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Posted on Thursday, Sep 3rd 2015

According to a recent IBISWorld research report, the US home health care market is estimated to be worth $73 billion this year, having grown a modest 1.5% annually over the period 2010 through 2015. Another IBISWorld report pegs the country’s spend on child day care to be worth $45 billion this year, having declined 0.8% annually over the five year period ending 2015. While 59% of this day care revenue is derived from services provided in licensed day care centers, a reasonable portion is also spent on in-home care providers. Online care destination (NYSE: CRCM) diversified into the social commerce segment last year to drive growth.’s Financials
For the recently reported quarter, saw revenues grow 38% over the year to $35.7 million, marginally ahead of the Street’s forecast of $35.5 million. The company continued to incur losses and ended the second quarter with a net loss of $0.23 per share. Adjusted losses came in at $0.16 per share and were better than the Street’s forecast of a loss of $0.25 per share due to the significant focus on cost savings initiated by their leadership.

During the quarter, revenues from the US Consumer Businesses grew 27% over the year to $27.1 million and revenues from the Workplace Solutions, International and B2B businesses grew 29% to $5.8 million. Citrus Lane, a social commerce acquisition they made in 2014, brought in $2.7 million in revenues for the quarter.

Among operating metrics, total members grew 40% to 16.5 million with total families increasing 45% to 9.3 million and total caregivers growing 33% to 7.2 million. Average US monthly unique visitors increased 30% to 8.2 million with 67% of the visitors accessing the site through their mobile application. Unpaid SEO traffic grew 38% over the year.

For the current quarter, expects revenues of $34 million-$36 million with an adjusted loss of $0.27-$0.24 per share. projects to end the year with revenues of $134 million-$140 million and a loss of $0.68-$0.60 per share.’s Expansion continues to expand their offerings by tying up with other online businesses. Recently, they tied up with vacation rental site HomeAway to allow parents to search for care services even while on vacation. As part of the agreement,’s services have been integrated with HomeAway’s mobile app so that parents can search for care givers for their children while on vacation. According to their market report, more than 70% of HomeAway’s travelers travel with at least one child. By integrating the two services, vacation goers will be able to search for sitters from any location.

They are also working with online restaurant reservation service OpenTable and online movie ticket and schedule service Fandango for a “Date Night” offering. The agreements are expected to be announced in September this year and will help simplify the process of planning a date and arranging child care for parents.

Additionally, is also experimenting with pricing models. During the last quarter, out of the 16.5 million total members, a mere 254,000 members were paid subscribers. is hoping to address this by changing their pricing models. Details of the changes have not been disclosed, but is currently testing them and hopes to see improvement in their paid user base in the coming months.

The market is not happy with their performance so far. Their stock is trading at $5.97 with a market capitalization of $191.37 million. It touched a high of $9.46 in November last year. The stock has fallen significantly since it went public at $17 a share earlier last year and has eroded the company’s valuation by nearly $600 million.


I am generally not a big fan of the category of companies like Angie’s List, and and their business models. They rely on crowdsourced information and hope to monetize through advertising and subscriptions. They find it hard to generate subscription revenues simply because most of the information they provide on their sites is available for free on other local review sites like Yelp. They do earn additional revenues through advertising and social commerce, but their core business continues to suffer. It is not just, but the entire category is in trouble.

To get out of this bind, this class of companies with their very large user bases would need to reinvent themselves and their business models at much more fundamental levels. Otherwise, they’re running plain bad businesses.

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