Markets by Grant | FamTech

11 min readFeb 22, 2022

Hello and welcome to Markets by Grant. Today’s piece is part two of a three-parter on startups’ journey into consumers’ private lives. My high level thesis here is that the private life is the underpenetrated frontier of consumer tech growth, and that because of deeply held associations of meaning and fulfillment, FamilyTech and FaithTech are two especially promising verticals within this space (I do a better job of explaining myself in my last piece).

Today’s market? Family Tech–lovingly abbreviated as FamTech henceforth. Let’s dive in.

Defining the Market

What is the consumer FamTech market? Well, it’s not exactly a discrete market. It’s a vertical rebranding and reorganization of certain parts of HealthTech, EdTech, FinTech, and Social (…Tech).

It’s a useful denominator, though, because it structures itself around the customer’s purchase and user personae:

In FamTech, the customer/buyer and the beneficiary/end user are never the same people, but are always in the same family–and the buyer always purchases this product within the context of their family role persona.

Put another way, FamTech products and services are purchased by one member of the family (usually a parent) for the use by or benefit of another member of the family (usually a child), or the family as a whole.

Even a mother purchasing a motherhood app, which only she will use and internalize, is covered under this definition–because the contextual persona with which she made this purchase is “parent”, and because its benefits don’t accrue primarily to her as a consumer, but to the family as a whole.

Using the artful wizardry that is MS PowerPoint icons, I have created a few helpful comics to illustrate my market definition:

Before I move on to the juicy stuff, I’ll quickly highlight that there have been many names thrown around in this space which may seem redundant–ie: BabyTech, ParentTech, ChildTech.

And there are other vertical markets whose boundaries with FamTech may seem uncertain–namely, FemTech and AgeTech.

And, of course, there’s that giant, nebulous wrapper term: The Care Economy. Here’s my visual take on how these spaces are related:

Long story less long…

Once FemTech starts to focus in on family planning, it also applies to FamTech. More specifically, there’s a point when FemTech pivots its focus from self to baby (ie: starting at fertility → conception → pregnancy → birth → postpartum). Starting at the beginning of this journey, the buyer is using products and services as an expectant mother, not just as a sexual health-focused woman.
Aging-related care that is coordinated by or with other family members also applies to FamTech.
Babies/children and parenting all fall squarely within FamTech, and overlap somewhat with conception and family planning-related aspects of fertility tech.
Family tech also applies to relationships between siblings and couples–not just parent-child relationships (although I’ll largely focus on the parent-child dynamic in this piece).
Finally, the giant cloud that is The Care Economy encapsulates self-care, childcare, eldercare, community, and home–so it’s much bigger than what I’m talking about in this piece.

As you might imagine, this is a lead-in for how I’ve structured my market map–but before we dive into that, let’s understand the macro-level a bit better:

The Thesis

Part of the reason why this space is so unintuitively defined is the lack of attention it has historically received. In my opinion, it hasn’t been paid its due. Why?

Classic old-school VC gender biases. FamTech, an everyday, seemingly domestic space where customers skew female–was tough to find exciting or lucrative for the VCs of yesterday.
As I mentioned in my previous piece, I believe there’s been a subconscious discomfort with allowing tech to penetrate so directly into our family lives. Sure, we’re happy to watch Netflix as a family or book a family vacation on Airbnb, but we’re less likely to feel comfortable downloading an app which helps us manage our family relationships. Why? Probably because family, like faith, is one of the longstanding human institutions that we feel are better left in their ‘essential’ forms. The values surrounding family are some of our most core, closely held beliefs. Startups have to tread lightly to reach the consumer amidst this emotional minefield.

So what’s been missing? Yes, these startups are traditionally overlooked and operating in delicate, closely-held parts of our lives…but I’m arguing that this is a promising space. Why?

Because FamTech touches universally essential and meaningful parts of our lives, and therefore generates massive willingness-to-pay.

Would you pay more for a connected monitoring device for yourself or for your newborn? Would you pay more for comfortable office space or for safe daycare for your child? How about emergency healthcare? Learning and development? Community and social activities?

Once you become a parent, your purchases cease to be purely consumeristic and take on a special purpose and meaning. And this infusion of values with your new consumer persona translates to additional dollar value for startups operating in this space.

