In 2018, Joan Nguyen and Chriselle Lim had an idea.

Lim was pregnant with her second daughter and Nguyen was juggling work while managing two kids younger than two years old. Together, the two decided to open a co-working space that had on-site child care, called Bumo.

The pair traipsed up and down Sandhill Road to raise money for their brick-and-mortar space around the same time prolific co-working startup WeWork Inc. prepared to go public with an S-1 form that revealed a litany of dubious business dealings, which placed WeWork and property tech companies with similar business models under increased scrutiny from investors. After nearly 200 rejections from potential investors, Nguyen and Lim cobbled together a modest seed round to finally open Bumo at locations like Westfield Century City in March 2020, amid the start of the Covid-19 pandemic.

You can guess what happened next. Child care facilities all over the U.S. shuttered, and Bumo pivoted twice amid the fallout of the pandemic before becoming a bookable child care marketplace startup.

In early July, the company announced that it raised $10 million in seed funding, which was led by Offline Ventures and True Ventures. Additional participation came from the likes of actress Jamie Chung and model Rachel Barnes.

“You could book a dog sitter or a dog walker, you could get a car from Uber, you can order food or groceries,” Nguyen said. “Why has something with such an incredible (total addressable market) not been unlocked yet?”

A glaring issue

The U.S. has long dealt with a crumbling a child care system partly due to low wages, labor burnout and a shortage of child care options for working parents. The Covid-19 pandemic exposed how deep the problem was and even made it worse, as the lack of child care forced many women to leave the labor force in droves. By 2021, women made up the smallest percentage of the workforce since 1988, according to the National Women’s Law Center.

The consequences are clear: fewer women in the workforce and a lower retention rate of workers who may become parents. “This model really sucks,” Nguyen said. “In a day care model and a preschool model, you have your tuition and you have what you pay your teachers—your overhead. To pay teachers more, you have to charge parents more and they get upset. So where do you find your healthy margins?”

Several startups have pointed to the lack of flexibility within current child care models. Parents often have to pay a fixed tuition to send their child to day care for standardized hours. But parents who work unconventional hours, or who don’t need child care for a few days at a time are locked into the fee. This became salient during the Palisades and Eaton fires that plagued Los Angeles in early January that displaced more than 150,000 residents – first responders needed last-minute child care in order to contain the natural disasters.

Bumo’s childcare marketplace is meant to allow caregivers to instantly search, book and pay for child care experiences that align with their schedules. The platform offers a slew of options from horseback riding camp to coding classes to traditional daycares for different age groups in nearby neighborhoods that can be booked by the day.

“There’s this absenteeism that is almost guaranteed in a day care and preschool setting. We could put these slots online and make them instantly bookable, and charge a little bit of a premium,” Nguyen said. “I could empower the 300,000 day cares and preschools in the country to do the same thing and earn more revenue and increase their top line without having to build more walls or hire more teachers.”

A growing sector

Bumo isn’t the only company using technology to update child care and make it more flexible. Playa Vista-based Brella Space Corp. has raised around $16 million to develop an on-demand, day-of child care scheduling platform and opening several brick-and-mortar locations in the Los Angeles area. Marina del Rey-based Upwards Care Inc. has raised around $43 million to create a tech-enabled child care search platform. A quarter of all U.S.-based child care venture funding in 2024. happened in Los Angeles, according to PitchBook.

Bumo works with licensed child care locations that are vetted through public licensing data and online reviews. The company is in about 200 cities, with plans to grow and expand into business-to-business offerings. For now, it remains consumer focused.

Upwards follows a similar trajectory as Bumo. The child care company was once a business-to-consumer startup before pivoting and changing its model to incorporate more with workforce benefit programs. The company announced in March it added Pico Rivera to its list of city partnerships, allowing day cares and preschools in the area to access its technology and make child care more flexible for parents.

“When we work with a city like Pico Rivera, we’re looking to help with workforce development,” said Upwards CEO Jessica Chang. “How we think about the workforce is two parts: One is actually the child care providers themselves, having a workforce and supporting them and making sure they stay in the industry and can continue to stay in the industry. But also when we’re supporting our child care providers, we’re also helping them expand their capacity, which means more spots and more affordable spots that are available to other families.”