Child’s play: The Kiwi owner of London nanny agency Koru Kids and how she raised more than $30m in investor funding

Koru Kids CEO Rachel Carrell, pictured with her newborn son Alexander, struggled to find good childcare in London. Photo / supplied

Eight years ago Kiwi businesswoman Rachel Carrell took a punt, giving up her job as CEO of a major UK healthcare company to start a nanny agency in London.

Now she’s CEO of Koru Kids, a London-based childcare platform with a multi-million-dollar revenue and which, last quarter, grew by more than 30%. Every school day, 3000 children are collected from school by Koru Kids nannies and 40 staff help to run the company. It’s a success story that comes from Carrell, 44, simply spotting a need and deciding to do something about it.

She was juggling a full-on career with parenthood, having given birth to her first child, Naomi, now aged 10. Where, she wondered, could she find well-trained and dependable childcarers? Her friends struggled with the same issue, often having to forgo fulltime work and career advancement as a result.

Rachel Carrell in her Koru Kids office with her daughter Naomi and son Alexander. Photo / Fiona Freund & Motherworks

Invercargill-raised Carrell started off small in 2016, initially finding and training fulltime nannies for babies and toddlers, and advertising their services online. However, she soon realised the real need was after-school care, nannies who were prepared to work part-time. She repeatedly heard from parents who thought that once their children started school, their childcare problems would be over. However, that wasn’t the case.

As a result of freedom-of-information requests, Carrell discovered that one in three London schools did not have after-school care or an organised kids’ club. Surely, she thought, there must be start-ups, investors and groups trying to solve this problem. It turned out there weren’t.

“I was just blown away that no one seemed to be really thinking about reforming childcare from a modern product and tech perspective. And so I decided that I would have to do it myself.”

The problem, as Carrell saw it, was there weren’t enough people prepared to work just a few hours a day, either before or after school. So she set about finding them, initially targeting university students. Using a space given to her by the local council, she started gathering and training ideal candidates. After doing background checks, she’d get to know the students, cooking them lunch and putting them through a training programme including first aid.

Carrell set up an online system through which parents could select an after-school nanny and soon realised demand outstripped supply.

“They just got snapped up so quickly.”

Encouraged by the response she started introducing systems and technology to help expand the service. In 2019 Carrell raised nearly $22 million in venture capital funding to help grow the business, landing some high-profile investors including Gumtree founder Michael Pennington, Rolls-Royce chairman Ian Davis and Akshata Murty, wife of former UK Prime Minister Rishi Sunak. (Murty later donated her Koru Kids shares to charities when she became the Prime Minister’s wife).

Since then Carrell has raised another $11m and hasn’t ruled out expanding the business into another country. Her husband Dave Eston, who works for an investment fund, has helped to raise venture capital.

One of Koru Kids' early investors was Akshata Murty, wife of former British Prime Minister Rishi Sunak, pictured at the coronation of King Charles and Camilla, the Queen Consort, at Westminster Abbey last year. Murty later gave her shares away to charities. Photo / Tony Melville, via AP

Last year 120,000 people applied to be nannies with Koru Kids, of which 10% were accepted for training. Some of the nannies have other careers. One West End actor had to leave her Koru Kids job because she landed a lead role as Nala in The Lion King.

Another is a sculptor, working in her studio in the mornings and as a nanny in the afternoons. Another won a book award for a novel he wrote, telling Carrell that he played football and made sandwiches (with the children) while he was writing his book.

A young entrepreneur

Koru Kids wasn’t Carrell’s first foray into entrepreneurship. To alleviate boredom growing up in Invercargill, she’d come up with money-making schemes – selling homemade pastries to her teachers, babysitting and launching a not-so-successful DIY lottery scheme. (Her mother, vehemently against gambling, made her give all the money back).

“That was a learning experience,” she laughs. “Always check with the regulator.”

After attending Southland Girls’ High School, Carrell shifted to Dunedin to study politics and linguistics at Otago University from 1998 until 2002. She was awarded a Rhodes Scholarship to do a master’s in international development at Oxford University and later moved to London to work in the business world, which included working for global management consulting firm McKinsey & Company. As CEO for UK online doctor service DrThom, Carrell learned the importance of establishing robust systems and state-of-the-art technology, applying those skills to Koru Kids.

Rachel Carrell learned the importance of developing systems and technology while she was CEO of UK online doctor service DrThom. Photo / Supplied

She entered a market where traditionally some nannies and domestic staff had not been fairly treated.

“They were often vulnerable, often working without a contract, being paid cash, not getting their employment rights.” Long term, they were not entitled to a pension or benefits like holiday or sick leave.

Koru Kids changed that, ensuring that not only were the nannies top quality but that the jobs they were signing up for came with proper employment contracts that guaranteed minimum hours each week, and the usual employee benefits. That paperwork and organisation, including ensuring tax is paid, is often difficult for busy parents to undertake so Koru Kids does the whole package, she says.

The service makes a big difference to the lives of busy working parents, particularly those who don’t have support from their families to step in and help.

“It also means they can have some easy days in their life, it’s not just so relentless and overwhelming.”

Carrell, mother to Naomi, Alexander, 6, and Freiya, 2, knows only too well the importance of having regular help from dependable and well-trained nannies.

“There’s no way either Dave or I could do what we do without it.”

Although she’s lived in London for years, New Zealand is never far away. Her children have New Zealand passports and the family visits every year, apart from the Covid years. This Christmas will be spent at the Carrell family’s holiday home in Arrowtown.

Koru Kids, too, is a nod to New Zealand. Daughter Naomi’s middle name is Fern and Carrell likes the imagery of an unfurling frond as a child grows up.

“I love the idea of that shape [the koru] as being like a loop of care around the parents and then nanny and the children because that’s what our company is.”

Jane Phare is a senior Auckland-based business, features and investigations journalist, former assistant editor of NZ Herald and former editor of the Weekend Herald and Viva.