The Big Numbers

Like I said, we’re early to the popularization of FamTech as a market categorization–so there’s not solid, consensus-approved data on it yet. Most of the folks who’ve written about the space haven’t dared try to calculate the market size, besides hinting at how big it may be based on anecdotal evidence of startups being funded, babies being born, and people talking about how the space may be poised for growth.

Spoiler: I’m not going to properly size the market either (my management consulting days are over) — but your boy did manage to scrounge up some nuggets. Here’s my triangulation of rough market size (US only), extrapolated based on all the data I could find (noted in appendix):

In summary, my market sizing exercise, based on rolling up and trimming down related verticals, brings us at at market size of ~$180B with an average CAGR of ~7%. This is my point of view on the FamTech market, but by no means definitive.

If we blur our eyes and look at the big numbers only, we get the takeaways. It’s big and it’s growing, despite overall shrinking childbirth rates, and perhaps partially driven by our aging population. As this tech market is in its infancy (at least, of being measured), I didn’t dare extrapolate the US numbers above globally. Let’s just say the global market is much bigger, and leave it at that (feel free to quote me on that great insight).

VC Activity:

Lastly, a validating signal of market promise (depending on who you ask), is the investment capital flowing into the space. VCs are pivoting their investment theses to focus on family life and the care economy, and new VCs and incubators are springing up to focus on FamTech exclusively.

Of particular note, Melinda Gates is building an empire around the space, with Pivotal Ventures, the Holding Co, and now with Magnify Ventures, for which she’s the largest LP (check out this page for an intuitive visual breakdown of The Care Economy).

Take a look at the fundraising data:

Takeaways?

We’re on the cusp of something big. 2021 dollars for ParentTech and AgeTech both exceeded their previous four years combined.

More takeaways?

With the exception of FemTech, the number of deals hasn’t increased proportionally with dollars. To me, this signals that:

Successful early-movers in the space are commanding increasingly large rounds of capital (ie: they’re doing well and are onto something).
The new flood of capital hasn’t yet attracted a flood of new entrants (ie: we’re early to the game).

Final takeaway?

We’ve got a promising market on our hands.

The Landscape

Now, finally, on to the fun stuff: the players.

A few disclaimers on the market map I’m about to hit you with:

It’s not even close to comprehensive of all the players in the space. Instead, it’s illustrative of how I conceptualize the structure of the market.
As you move left-to-right, you move along the customer’s lifecycle, starting from aspiring parent, to parent, to caregiver of aging parents. The vertical categories underneath pertain to tech that serves a customer during that particular stage of family life. You’ll see that I’ve further categorized these by type of solution.
As you move down, the horizontals depict tech categories that are applicable to a FamTech buyer at any given point in her/his lifecycle.
Finally, do not consume this market map if you’re pregnant or while operating heavy machinery.

Now that your eyes have adjusted, I’ll do a little editorializing on each of these segments:

Grant’s Take: The Verticals

Family Planning

This is a huge space, and I’ve barely scratched the surface here. Recall from the analysis above that this space has seen the most new entrants in recent years. The HealthTech angle, in particular, is starting to become fairly saturated and well-served.
In this space, I’m most interested in products which help you prepare for parenthood or family life. EarlyBird is an interesting example, focused on family savings planning. Leleki is an evidence-backed shopping list and marketplace for everything you need to buy to prepare for childbirth and beyond. Tinyhood, while theoretically applicable at any stage, is also compelling here–as a repository of parenting ‘how-to’ content.

Child Care

The way I structure it, child care is split between day care and night care. The day care space consists of child care centers and baby/child care apps for at-home care. Night care takes place at home, and includes next-gen baby monitors, sleep trackers, etc. The night care space is largely a connected hardware play–arguably essential products which are increasingly becoming regulated (see: Owlet’s recent battle with the FDA).
Day care is an incredibly fragmented, long-tail market. Most childcare providers are small, <5-person shops. Hence the surge of marketplaces helping connect parents with childcare providers, and more recently, the infrastructure play enabling these SMBs to operate their own childcare businesses. The SMB-enablement infrastructure play is, perhaps unsurprisingly, my favorite strategy in this market. If I were to pick a winner in the marketplace space, it would be Kinside, which takes the model a step further by integrating with real-time availabilities within childcare centers (rather than just directing parents to providers in their area).
I haven’t seen many players trying to open childcare centers of the future at scale. It’s capital-intensive, not scalable, and swimming upstream to the virtualization and localization trends from Covid. Still, it would be interesting to see how the business model might be modernized.
A previously hot, now largely disappearing play in this market is community/network-driven childcare, or “child-sharing”, where trusted groups of parents share childcare duties among themselves (see: Komae). This sounds compelling in theory, but in practice, my take is that the trust barriers are too high, and that a product doesn’t really need to exist to make this possible.

