Funding into mum and baby care companies plunges 80% in 2022
Tracxn has released its Tracxn Feed Report - Mom & Baby Care ahead of International Mother’s Day. The report, based on Tracxn’s extensive database, provides insights into the global Mom & Baby Care space.
Total funding raised by Mom & Baby Care companies across the globe in 2022 was $418 million, a plunge of 80% from $2.1 billion in 2021. This sector attracted investments worth $21 million in Q1 2023, compared with $3.86 million in Q4 2022 and $26.5 million in Q1 2022.
The drop in funding in 2023 so far is majorly due to the absence of late-stage investments. Seed-stage funding in Q1 2023 fell 21% as against Q1 2022 but jumped 444% from Q4 2022. Early-stage investments in the first quarter of 2023 rose 158% when compared with Q4 2022, but dropped 64% from Q1 2022.
The US takes the lead in terms of funding, followed by China and India. Mom & Baby Care companies in the US have raised $5 billion till date, while those in China and India raised $2.8 billion and $1.4 billion, respectively.
The space is seeing minimal or no activity in terms of Unicorns and IPOs. In 2022 and 2023 till date, no new Unicorn companies were created in this space. No IPOs have taken place in 2023 so far, while 2022 witnessed one company and 2021 witnessed two companies going public.
In terms of funding, Gamified learning platforms for Pre-K children is the top-funded business model in the last two years in this space, followed by Online Retailers and Breast Pumps.
500 Global, Techstars and New Enterprise Associates are the most active investors in this space till date. IPV, Angel List and Techstars are the top seed-stage investors and Innoven Capital, Andreessen Horowitz and Sequoia Capital are the top early-stage investors, while Sequoia Capital, General Atlantic and IPGL are the top late-stage investors in the last two years.
The current macroeconomic conditions have slowed the funding activity across industries. The ongoing Russia-Ukraine war and high inflation have also affected the demand and supply, and has made consumers more price conscious.
However, the pandemic accelerated the growth of the Mom & Baby Care space, giving rise to innovation in this segment. Also, millennial and Gen Z mothers have increased the adoption rate of tech solutions in their parenting methods. For the growing number of working mothers, balancing work and parenting has become crucial, boosting the demand for more efficient and convenient solutions.
The rise in the working class population with a higher disposable income, is also a supporting factor for growth in this space. Additionally, this has raised the demand for natural and organic baby care products. Parents are focusing on better-quality products, which are being introduced by both traditional and internet-first brands in this market.