caregivers and companies) and as such, a model more difficult to disrupt than the usual 2-force marketplaces (with supply and demand, think Uber). More difficult to run as well, and that’s where we need to say a few words about the management.
A young and convincing CEO
This pivot was made possible thanks to the remarkable qualities of its CEO. I figured Benjamin was so persistent, remarkably catchy and convincing with me that he must be the same with his clients and business partners. Although he founded his business more are less straight out of university, Benjamin is a cash-efficient manager and knows how to surround himself very well, which is another quality we love to see as a VC fund.
In 2015, Benjamin made another bold and strategic move : getting the president of the Babilou group, French leader in cribs for communities and businesses : Rodolphe Carle, to invest in Yoopies. Today, both companies are partners and collaborate together. This is another proof of Benjamin’s ability to make the right decision with a good timing too.
Runa & XAnge as co-leads — use of funds
With the pivot, all three key ingredients I look at before investing — management, positioning and the unit economics — are looking good. XAnge is delighted to co-lead this investment round with Runa Capital, a well respected name in the French & international startup scene.
The fund raising and the acquisition of FindaBabysitter.com will help Yoopies grow fast in Europe. Beyond France, Spain, Italy, Switzerland and Belgium where the business had already reached critical mass, this acquisition will jumpstart the UK business with nearly 200.000 caregivers available on the platform from day one.
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