Meet 3 startups aiming to make a dent in America's child-care crisis

WeeCare changed its business model during the pandemic to focus on employers instead of individual families.

"Affordability was still a big crisis," Chang said. "We couldn't just depend on families to pay for that or providers to cut costs to allow families to do that. And that was made apparent that both employers and government had to be involved."

In April, WeeCare raised $12 million in a Series A round. Anna Barber, a partner at M13, which led the round, said the venture capital firm was attracted to the "massive market opportunity."

"When you think about how big of a problem this is, and the fact that employers are now motivated and willing to help provide child care, that's just a massive and exciting market," she said.

Sigala of Kinside also sees employer participation as one of the keys to fixing the child-care system. The company is a marketplace that matches families with child-care providers and is marketed specifically to employers as a benefit for their workers. For a fee, child-care providers get access to software for their back office.

Kinside has worked with thousands of employers across the country and more than 10,000 families, Sigala said. The startup closed a $12-million Series A funding round in June, led by investors who are also parents.

"The employer benefits from having a healthy child-care ecosystem," she said. "The child-care ecosystem … is in a precarious state constantly. They have very, very thin margins ... the child-care provider can barely make a living wage. There is a huge imbalance in the value chain here."

Startup Brella is trying to solve another facet of the child-care industry — flexibility. Founded in 2019, the company owns two child-care centers in Playa Vista and Hollywood, with a third under construction in Pasadena. Under Brella's business model, parents can sign up for the hours of care they need and utilize any of the centers. The company's technology also highlights open spaces in centers so that parents can get drop-in child care when they need it.

"Not all families fit into this working 9 a.m. to 5 p.m., working Monday to Friday model," said Wolff, the company's co-chief executive. "The pandemic really accelerated this shift of dynamic work styles."

Child-care researchers say these innovations are important, but that the widespread demand for child care necessitates more than just private sector dollars.

"You have this huge, huge challenge, and it makes sense the private sector is engaging," said Julie Kashen, director for women's economic justice at the progressive Century Foundation think tank. "To me, it's a drop in the bucket, as to the need, and the need really needs to be filled by public dollars."