Child Health (Pediatrics)

In many ways, this space is the opposite of childcare. Where childcare is full of platforms and infrastructure plays, pediatrics has few. Where childcare has few service providers at scale, pediatrics is full of them. This is in line with overall consumer health trends, moving from “find a doctor” marketplaces toward online practices with growing brick-and-mortar presences. The hyper-verticalization strategy here is compelling: focused on building communities of care around specific diagnoses or cases, like autism (Elemy), emotional health (Little Otter), or emergency medicine (Brave Care).

Child Development

Note that I’ve tried my best to keep this separate from school/formal education-related EdTech. In this category, we’ve got “find a child development activity” marketplaces, child development subscription boxes, financial literacy apps, tele-play platforms, and much more.
The hottest business model here (in terms of attracting VC capital) is the kids’ financial/investing literacy app, a clear downstream evolution from the hot consumer investing and crypto spaces. Of the vertical categories on my market map, this is the most fad-driven, ‘consumer-y’ space–and my hot take is that ‘investing for kids’ is more an extension of timely topics of adult life today than a product which meets a need.

Elder Care

As you may recall, this space is the fastest-growing by far. In some ways, the tech solutions popping up here have mirrored those in childcare. In fact, you’ll see that many startups initially focused on childcare have expanded into eldercare as well–especially the caregiver marketplaces. The challenge with the marketplaces, though, is a supply shortage on the care provider side. Again, I think the caregiver infrastructure play here is the most compelling–see: caregiver enablement startups like IanaCare.

Grant’s Take: The Horizontals

Dedicated Support

As we’ve seen in some other markets, this is the play that answers the parent’s call: “I feel so overwhelmed with my to-do’s–I just wish I had some help.” Quite directly responding to this lament, startups in this space assign individual human ‘helpers’/’coordinators’ to help families coordinate their health, development, and household life.

Community + Resources

These are the content companies, the forums, the advice communities, etc. They largely monetize with ads, sponsored content, and events. Not a completely novel model, but certainly a tried-and-true one.

Coordination + Communication

I’ve saved my favorite category in this market map for last. We’ve got productivity, communication, and collaboration tools for our work lives–why not our family lives? Where’s my custom-built product which fuses the family calendar hanging on the kitchen wall, with the family group chat, with the grocery list, with the chores list, with the location tracker, with the family contacts list, with the spend tracker? Where’s the family operating system?

I’ve done the most research in this space, and I feel that Milo, Hearth Display, and Onward each have compelling plays:

Milo is building the smart, AI-enabled family operating system which parses all of your inbound communications, roles & responsibilities, to-do’s, and random thoughts/ideas into a shared family calendar, task manager, and whiteboard–all accessible on any device. It’s the most tech-enabled play I’ve seen in the space.
Hearth Display is building a shared family calendar and task list, similarly accessible on any device, but anchored and unified by a physical touchscreen display which hangs on the family’s kitchen wall–aligning with the physical operating rhythms of the household.
Onward is building the financial management and operating system for co-parents, enabling divorced or separated parents to track and manage shared expenses, reduce friction in communication and plan for their children’s future.

Before wrapping up–some words of thanks to the founders and VCs who helped me think through this space.

Thanks to…

Avni Patel Thompson of Milo
Ania Levina of Leleki
Shadiah Sigala of Kinside
Jacklyn Rome of Onward
Emma Silverman of TMV

…for your feedback and insights.

And thanks to you for sticking with ol’ Grant. Next up: FaithTech. Get ready.

Questions/feedback/ideas? HMU at grant.demeter@av.vc