Toddlers 2.0: Toronto’s HiMama raises $ 70 million to bring software to day care

The federal government has entered into agreements with several provinces to expand day care to $ 10 per day. day nationally.DARRYL DYCK / The Canadian Press

Canada has produced a number of startups that sell online software to small and medium-sized businesses to help run their businesses. Online merchants have Shopify; restaurants, bike shops and golf courses use Lightspeed; and Clio is popular with lawyers. Doctors use Jane; Landscaping companies and painters have Jobs.

As these Canadian vendors have replaced pen, paper, rudimentary spreadsheets, or age-old desktop applications with time-saving mobile platforms, they have expanded rapidly, raised money, and in many cases achieved multi-billion dollar valuations.

Now a Toronto company is hoping to do the same for another technologically overlooked niche in the small and medium business world: day care. On Thursday, Hi Mama Inc., branded as HiMama, announced that they have raised $ 70 million, led by Bain Capital’s Double Impact Fund, to boost its North American growth. The financing, most of which will go to the company with the balance for early shareholders, was also supported by Round 13 Capital and Business Development Bank of Canada, which previously invested a total of $ 12 million in HiMama.

“We love companies that bring digital solutions to older industries, and childcare is a great example of that,” said Brahm Klar, a partner with Round 13.

It is also “a large growing industry” that is getting a boost from government efforts to help women return to the workforce after leaving in droves during the pandemic, he said.

In Canada, the federal government has agreed with several provinces to expand day care to $ 10 a day nationally, while U.S. President Joe Biden’s “Build Back Better” spending plan would increase funding for early education and child care. Although Ontario has not entered into a day care agreement with Ottawa, the province recently allowed electronic registration of day care workers, which has expanded HiMama’s market opportunities.

“It’s a critical time for space, and much of the extra funding in Canada and potentially the United States is a really important part of it,” said Iain Ware, CEO of Bain. HiMama “is about making day care life easier, it’s about creating tools and resources for teachers and creating those touch points and feedback loops back for the parents so they can stay deeply involved.”

The eight-year-old company’s core offering is a mobile app that allows daycare workers to share photos and daily activity updates of children in their custody with their parents. They use the software to track children’s presence and developmental abilities and progress, manage staff, schedule programs, bill and process parental payments, and automatically generate tax receipts, reducing paperwork to pixels.

The company says it has more than 6,800 child care center clients in Canada and the United States who pay $ 1,000 to $ 2,000 per year. facility they operate annually. More than one million parents have used the app. Revenue runs from $ 15 million to $ 20 million annually, an increase of 400 percent over the past three years.

HiMama has two rivals – private-equity-backed senior software provider Procare and startup Brightwheel – and a potential market estimated at more than a million daycare activities in North America.

HiMama also has a lot of fans, which “was really important to us and came through in some of our conversations with operators,” said Mr. Ware.

“We often get inquiries from new and future families who mention HiMama in some way,” added Ryan Eickmeier, owner and CEO of the Helping Hands Daycare chain east of Toronto. “It is actually one of the first points of contact we have with the parents now when they ask. We like it a lot on our website because it makes a difference for parents. “

He added that the use of HiMama saves its staff several hours per week at each of Pickering, Ont. – based company’s nine centers.

Like other “vertical” small business subscription software providers, HiMama, which has 140 employees, has recently made a big push in payments, which holds the promise of a revenue boost.

Less than 10 percent of HiMama’s customers use their payment processing offerings now, and that should increase to more than 50 percent, HiMama’s CEO Ron Spreeuwenberg said in an interview. “We will really start upscaling payments,” and also investing in product development, operations and customer onboarding with the new financing, he said.

“There was an old saying that the only two things you still pay for with checks were your rent and daycare,” Mr Klar said at the 13th round. payments in the industry over the last few years. “

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