Trend Dive: The Emergence of FamTech
A lot has changed. Place your bets on FamTech: The Mom Project, Nara Organics and Kinside
As a mother of three children, what is top of mind for me this Mother’s Day is how we’ve failed working moms. For better or worse, I have spent a lot more time with my kids and husband in the past year, as many women have. Millions of women left the workforce last year primarily to take care of their children, and for the first time, many dads are getting a front-row seat to the depth of multitasking that working moms do on a daily basis.
There has always been unacknowledged work to be done in the home, but now there is more work than ever. In fact, parents said they spend 59 hours per week on household chores as opposed to 30 hours before the pandemic, with mothers spending 15 hours more on average than fathers. This is bad for feminism, gender equality and the economy.
However, where there are problems, there is an opportunity for solutions, and last year, the world woke up to FamTech. As we wished for better solutions to keep our households organized, healthy and sane, one couldn’t ignore the massive opportunity.
FamTech is Essential and Makes a Societal Impact
The types of companies taking center stage during the pandemic are ones helping families tackle the work in the home. One of our portfolio companies, Instacart, has become essential as reflected in its valuation. Productivity and collaboration tools are irreplaceable for work, school and even happy hours. Meal kits save working parents’ precious time and waistlines. Companies offering granny units have allowed grandparents and young adults to move back in with their families, and Peloton, Roblox and Netflix are keeping us healthy and entertained.
The increased time that moms and dads are spending with their children and parents also heightens their awareness of their families’ needs. We’ve invested in companies catering to the needs of elderly parents, like Papa for companionship and True Link for financial tools. KINLO and Nara Organics are companies giving parents peace of mind about the products they are using on their kids.
There is so much more innovation and investment opportunity in companies building solutions to help families. Ask any parent whose kids have been distance learning all year. Not coincidentally, early childhood education platforms have seen a massive increase in adoption. But the question remains — if FamTech is such a hot and untapped market, why isn’t there more capital and technology development going towards it?
If we agree that it is women who primarily worry about and tackle the unacknowledged work in the home, then FamTech solutions are most likely going to be more top of mind for women. Unfortunately, not enough women are currently in the decision making seats when it comes to the kinds of companies that are getting funded and built. There are fewer women VCs, fewer women entrepreneurs, and less money funding female founders. However, women are in the decision making seats at home when it comes to making purchasing decisions for themselves and their families every day. Women are forecasted to own 75% of the discretionary spend by 2028, making them the “world’s greatest influencers.”
So the question should be — why aren’t we building and funding companies making products, services and technology solutions for families when at least half the population is looking for them? While the needs and pain points of families are ignored, the VC world misses out on potentially huge investment opportunities, which I always believe lie where others aren’t looking.
Hire Women, Hire Moms
To unlock the true value of FamTech, it’s not enough to invest in FamTech companies. Investors and businesses should also hire more women in positions of leadership if they want to (1) better understand what their customers want and (2) truly be innovative and successful. At Initialized, we value teams and cultures that bring together a wide variety of life experiences, perspectives and specialties for ourselves, in our portfolio and in companies we’re interested in investing in. Forty percent of our portfolio companies have female representation at high levels of the company, with women as founders, in C-suite positions or on their boards. Not to mention, half of our own investing team is women. This is a start. If you want something done, give it to a busy person. So hire women, and hire moms.
There is good news in the overall sense of optimism as more people get vaccinated, families plan travel and offices and schools figure out how to safely reopen. A few FamTech companies in our portfolio will be helping moms and parents who left the workforce get back to their careers: The Mom Project connects professional moms who want more work flexibility with top companies looking for their expertise; Career Karma teaches people about the best online bootcamps, opening up new career opportunities in tech through reskilling; and Kinside lifts the burden of finding quality, affordable childcare off parents, so they can actually work, whether that is back in the office or uninterrupted at home.
The bottom line is that everyone stands to gain from investing in FamTech companies and technologies. Investment and innovation in this space is not only good business, but it also has the ability to make a societal impact, to improve family life and the unfair burden placed on women and moms. Holding back women and moms from their full potential holds back their contributions to society and our economy as well. Mother’s Day gifts are great, but economic opportunity is even better.