When Bridget Garsh found out she was pregnant with her first child, her mother-in-law was congratulatory. But she also offered a warning.
“She was like, ‘Congratulations. It’s so exciting. Have you found child care yet?’” Garsh recalled. “And we were like, whoa, whoa, what do you mean have we found child care? We just found out we were pregnant.”
Garsh soon found herself in a world of pricey options in the state ranked the most expensive for child care. She also soon learned that at large child care centers, very little of those costs trickle down to the caregivers, leading to a shortage of providers across the U.S.
“The harsh reality is that working moms today need child care,” Garsh said. “It’s an absolute must and they need it really fast.”
Inspired by this nationwide problem, Garsh went on to co-found NeighborSchools, which helps childhood educators open and manage licensed, micro-daycares in their homes. The Boston-based startup announced a $5 million early-stage funding round this week to expand its services.
A 2021 survey by the National Association for the Education of Young Children found that four out of every five respondents from child care centers said that they had a staffing shortage. Around 80% said low wages was the main reason educators are leaving the field and a significant impediment to recruitment.
In Massachusetts, legislators are looking to funnel money into early education and child care services. More than $912 million was set aside for these programs in the House’s recent budget, the Boston Business Journal reported.
Garsh and NeighborSchools have their own solution to this problem.
NeighborSchools guides educators through the process of setting up and securing their license for an at-home child care facility. Then, the company’s platform helps them manage back-office functions like marketing, finance and contracts. Established daycare providers can also sign up to use the platform.
Educators do not pay for the services to launch their child care center. Once the center is operational, Garsh said NeighborSchools receives a portion of its revenue for ongoing services.
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Garsh said the at-home daycare model reduces costs because it eliminates the need to rent a large facility and pay administrative staff.
“Once all of that is paid for, there’s just very little left to pay the caregivers who are so essential,” Garsh said. NeighborSchools aims to reduce costs for parents while also funneling the majority of revenue to caregivers.
The company was founded in 2018 and has around 22 full-time employees, Garsh said.
Since its founding, NeighborSchools has launched 70 home daycares. Garsh said the majority of these are in Massachusetts.
In addition to serving child care centers, NeighborSchools also offers services directly to parents. A survey on its website matches parents with local NeighborSchools- affiliated centers that fit their needs. Parents can schedule tours or work with the NeighborSchools staff to secure a spot.
This latest round brings NeighborSchools’ total funding to $9 million. Its most recent round was led by Accomplice with participation from Chelsea Clinton's Metrodora Ventures, HannahGrey and 186 Ventures.
The company said this round will allow NeighborSchools to expand to 10 new states in 2022. Garsh said the company will likely start raising for the next round in 2023.
NeighborSchools is also exploring partnerships with employers to support working parents. These partnerships would give early access to daycare openings. They have three pilots going in Boston, Garsh said, and they plan to focus on this option later this year.
“What we heard a lot about was this idea of benefit equity and making sure that when you are offering child care solutions, you’re not just offering solutions that work for the top wage earners,” Garsh said. “You’re not just offering nannies or high-end centers. That there are options for everybody who works across the entire organization.”
