Another $10.2 million has gone from the coffers of venture capital funds into the hands of a ride-hailing company.
This time, the recipient is a Los Angeles-based upstart called HopSkipDrive, billed as "Uber for unaccompanied minors." The round was led by New York City-based Firstmark Capital, along with Greycroft Partners and Pritzker Group Venture Capital. The scrappy company already had raised $3.9 million last year to fund expansion outside of L.A., a mere few months after its March launch.
HopSkipDrive founders Carolyn Yashari Becher, Joanna McFarland, and Janelle McGlothlin were all industry newcomers, as well as mothers, with eight children between them. The three had a common logistical problem on their hands: They needed a way to shuttle all those active kids around to after-school activities like karate and violin and skateboarding lessons.
It didn't make financial sense to employ a full-time nanny simply to be a driver for 20 minutes a day. So they built their own app-based ride-hailing service, with all the necessary safety and security infrastructure, and drivers who will check kids out of school and make sure they get where they're going both safely and on time.
HopSkipDrive is not the only company working in this market segment, targeting busy working parents as customers on behalf of their little ones. Already, San Francisco has its own version of "Uber for kids." It's called Shuddle, and it raised $9.6 million last May, in a round of VC funding led by RRE Ventures.
The Los Angeles Times reports that HopSkipDrive has around 500 drivers, but finding trustworthy ones is a significant pain point for this segment of the market. According to the Times: "Every driver must have experience caring for children and needs to pass rigorous background checks, including in HopSkipDrive's case a fingerprint check. All drivers are vetted in person. For Shuddle, some are vetted over the phone." There's already been some controversy over which California laws these services must comply with. And it's guaranteed there will be more, as they expand to different municipalities and different states.
Finding a niche
To be sure, HopSkipDrive is operating in a niche sector. In fact, the startup found its most significant investor mainly because he empathized with the problem the founders were trying to solve. "I have three kids aged 1, 5, and 11, and the movement of children around is a huge issue in our lives," Firstmark Capital's Rick Heitzmann, who was an angel investor in HopSkipDrive before his firm became involved, told the Times. "Whether it's soccer or ballet or school, all of that is a big issue, so it was a pain I'd felt personally."
Going forward, it's likely that more niches within the ride-hailing sector will continue to pop up. Fortunately for HopSkipDrive, it appears to have found one that Uber, the 800-pound gorilla of the industry, doesn't think is worth covering.
What's funny, though, is that this is a niche that emerged as a result of parents using Uber to shuttle their kids. Back when I was reporting on a feature on Uber a couple of years ago, multiple sources told me they'd done this, especially in Los Angeles. (Now neither Uber nor Lyft is allowed to offer rides to minors; each has terms of service that require customers to be older than 18.)
Again, it's probably not worthwhile for Uber itself to tackle this difficult segment of the market, or the similar segment for helping out and driving the elderly. What about pet transport? Or a subscription service, similar to what HopSkipDrive offers, but for regular riders?
There are numerous possibilities for this sort of segment-targeting, making it a likely addition to the ecosystem over the next few years. The companies that spring up will be logical targets for venture-capital investors too, as they might just start to look like natural acquisition targets for the big dogs, Uber and Lyft.