Can startups nurture Indonesia’s overlooked daycare market?

What makes a tradition endure across generations? In Indonesia, family-based childcare reflects deeply rooted social norms that designate women as primary caregivers. This creates a childcare landscape that has changed little over time.

While the country is home to 30 million children under six years old, only 19.3% of mothers use early childhood education facilities like daycare centers, according to a recent World Bank report.

This means the majority still depend on traditional family-based childcare.

Interestingly, some startups have begun tapping into the overlooked potential of the daycare market. These new players are leveraging tech not only to fill in the long-standing gaps in the industry but also to reshape how parents perceive and choose childcare services.

Vicious cycle

In addition to the challenges stemming from social norms, daycare centers in Indonesia face a reputation problem.

Reyner Soendojo, a Jakarta resident in his 30s, says he’s been very selective in choosing a daycare center for his two-year-old son after hearing about recent cases of child abuse at facilities in Depok and Pekanbaru that went viral on social media.

He points out how these incidents “don’t inspire confidence among parents.” 

Photo credit: Laoongjune / Shutterstock

Indeed, many daycare centers in Indonesia operate informally, without proper legal standing.

Approximately 40% to 80% of Indonesia’s daycare providers are MSMEs that have not incorporated as limited liability companies. They also “lack standard operating procedures,” explains Antoni Lewa, co-founder and CEO of daycare startup KinderCastle.

Headquartered in Jakarta, KinderCastle operates a tech-enabled daycare network, emphasizing data-driven services and structured curricula as its competitive edge.

A 2021 study by the Indonesian Child Protection Commission (KPAI) also found that 44% of childcare providers in the country lack licenses.

Driven by urbanization

Formalizing the sector