Industry research
Scope
Europe
Companies
42
Table of contents
What does the childcare services market landscape look like in Europe?
The European market for childcare services exhibits a high degree of fragmentation, with variation across countries depending on the respective regulatory frameworks, cultural factors and economic conditions. The market comprises large operators of physical centres managing multiple locations (e.g. Busy Bees operating ~1,000 centres in Europe, North America and APAC) alongside many smaller, local players (e.g. Finland-focused Verkanappulat and France-focused Joey Group). Here, some players differentiate through quality care services with state-of-the-art facilities which emphasise children's safety, while some partner with corporates to offer employee childcare benefits. Larger operators continue to emerge through consolidation as they seek to expand their nursery brands locally, regionally and in some cases internationally. A clear example of this trend is Babilou, which completed ~10 add-on acquisitions from 2020-2025.
What is the level of investor activity in Europe's childcare services industry?
Investor-led interest has been significant, with ~80% of identified European assets being backed by financial sponsors (as of December 2025). Investors are primarily attracted to the market’s (i) strong top-line growth, (ii) high revenue visibility with shortened cash collection cycles, (iii) potential to roll up the fragmented long tail of smaller operators, (iv) growing government funding support for childcare, (v) scalability opportunities for chains that can expand geographically through strong buy-and-build activity or franchise models, as well as (vi) rising technology integration in preschools, offering interactive learning experiences and personalised curricula. Deterring factors for investment include (i) an inhibitive environment for profit-making investors in some parts of Europe due to scandals (e.g. the Dutch childcare benefits scandal), (ii) a structural shortage of qualified personnel and (iii) high compliance standards with changing daycare regulations.
What are the key ESG considerations in Europe's childcare services industry?
ESG considerations primarily relate to social and governance challenges. Social issues revolve around providing accessible services to all socioeconomic groups and prioritising staff well-being to improve retention. Herein, governments, through their extensive funding programmes, play a prominent role in ensuring equal access to high-quality preschool and daycare services, thereby eradicating inequalities stemming from social classes. Governance aspects focus on health and safety compliance for the well-being of children, which players address by hiring talent holding advanced childcare certifications.
In 2023, there were ~15.7m children enrolled in early childhood education across the EU. Of these, ~2.0m were enrolled at early childhood educational development centres (i.e. aged between 0-3) and ~13.7m were in pre-primary education (i.e. aged between 3-7; Eurostat, May 2025)
In the EU, ~68.5% of children aged 3 to minimum compulsory school age attended formal childcare for a minimum of 25 hours a week in 2022, whereas ~20.8% participated for up to 24 hours and ~10.8% were not involved in any kind of formal childcare (Eurostat, September 2025)
With the increasing participation of women in the labour market and the growing number of single-parent households, more Europeans have to rely on early education and childcare, thereby sustaining public demand and government support for preschool services (Eurostat, November 2025; Eurostat, April 2025; European Commission, December 2025)
The rise in employee childcare benefits, wherein businesses offer childcare facilities or preschool support to improve employee productivity and satisfaction, is set to expand the European early education market (Babilou, December 2025)
Growing awareness among parents of early education programmes for the long-term development of children across Europe. This recognition by parents of the social, educational and other developmental benefits of centre-based care is expected to increase demand for high-quality preschool providers (European Commission, December 2025; Bright Horizons, February 2025)
The shortage of skilled professionals poses a structural threat to preschool and daycare operations. Additionally, nurseries across Europe encounter challenges in recruiting new staff for expansion to meet demand amid increasing costs, thus hampering revenue growth and profitability upside (NDNA, November 2025; European Commission, 2023)
Declining birth rates in Europe are expected to reduce the number of daycare and preschool enrolments in the long run. As a percentage of the total EU population, the proportion of children (i.e. aged 0-14 years) is expected to decline from ~15.0% in 2022 to ~13.6% in 2035 (Eurostat, March 2023)
Economic downturns and uncertainties may impact disposable incomes, leading to a reduction in discretionary spending, including on preschool and daycare services. As an example, in the UK, ~50% of parents mention that increasing childcare costs have hampered their ability to work, with a survey concluding that ~38% had to reduce their working hours, while ~10% had to leave the workforce altogether (Junior Adventures Group, December 2025; Act for Early Years, April 2023)
With the full report, you’ll gain access to:
Detailed assessments of the market outlook
Insights from c-suite industry executives
A clear overview of all active investors in the industry
An in-depth look into 42 private companies, incl. financials, ownership details and more.
A view on all 425 deals in the industry
ESG assessments with highlighted ESG outperformers
