Why ResilienceVC Invested: Mirza

Mirza works through employers and Medicaid Managed Care Organizations to help employees and members learn about relevant childcare benefits, determine eligibility for those benefit programs, and easily apply for childcare benefits.?

The Challenge

You just welcomed your new baby into the world. Though joyful and exciting, life now has thrown several new difficulties your way. Nights are challenging and you lost track long ago of how many diapers you have changed. The baby apparel and necessary home upgrades have been chipping away at your savings, and your budget was already running thin. Baby in hand, you grapple with how you need to get back to work to provide for your child and family.? As a nurse who spent years training, you want to be able to use your degree and skills, and you like working with the staff and patients at the senior care facility where you’ve been employed for six years. You are forced to weigh the income and advancement opportunities of your job with the heavy expenses of childcare. The math seems impossible to make work.?

Unfortunately, this dilemma is a reality for millions of low- to moderate- income Americans across the United States. Rising childcare costs are putting significant financial pressure on the lives of many. If, like the ResilienceVC team, you are a DC resident, annual childcare expenses can reach over $24K. In 33 states, childcare is more expensive per year than in-state college tuition. Cost is not the only factor though. With just one year out of the workforce, mothers lose 39% of future years’ earnings. It is no surprise that 62% of stay at home moms or those working part-time with kids under 12 years old want to work or work more hours, but can't due to high childcare costs.

Thankfully, federal and local government agencies are aware of the? challenge, approving billions of childcare subsidies and rebates for low-income families. Unfortunately, these resources, which sit in government coffers behind a wall of difficult-to-find and confusing paperwork, are fragmented and too often go unseen and under-utilized. According to the White House, up to $140B in authorized government benefits go unclaimed each year.?

The Mirza Advantage

The challenge of affording childcare does not have to remain such a burden. Mirza helps parents learn about relevant childcare benefits, identify benefit programs for which they are eligible, and easily apply for those benefits. On a simple and easy-to-navigate platform, parents fill in their information and are immediately matched with relevant childcare assistance. The average Mirza user who is eligible for benefits receives $10K in annual childcare funding for each child’s care, which can be used toward daycare centers? and in most states, can also be used to pay the extended family members and friends who provide childcare. To date, over 90% of Mirza users have been eligible, and qualify on average for 3 different childcare subsidy programs.?

Mirza understands that parents are busy with tight budgets, so Mirza leverages B2B2C partnerships with employers and Medicaid Managed Care Organizations (MCOs) to cover the cost and drive distribution of its product. Mirza helps employers attract talent, reduce employee absenteeism, and improve employee retention. With Mirza, Medicaid MCOs also see decreased member turnover and help remove barriers preventing members from getting to their appointments, specifically pre- and post-natal appointments and women’s health screenings where lack of access to childcare is the top reason for missing appointments.

The Mirza team is also led by outstanding co-founders Siran Cao and Mel Faxon. Each founder brings unique prior experience as an operator in large innovative technology companies or as a founder. Both Siran and Mel demonstrate a deep commitment to helping underserved communities.?

The Opportunity

With a challenge as large as childcare in the United States, opportunity for disruption and improvement abounds. Estimates place the economic toll of childcare in the US at $122B. Employers alone face $23B in additional expenses due to their employees’ childcare challenges. When parents quit their jobs in order to cover childcare, recruiting and onboarding a new hire can cost 3-4X that position's salary.?

Additionally, there are 66M Medicaid enrollees who are receiving care through a Medicaid MCO, many of whom have children eligible for government support. These large MCOs are often required (scored through Healthcare Effectiveness Data and Information Set, or HEDIS ratings) to ensure patients are showing up for appointments and getting immunizations for their children. Their government contracts are on the line.?

With Mirza aligning incentives at a low cost, these mammoth stakeholders can now scalably help support their employees and members with a key financial resilience challenge and improve their business performance simultaneously.

Impact and Thesis Fit

At ResilienceVC, we focus on embedded fintech companies driving financial resilience for low- to moderate- income Americans, so we are excited to see Mirza’s clear focus on financial resilience and its distribution strategy through aligned partners. By accessing government-backed childcare subsidies and rebates, low- and moderate-income Americans can experience substantially reduced expenses and higher wages over time, resulting in greater financial resilience. By leveraging distribution channels like employers and Medicaid providers, Mirza is reaching parents efficiently and at no cost to the family.

We are thrilled for the future of Mirza and cannot wait to see the company continue its growth? in serving working parents who need childcare support.

Learn more about Mirza here.

About ResilienceVC

ResilienceVC is a seed-stage venture fund investing in embedded fintech startups that are driving financial resilience for low- and moderate-income consumers and small businesses. The firm invests in startups that are leveraging new technologies and business models to provide affordable, relevant, and responsible financial services that increase income, lower risk, and build net worth to help Americans thrive. Founded by Tahira Dosani and Vikas Raj, the ResilienceVC team has over a decade of joint experience in seed-stage fintech investing and has supported over 75 innovative and impactful fintech startups. The team's extensive experience in the fintech sector and in early stage venture capital drives best-in-class sourcing, diligence, and portfolio support, delivering long-term impact and top-tier returns. More on ResilienceVC can be found here: https://www.resilience.vc/