Beansprout Networks offers web sites, commerce to child care professionals

Internet Strategies for Education Markets: The Heller Report, Dec, 1999

The offering sounds familiar in K-12 markets, a free web site featuring customizable home pages, access to educational content, and revenue from e-commerce. Beansprout Networks (Arlington, MA, www.beansprout.net), however, is targeting childcare providers and pediatricians offices. Pediatricians, says James Chung, ceo, control $15 billion of spending a year, and childcare providers about $10 billion. Unlike the K-12 hierarchies for buying decisions, these are markets of small business owners making their own purchase decisions.

Beansprout plans four networks on the web: Beansprout Pediatrics Network (launched earlier this year and now reaching 1,500 offices), Beansprout Child Care Network (launched in November), a network for organizations that provide child care resource and referral services (to be launched in the spring of 2000), and the Beansprout Marketplace. Sites allow the doctor's office or day care to post general office information and to offer registered families secure, password-protected information such as message boards, calendars, classroom pages and online office forms. Beansprout also allows the site to link to an online guide about child health, safety, learning and development. Uniquely, pediatricians and day care centers can edit each piece of the guide however they wish. Beansprout also offers professional development information for child care providers.

E-commerce for Professionals and Parents

Like the K-12 world, in which web services hope to reach parent buying power via the schools, Beansprout plans to provide parent services and e-commerce offerings in the coming year. Pediatricians and child care providers, says Chung, are among the major influencers in parent purchasing decisions.

Whether for professionals or parents, the Beansprout Marketplace is intended to provide substantial discounts to groups that have not previously had collective buying power. While initial purchases have been for consumables, says Chung, Beansprout also plans to make capital purchases, such as high-end medical equipment, available over the web. The company will also receive fees for facilitating buying decisions that simply can't be made over the web, purchases such as pricey playground systems.

While Beansprout is open to affiliate agreements, Chung says the company is making individual agreements with vendors in which it receives a transaction fee. Beansprout currently has about 100 vendor relationships and is seeking more agreements with companies selling childcare goods. Chung anticipates additional e-commerce revenue models.

Beansprout completed a $6.75 million round of financing in October and will soon begin a third round of financing for approximately $30 million. Domain Associates (Princeton, NJ) led the most recent round. That firm invests primarily in early-stage healthcare technology companies. Other investors included Chase Capital Partners (New York, NY), and Delphi Ventures (Menlo Park, CA).