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Innovating childcare: Rachel Carrell offers a new model with Koru Kids
February 06, 2018

Frustrated by the lack of reliable and affordable childcare in London, Rachel created her own nanny-sharing service. 

This is the thirty-first in our 'Focus on Founders' series of articles about alumni entrepreneurs.

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Rachel Carrell (XIA, XNZ, NYO, LON, LOX 02-12), founder of London-based Koru Kids, experienced first-hand the difficulty of finding a good childcare option in that city: “it’s hard to arrange, incredibly expensive, and many common options just don't work,” she says.

Rather than waiting around for a new option to present itself, Rachel came up with one herself: Koru Kids, a nanny-share service, which has been described as the ‘Airbnb’ of childcare. 

Koru Kids offers two primary services: a nanny share for babies and toddlers, and an after-school service for older children. In the program, multiple families share a nanny, cutting down costs and giving children playmates (and social development). Uniquely, the company also takes care of all the back-office details such as payroll, payment, and insurance organization – surely a boon to overloaded parents.

The benefits of the service also extend to nannies, who make an average of 25% more in the sharing arrangement.

We sat down with Rachel to talk more about her business, how fellow alumni have been helpful, and what she sees in her future.

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You’ve said that providing a comprehensive service – both helping families find a nanny and then taking care of all of the back-end details – was of paramount importance to you. Why is that?

There are lots of payroll services out there, and there are places to help you find a nanny. But there's nowhere else that does all of it, end to end. We recruit the nannies ourselves, vet them and train them, then match them with families.

One of the things I noticed from observing my friends and the market, generally, was that parents – and 95% of the time it’s the mum – were expected to be the glue holding together all the disparate services that existed out there in the market. And this is at a time when people are probably the most busy, stressed, and exhausted they're ever going to be in their entire lives. So it was really important to me for Koru Kids to absorb the difficulty and the complexity, instead of the parents. 

You've said that the inspiration for Koru Kids came from your own struggles to find steady and affordable childcare in London. What sets the nanny-share model apart?

The inspiration came equally from my own experiences and from speaking to lots of friends who were also having issues. Everyone's childcare situations seemed to be fragile – many friends felt like they were constantly one phone call away from disaster.

One of the reasons that I really love nanny share is because my daughter gets to spend time with other kids. She has gotten so much out of that. There's a lot of evidence that spending time with other children is really great for kids. It's good for several different aspects of their development, notably linguistic and cognitive.

I've spoken to a lot of parents pre- and post-nanny share. Before they try the service, the kind of things they're talking about and focusing on are financial, legal and logistical: What time will the pickups happen, what time are drop-offs, how much am I going to save? But after they’ve used it for a while, when we ask what the benefits have been, they might mention the cost, but it is never the main thing they talk about. They talk about the bond between the kids, how much the kids are learning from each other, how great the nanny is. They talk about how much more rewarding it is. It's really been an amazing thing.

You also have a service for older children.

Yes, we have a service that is specifically for after school. We do all the back-office work for that service, as well. We’re creating a community of afterschool nannies, which I'm really excited about.

Where does the name “Koru Kids” come from?

Koru is a Maori word from New Zealand, where I’m from. The word refers to the shape of the fern as it grows – it sort of curls over and unfurls. I really like the visual of the kids “unfurling” like fern fronds in front of us as they grow and develop. The word can also mean “circle” or “loop” – so it references the “loop” of care around our clients. Also, my daughter's middle name is Fern, so it all seemed to make sense.

Do you have plans to expand the model to other cities in the U.K. or even to other cities internationally?

That's definitely on the agenda. Lots of people have asked us to take it into other cities. We've got more than enough to chew on at the moment in London, and I'm a firm believer in really owning one territory before you dilute your attention. So it's not a short-term plan – but it might be a medium- or long-term plan.

What’s the biggest business challenge that you face?

It's probably the same as any other startup that has taken on something new: Can we do all the things we want to do with the resources we've got? I think we're working on the right things. But can we do it fast enough? Can we do it well enough? These are the unknowable questions that are at the heart of every startup.

When you're hiring, which are the skills and the traits that you look for above all else?

I look for intelligence, humility and drive. If you've got those three things, then you're good, no matter what. But if you’re missing one of those three things, then it's not going to work. 

How you have found the alumni network to be helpful?

You can get a lot of psychological support from other McKinsey people who have gone on to found businesses. There are a lot of us around who have a level of trust with each other. There are many alumni in London I'll call and meet up for a coffee or a late-night chat. Quite often, it's for a specific business issue, but sometimes, it's just for general emotional support. That has been brilliant. 

Also, when it came for me to raise my round, I asked several other entrepreneurs to introduce me to their investors, which they duly did. A lot of those investors then became my investors.

Where do you see yourself in five years, and when you look back at the end of your career, what would you like to see?

In five years, I'll probably still be running Koru Kids. By then, it will hopefully be bigger and better, and on the road to being the world's best childcare service. At the end of my career, I would like to see that I gave it my all while still having a great family life. That's the balance that I'm trying to go for.

What’s your ultimate goal?

I want us to be the world's best childcare service. Childcare is something which is so poorly served. It's a lofty goal but it also feels quite doable, when you look at what other options are out there.
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