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Online marketplace helps millions find family care

Care.com founder Sheila Marcelo believes that connecting families and caregivers in a reliable and easy-to-use way can improve lives—and the economy.

Sheila Marcelo, founder and CEO of Care.com. Over the past five years, the online marketplace has grown from 500,000 to 9.7 million members worldwide.
Pat Greenhouse | The Boston Globe | Getty Images
Sheila Marcelo, founder and CEO of Care.com. Over the past five years, the online marketplace has grown from 500,000 to 9.7 million members worldwide.

The search for good, reliable child care, as any working parent will tell you, nearly always requires diligent research, word-of-mouth referrals and just plain luck.

Sheila Marcelo believed that technology could improve the experience, so in 2006 she started Care.com. The company is an online marketplace for finding and managing family care, including care for children, aging parents and pets, as well as housekeeping services. Over the past five years, Care.com has grown from 500,000 members to 9.7 million members worldwide: 5.2 million families and 4.5 million caregivers.

For fiscal year 2013 the company generated revenue of $81.5 million, a 68 percent increase over the year before. And in January it raised $91 million in an initial public offering. Much of that money, said Marcelo, will be used to fund expansion into international markets, mergers and acquisitions, and building awareness of the company's services.

Similar to the experience of many entrepreneurs, the idea for Care.com was born from Marcelo's personal life. In the early 2000s, while working at Upromise, an online network that allows families to save for college, she needed to find care for her infant son and ailing father. The dilemma was especially acute, since Marcelo's parents were helping to care for her son. "Here I was, working at a technology company, but I was using the yellow pages to find care for my dad," she explained. "I knew there had to be a better way."

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After Upromise, Marcelo joined TheLadders.com, the online job-matching site. It was during this time that Marcelo says the marketplace concept really began to come into focus. "Ten, fifteen years ago consumer behavior was such that no one thought you could look online to hire someone or to find a date," she said. "But then Monster.com started, and all the dating sites started. There's been a fundamental shift in how we deal with technology, and that shift is creating the acceptance among consumers that even this intimate part of life—finding care for your family—can be done online."

With $3.5 million in funding from venture capital firm Matrix Partners, Marcelo was able to get Care.com off the ground. Over the next seven years she and her team—including the marketing, operations and technology experts she recruited from Upromise—were able to raise $111 million in private funding before taking the company public.

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"There's been a fundamental shift in how we deal with technology, and that shift is creating the acceptance among consumers that even this intimate part of life—finding care for your family—can be done online." -Sheila Marcelo, founder and CEO of Care.com

The market Care.com is going after is huge and fragmented. According to data compiled by market research firm IBISWorld, Americans spend about $243 billion a year on day care, in-home care, housekeepers, nursing-care facilities, pet care and tutoring but use wildly different methods and sources to locate precisely the kind of care they need. Care.com's mission, said Marcelo, is to enable consumers to address all those needs under one roof.

For a subscription fee starting at around $37 for one month, parents can access Care.com's extensive database of caregivers. Enter the type of arrangement you're looking for—a full-time nanny for a newborn, a babysitter to pick up kids after school, a retired nurse to drive an aging parent to medical appointments—and Care.com will provide a list of suitable candidates, along with a preliminary background check on each one. Caregivers can post their availability and respond to jobs at no cost. According to the company, 4 out of 5 families that sign up for its service are successful in finding the kind of care they need.

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"Research has shown that a key reason for absenteeism and productivity challenges is care," Marcelo said. "Even the companies that were the first to offer onsite child-care centers years ago are now realizing that an increasingly remote workforce needs different care options." The company is also expanding its payment offerings. Families now have the option of making electronic payments to caregivers from a computer or mobile device. Care.com's HomePay offering goes a step further by charging a fee to manage the payroll taxes for families that employ a nanny or other household worker.

For Marcelo, the real driver of Care.com's future growth is an increasing awareness that care is not a female issue but rather a family issue—and, by extension, a workplace issue. "When we were first raising money for Care.com, the majority of the investors we spoke with were men," Marcelo recalled. "They would say, 'If my wife hires a nanny, why would I ever come back to Care.com?' They didn't understand that nannies quit and that you need babysitters and housekeepers to run a household. Lots of pieces have to fall into place in order for it to run smoothly."

That's changing, Marcelo said, as younger men are becoming more involved with the search for care for their families. And ultimately, that's not only good news for women but the economy overall, she believes. "The International Council on Women's Business Leadership says that one of the key barriers to female leadership is care, and that's across many countries," Marcelo explained. "Care is fundamental to women's participation in the workforce and to economic growth."

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