Care.com is an online marketplace that connects babysitters, nannies, caregivers and dog walkers with families seeking these services. Their mission is to “to improve the lives of families and caregivers by helping them connect in a reliable and easy way…In providing families a comprehensive marketplace for care, we are building the largest destination for quality caregivers to find fulfilling employment and career opportunities globally.”
As of December 2014, Care.com has 14.1 million members in 16 different countries (7.9M families and 6.2M caregivers), this is up 46% annually; revenue is $116.7M, up 43% annually. The website lists current members at 16.5M. In addition to providing a service marketplace, care.com also operates Citrus Lane and Big Tent which offer child merchandise and a platform for parenting groups and forums respectively.
Care.com creates value for the families by providing them with safe, reliable and convenient access to care for their loved ones. They can specify specific times and requirements (such as driving and language), read reviews and see background checks. Families are guaranteed a response within 3 days. Value is created for caregivers by providing them with a flexible way to find a job that fits their schedule and financial needs without having to know someone in the neighborhood or be recommended by a friend. In addition, it creates value by allowing for payment and nanny tax services through the website.
Care.com captures value is several ways: first, similar to the LinkedIn model, Caregivers can subscribe to an upgrade that provides additional benefits such as (in the case of the caregiver) free preliminary background checks, ability to filter job searches, proactively reach out to families and receive priority status for jobs (see below).
In addition, you can elect to do a background check of varying degrees for a $9-$59 one-time charge. Care.com captures value from the families through a subscription model as well. Care.com also captures value through its products via its Citrus Lane platform
Care.com benefits primarily from indirect network effects. These are created in several ways:
- As a two sided marketplace, care.com creates increased value from having more families and more caregivers available to each other. As each group has more options there is more flexibly and optionality to choose something that fits ones schedule and requirements (similar to Uber) and more people will be willing to use the platform.
- com also benefits from what is perhaps economies of scope as families will seek a broader array of services. For example, a family initially seeking a babysitter might consider using the platform for a dog walker or someone to run occasional errands. These economies of scope could enhance the network effects by attracting more and more members on both sides of the platform.
Care.com is uniquely poised to scale since the caregiver marketplace is so fragmented. Think about it, they’re not going up again the “mob-like” incumbent cab companies the same way Uber is, they are going against (at best) localized competition for tutoring and nursing homes, and practically non-existent established competition for babysitting services. At the same time, care.com estimates their target market to be ~42M households in the US alone – leaving them with an additional ¾ of the market to tackle. If care.com can capitalize on some sort of social network component the way dating apps such as hinge (that recommend friends of friends to mitigate the creep factor) have, it will completely undermine the need to the existing model of finding babysitters and other caregivers. The main risk to their business model is likely the willingness to “go offline” once a family has an established (group of) caregiver(s) and bypass care.com’s main source of value capture.