In our series highlighting fintechs making a difference in areas like sustainability, social impact, and financial inclusion, this month, we feature UK-based start-up YellowNest, the winner of the Editor’s Choice Award at FinTech Futures’ Banking Tech Awards 2024, to explore how it is working to make childcare more affordable.Kannan Ganga founded YellowNest in 2020 (Image: YellowNest)In an interview with FinTech Futures, Kannan Ganga, YellowNest’s founder, shares how his mother’s career sacrifices to raise him and his siblings, combined with his experience as an HR director “losing good talent” due to denied flexible working requests, inspired him to create a solution addressing the impact of childcare costs on employee retention.When outlining the challenge of childcare costs for parents, YellowNest points out that “1 in 4 UK parents (84% women) are giving up their jobs due to the cost of childcare, which is an average of £1,300 a month. Some are even spending as much as 70% of their income on childcare fees.”“No family should have to choose between having a career and financial well-being”YellowNest, with a team of 12 staff, offers a cost-neutral salary exchange benefit designed to help working parents save on childcare fees, with savings of up to 47% through reduced tax and National Insurance contributions.Under the salary exchange scheme, employees sacrifice a portion of their gross salary or bonus for “non-cash benefits” like childcare, allowing them to pay childcare fees directly from their pre-tax salary and avoid tax and National Insurance deductions on that amount.Explaining the solution, Ganga says: “We’re a payment platform, a bit like PayPal, but we’re B2B, and we handle payments for childcare. The service works through your payroll, immediately at source, and at no cost to the participant, with parents gaining a saving which is realised in real time.”For employers, Ganga highlights that the platform supports them in reaching their EDI goals while helping them to retain and attract talent, all without requiring additional budget since “it pays for itself”.The company caters to a wide range of sectors, including SMEs, technology, retail, financial services, property, and several not-for-profits.As the company has grown, Ganga notes the shift in the size of businesses YellowNest serves, stating that “in the first 12 months, it would probably be around the 100-person mark, and now we are moving into businesses with around 2,000 and greater”.YellowNest’s next focus will be on eldercareDiscussing the “magnitude” of some of the firm’s client wins, Ganga names retail giant Decathlon, fashion leader Ralph Lauren, and UK challenger bank Revolut as key partners. He also hints that the company is talking with “a couple of others that you definitely have heard of, and are most likely on your phone or laptop, but we are just waiting to sign terms with”.Currently focused on the UK market, Ganga a
Mar. Feb 11th, 2025
