As families seek more child care options, Tierra Encantada eyes growth with $38M investment

Minnesota’s child care industry is under pressure as providers struggle to fill open positions. A recent survey by the Minneapolis Fed and First Children’s Finance found more than 700 open jobs resulting in more than 2,000 unavailable child care slots statewide.

Other states and metros are facing similar challenges.

To help fill the gap, Tierra Encantada, a growing Spanish immersion child care company headquartered in Minneapolis, is planning to use fresh capital from a Pennsylvania investment firm to deepen its ability to provide early childhood education and options for families raising bilingual children in Minnesota and across the U.S.

To fuel a nationwide expansion, Tierra Encantada founder and chief executive Kristen Denzer recently secured $38 million in a growth equity investment from Pennsylvania-based Susquehanna Growth Equity (SGE).

“We’re really excited about the partnership because they are very founder-centric. Taking them on as a minority investor really is going to allow us to increase both scale and quality,” Denzer said.

Tierra Encantada has locations in Minnesota, Illinois, Texas and Virginia. Of its 12 locations, two of them are franchises. Denzer said the company will have 16 centers by the end of the year, including an opening in Kansas. Two of the four new centers will be franchised.

“We’re growing through both franchise and corporate growth,” Denzer said.

Denzer, the 2022 Small Business Administration’s Minnesota Small Business Person of the Year, said the capital will help Tierra Encantada invest in technology, training and innovation as it builds the business.

Tierra Encantada does not teach Spanish, but its early education classes are taught in Spanish. Tierra Encantada is available to children ages 6 weeks through 6 years old. All of its locations offer global meals from a licensed commercial kitchen.

The investment marks the first institutional capital Tierra Encantada has secured since it was founded in 2013. Denzer declined to disclose Tierra Encantada’s revenue.

“Tierra Encantada is the clear leader in Spanish immersion early education, and we believe their differentiated model represents the future of childcare,” said Kyle Squillario, managing director of SGE, in a statement.

The private equity firm is also an investor in Minneapolis-based Field Nation, a platform that connects companies with IT technicians.