“Parents are increasingly asking: ‘If I am at work, where and how is my child spending this precious time?’”
With more and more parents in Latin America entering the workforce, the demand for safe, high-quality childcare solutions is growing. What are the opportunities and challenges for startups? What does it take to develop innovative models that can serve the needs of businesses seeking to provide childcare options to their employees? Luis Garza, a young entrepreneur from Mexico, built an EdTech app for parents of young children and he’s also chairman of a day-care chain in Colombia and Mexico. In this interview, he discusses the early childhood development market in Latin America and where he thinks it’s heading.
Where are the fastest-growing early childhood education markets in Latin America?
It’s an interesting question because this is a very informal market in many ways. The formal market is growing, in line with the entry of more women in the workplace, but still there are a lot of children under informal settings of care. That means that the market is much bigger than it may look, given the informality and family care settings. To answer your question, it can be useful to identify those markets where family-friendly practices are taking hold and where there are more dual-income earners in the family. And there I would say it’s Brazil, Colombia, Mexico, and Peru. Chile has the most mature and sophisticated market but it’s not growing as fast as the markets in those other countries, where there are more concerted efforts from the government to support provision of early childhood care services by the private and public sectors. These efforts are boosting awareness and leading to government policies that support early childhood care.
What are the main drivers of the growth of innovative solutions to childcare, such as that provided by your firm Advenio?
As many more young people enter the workplace, there is a need for childcare solutions in different forms, both traditional childcare and more innovative family care settings. Innovation goes hand in hand with company interventions to subsidize and make childcare more affordable, as well as government incentives like tax rebates for investors and families. In Latin America, formal childcare services are still relatively novel. This creates the need and opportunity for innovative models. What Advenio is doing is offering solutions for companies that want to provide high quality childcare for their employees.
What distinguishes childcare models in Latin America from models in developed countries?
A very important factor is affordability. In Latin America, price points are in a healthier place than in the United States. In the U.S. the cost for a high-quality private provider can run into thousands of dollars per month. In Mexico, the highest quality childcare provider doesn’t surpass four hundred dollars a month. However, early childhood teachers are a globally underpaid workforce. Another difference is that Latin American markets are leapfrogging incumbents in established markets in the use new technologies. Technology can be especially useful to smaller daycare centers, with 10 or 15 children, in helping them run the center—for example, simplifying management, lesson planning, and coaching the educator. Technology also helps parents in their roles as the first teachers of children, which has the potential to dramatically change school readiness.
How have cultural attitudes in this area changed? Are parents more open to leaving their kids in childcare facilities?
The attitudes have definitely changed in the past ten years. I attribute this to two things. First, there’s been a concerted effort from organizations like the World Bank, UNICEF, and foundations like LEGO and FEMSA to stress the crucial importance of 0-3 years in a child’s development and so there is greater awareness in Latin America of this. Parents are increasingly asking: ‘If I am at work, where and how is my child spending this precious time?’ The other thing is that startup companies like Advenio, who are focused on providing quality care settings, have emerged, whereas before, especially for children 0-18 months, this was an area where families were more dependent on grandparents or neighbors. Parents can see that there are now viable, quality options for their educare solutions.
Why would parents use an app like Kinedu to teach their children?
Parents want to know what will help their children’s development and the tool we developed in Kinedu helps parents to be the first educators for their babies, even without being trained in early childhood education. We provide simple insights into how their baby is developing. We are able, through our data and technology, to recommend the best activities for their kids at the right time. Kinedu is essentially a tool for the parent, drawing on the best data and analysis we have collected to curate a great experience.
What potential do you see for working with governments and employers in this space?
Advenio’s business model is corporate-subsidized so we work with more than 100 companies in Mexico. Kinedu is running a couple of pilots with governments with municipalities in Monterrey to provide a toolkit for parents and teachers, with a focus on lower-income families, where we measure both the outcomes for children and parental attitudes. These partnerships are critical for us. Investing in early childhood has returns for all society. While the most important actor is the family, it is not only them as end users that benefit from investments in this space, it’s also the citizens and society stakeholders who reap the benefits of a more talented workforce and a more stable foundation for learning.
What will this market look like a decade from now?
I think there is going to be a drive toward formalization of the sector. There will also be a big push toward technological innovations across Latin America. And there will be much more awareness and solidarity from parents, educators, governments, and companies, all working together to provide quality childcare solutions. We are going to see an industry that works as a team in more ways than in other industries.
This interview has been edited for clarity and conciseness.
Published in March 2020
Luis is the founder and CEO of Kinedu, a startup that unleashes early childhood development at scale by fostering quality learning experiences at home, at school and everywhere in between. Kinedu’s technologies provide relevant stakeholders with the tools and knowledge needed to foster early childhood learning and serve as platforms to improve interactions in the most significant dimension in the first few years of life: early childhood development; they serve over 500,000 parents and educators worldwide. Luis co-founded Advenio, a leading Corporate Daycare Chain in Latin America providing services to families in partnerships across the region with multinational and local companies. Luis also serves as president of the Aceleradora de Innovación para la Primera Infancia, an incubator for promising ideas to improve the outcomes of children based in Monterrey, and part of Frontiers of Innovation. Luis graduated from Stanford University in 2006, received his MBA from Harvard Business School in 2010, and currently lives in Monterrey, Mexico, with his wife, Paulina, and their three daughters, Paulina, Balbina, and Sofia.