Analytics

Kids Tech market research for a global venture fund

The Kids Tech market presents significant challenges: stringent children's safety regulations, a prolonged search for revenue-generating models, and communities' negative perception of advertisements directed at children. However, it also offers immense opportunities. Parents are willing to spend generously on their children, and there is no more loyal community than parents eager to recommend a beloved product.

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Project brief

Recently, a venture fund [NDA] approached Blank with a proposal to conduct product analytics, competitive analysis, and technology assessment to pivot one of their portfolio SaaS products in the Kids Tech sector.

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Content & Insights

// Audience market research: content consumption patterns among children

Before making product strategy recommendations for the app, we decided to study how children of different ages interact with content. This will help us formulate the right value proposition and determine the target audience: the child or the parent.

We divided the app's audience into three age cohorts: 5-7 years, 8-11 years, and 12-16 years, and analyzed them in parallel.

For instance, by age 12, 97% of children have their own mobile phones, although they start learning to use them much earlier. Modern children spend an average of 5 hours a day on their smartphones. Due to limited reading and writing skills, they don’t communicate much on the internet but dedicate 2-3 hours to streaming and short video-sharing platforms.

So, if you mind creating a specialized messenger for the K-12 segment, it would be initially a challenging idea.

// Global venture investment landscape in Kids Tech

We assessed the market potential to determine if this is the right time for a pivotal breakthrough for the company. The years 2015-2020 were highly productive, with around 800 companies registering annually in the Mom & Kids Care segment. However, since the early 2020s, this number has dropped to 500 per year. Although funding has also declined due to the venture capital winter and more cautious investor behavior, the industry is far from stagnation.

Currently, most parents are millennials, the world's most powerful consumer group and a tech-savvy generation. Solutions developed in recent years have significantly simplified parenting for them, and they are unlikely to abandon this level of convenience.

In addition to investment volumes, the Blank. team provided the client with analytics on the types of solutions attracting the most investment and monetization models. We found that subscription models work best for younger cohorts, while freemium models are effective for educational products aimed at school-aged children.

// Competitor analysis: case study

In addition to general market trends and benchmarks, we conducted a detailed analysis of 45 companies at the client's request. These companies operate in segments such as social networks for children, video streaming, e-book platforms, marketplaces for children's products, educational games, and organizational management software for daycare centers.

For each specific company, Blank provided data on investments and investors, company functionality and market value as described by the founders, news and updates, as well as any criticism and crisis situations the companies had to overcome.

Methodology

Exploration of niche databases

Our team delved into a variety of venture databases to collect and analyze data on startups, funding rounds, and investor profiles. These databases included Pitchbook, Tracxn, Crunchbase, Dealroom, the United Nations data portal, and Statista.

Insights from industry experts

To validate our findings and gain a deeper understanding of the venture landscape, we consulted with industry experts. Their insights provided valuable perspectives and enhanced the accuracy of our research.

Analysis of market reports and additional sources

We performed a comprehensive market analysis to identify emerging trends, sector growth, and potential areas for disruption. To ensure a holistic view, we incorporated information from academic journals, governmental reports, and other sources such as the Ofcom Children and Parents Media Use and Attitude 2023 report, Pixalate's Mobile Ad Supply Chain: App Safety & Consumer Data Privacy Report, TechCrunch, Forbes, Business Insider, and Kidscreen.