The gig economy is now comprised of approximately 36% of US workers, around 57 million people. And benefits like flexibility and independence are drawing more and more workers to this style for offering their services, babysitters included. Technology is allowing childcare providers, among other skilled workers this valuable independence, all while increasing customer-facing transparency and trust. Nanno taps into this and the underserved family tech market by bringing childcare into the gig economy.
Nanno is an on-demand marketplace that works to connect parents with trusted babysitters. The platform already boasts 15k users across 45 different states. We chatted with CEO and Co-founder Liz Oertle to hear more about how she and CTO and Co-founder Desi McAdam made their idea of bringing childcare offline a reality.
Liz, tell me about what drove you to found nanno and why are you the right team for the job?
I could say we were motivated by the fact that as moms, my cofounder and I had a ton of personal experience with the pain point — desperately needing a sitter and not being able to easily book someone we could trust. But the real thing that drives both of us is the compulsive need to solve problems when we see them. We saw this huge gap in the market — the need for an on-demand childcare solution that parents could trust — and it drove us crazy that none of the “incumbents” like Care.com, UrbanSitter or SitterCity were even trying to address it. I was a business lawyer before we started Nanno, and Desi is an amazing software engineer who’s spent her career building products for other people. As moms, we know the problem. And as professional problem-solvers, we are deeply driven to solve it.
For those that don’t know can you define what nanno is as a business?
Nanno is an on-demand app for booking amazing sitters. Our users describe us like Uber or Lyft, but for booking a sitter.
What is the core differentiator of nanno over anyone else in the market?
There are two main things. First, we’re the only national platform that lets parents enter the details about the care they need, hit “Book Now,” and be quickly matched with a great sitter who’s available when and where the parent needs them. Second, in order to match parents with sitters on demand, we had to build a very comprehensive vetting process, so we could make sure all sitters on Nanno are all great. Our vetting process is what enables us to provide on-demand booking, and we think it makes Nanno the safest way to book a sitter, whether online or offline.
What is the best piece of customer feedback that you have received?
There are two things we get all the time. The first is “Oh my goodness, it worked!” — when a new user sees the message come through that a sitter has picked up their booking and is engaged. Usually that happens within 15 minutes, and it always surprises people the first time. The second thing we hear is, “I’m so glad I found you! I’ve been looking for something like this forever!”
Do you have a sense of how much babysitting is booked via offline versus online methods?
Based on our market analysis, we estimate that no more than 10% of all babysitting is currently booked through a digital platform. The rest is booked entirely offline. We don’t think this is by choice — it’s because until Nanno, there wasn’t a technology solution that really worked.
how can your team not only capture online market share but also expand the pie?
This is a great question, and one I love to answer. We’re doing with babysitting what Uber did with ride-hailing — taking something that is currently a huge hassle and a universally bad experience and making it easy and even fun. As millennials become parents (they currently make up 80% of new parents), they’re looking for digital solutions to their parenting needs. Nanno is the intuitive on-demand app they’re looking for. And when booking a sitter is easy, people do it more. We’ve already seen people using Nanno to do a bunch of things they wouldn’t have done before — booking sitters to supervise kids at parties, booking sitters while they’re traveling, booking sitters to provide on-site childcare at conferences and events, even booking “after-bedtime” sitters so parents can go out for a few hours when their kids are asleep. (That last one is my personal favorite.) We see a lot of market-expanding potential — and the market for sitters is already enormous!
Tell us about your on-demand feature. how does it work?
It’s super simple. Parents use the app to tell us when and where they need care, the number of kids, their ages, etc. We broadcast the booking request to all sitters in the area who meet the parents’ requirements, and the first sitter to reply that they can do it is instantly engaged. The sitter calls the parent to confirm the details — and if the parent isn’t happy with the sitter they’ve been matched with after that, they can cancel without penalty. Assuming all is good, the sitter completes the engagement, and afterward payment is processed automatically.
How do you grow the business from 14k or so users to millions?
The number of people actively searching for sitters online is on the rise, as demonstrated by Google’s “trend” reports. We employ a number of different marketing strategies to get the word out to parents and caregivers, and after that, our technology does the rest.
What is the monetization model and how large do you think you need to be to be profitable?
We have two revenue models — commission-based and subscription-based. Under our free subscription, parents don’t pay any up-front cost, but a commission is built into the hourly rate they pay for sitters. Under our optional premium subscription, parents pay $29.99 per month and then the hourly rate they pay for sitters does not include our commission. We estimate that we will be profitable at a business level when we have about 100,000 parent users. At the same time, we intend to continue to invest in growth, so we’re not targeting profitability on a business level, but rather profitability on a unit-economics level. At this point, we already have profitable unit economics, meaning we earn more from a user in the first year than it costs to acquire that user.
What is the exit strategy for a business like this?
Because this market — and the family tech industry in general — is so under-served, there are few obvious strategic acquisition opportunities at this time. We anticipate that there will emerge a clear “winner” in this category in the next few years. We hope to be that winner, and if we are, we will likely exit via IPO. If we are not, we will likely exit by acquisition to whomever that clear winner is. Either way, our objective right now is to build Nanno into a valuable asset for our users, our investors and the world.
We at KingsCrowd are excited to follow this impressive team of female entrepreneurs. We are eager to see where they take the company in the coming years. The gig economy space is expanding and the family tech market is large and underserved. The dual revenue model is strong and to date has been successful, with $350k in gross revenue.
Nanno is raising on the Republic platform via Crowd SAFE with a $9M valuation cap. Though the company has not yet been rated, early due diligence is promising.
About: Olivia strobl
Olivia is a graduate of Wellesley College with a Bachelor's in Neuroscience and English. She has spent time as an investment intern at Glasswing Ventures, an AI-focused VC fund in Boston where she helped develop machine learning algorithms for identifying early signal success factors of startups.