Americans are shelling out thousands per month on childcare. Private equity could be making the crisis worse
“The pandemic laid bare and exacerbated the fragility of the market,” says Melissa Boteach, vice president of income security and childcare at the National Women’s Law Center. The burdens created by COVID-19 created thousands of distressed businesses for larger players to acquire. And as childcare centers closed down, the chains could fill the gaps they left behind. Since 2021, O2BKids has acquired 26 schools, and this year alone it will open 20 new outlets. In the last two years KinderCare, now owned by the Swiss private-equity firm Partners Group, has launched 15 new centers in Massachusetts alone.
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As private equity consolidates its position in the childcare market, focusing its resources on the top end of the market, this problem is likely to get worse. “When you control the supply, you have more power to raise prices,” says Melissa Boteach of the National Women’s Law Center.