What happened to Anki?

Anki was a start-up with a core focus on robotics and artificial intelligence.

The company, which incorporated robotics technology into children’s toys, was founded by Boris Sofman, Mark Palatucci, and Hanns Tappeiner in 2010.

The first product Anki released was a racing game called Anki Drive, where users raced toy cars not dissimilar to those from the Hot Wheels franchise with their smartphones.

The company also released an interactive robot called Cozmo, which was so sophisticated that it was used in robotics classes at Carnegie Mellon University.

The robot was a hit with consumers, too, as it became the bestselling toy of 2017 on Amazon in the United States.

After raising more than $200 million in funding with multiple successful products in the market, Anki declared bankruptcy in April 2019, leaving 200 employees without a job.

Aspect	Description
Founding and Vision	Anki, a tech company founded by Boris Sofman, Mark Palatucci, and Hanns Tappeiner in 2010, had a vision of creating innovative AI-driven products that enhance learning and entertainment.
Initial Success	Anki gained recognition with the release of its first product, “Anki Drive,” a robotic car racing game. The product was lauded for its combination of physical toys and artificial intelligence technology.
Anki Overdrive	Building on the success of “Anki Drive,” the company released “Anki Overdrive” in 2015, an improved version of the robotic car racing game that offered more customization and gameplay options.
Educational Robots	Anki shifted its focus towards educational robotics with the release of “Cozmo” in 2016, a small AI-powered robot designed to engage and educate users, particularly children.
Vector Robot	Following “Cozmo,” Anki released “Vector” in 2018, a more advanced home robot with AI capabilities, including voice recognition and natural language processing.
Financial Challenges	Despite initial success, Anki faced financial difficulties, including high production costs and challenges in scaling up its products. These issues strained the company’s resources.
Shutdown Announcement	In April 2019, Anki shocked its customers and employees by announcing its closure and ceasing all operations. The sudden shutdown left existing product owners concerned about the future of their devices.
Support for Existing Customers	Anki assured existing customers that it would maintain cloud services for its products and provide support, including software updates, for a limited time to ensure their continued functionality.
Acquisition by Digital Dream Labs	In December 2019, Anki assets and intellectual property were acquired by Digital Dream Labs, a company dedicated to reviving and supporting Anki’s products.
Revival Efforts	Digital Dream Labs embarked on a mission to breathe new life into Anki’s product lineup. They promised to continue supporting and improving “Cozmo” and “Vector” through software updates and new features.
Future Prospects	The acquisition by Digital Dream Labs brought renewed hope for Anki’s former customers and fans. The future of Anki’s products would depend on the efforts of the new owner to revitalize and enhance these AI-driven devices.

Table of Contents

Product longevity

The buzz associated with the Anki brand started to diminish in 2018 as the company distanced itself from being a simple toy robotics company.

Vector helped this; a sophisticated robot Anki marketed as part of the family.

While the technological prowess of Vector was undisputed, technology alone could not sustain the sales required to keep the company afloat.

Indeed, while Vector had a loveable personality and an impressive feature list, the novelty for children and adults wore off rather quickly.

The most tragic aspect of Vector’s launch was that competitors such as Jibo and Mayfield Robotics had released similar products beforehand and failed spectacularly.

Economic and product mismanagement

With an annual turnover of $100 million in 2018 and millions more in the bank, the company’s cash management was also questionable, thanks to successive funding rounds.

Anki was known to hire expensive talent from Dreamworks and Pixar to develop the software necessary for Cozmo.

Moreover, the manufacturing process to produce these robots was complex and difficult to scale, which increased costs.

This meant the robots themselves were expensive to purchase.

The Cozmo alone retailed for $180, which put it up against video game consoles that were slightly more expensive but offered so much more in terms of versatility.

The writing was on the wall when the company recapitalized in September 2018 after venture investor Marc Andreessen resigned from his director role.

Recapitalization is a strategy that reconfigures a company’s financial structure to survive a difficult economic period.

Failed funding and industry sentiment

Despite rumors the company was a takeover target for the likes of Microsoft and Amazon, Anki encountered an obstacle it could not overcome in April 2019.

Sofman announced that “a significant financial deal at a late stage fell through with a strategic investor and we were not able to reach an agreement.”

Some believe the deal fell through because of negative industry sentiment around social robots as a business model.

This was caused by the technology not yet being at a level where robots could become meaningful household members.

Others believe the funding deal would require Anki to develop a standalone licensed robot in partnership with a well-known brand.

Though a popular move with some toy companies, Anki was not interested in pursuing this path – perhaps because it was more interested in seeing its innovations and vision come to fruition.

Asset acquisition

Educational tech firm Digital Dream Labs purchased assets belonging to the defunct company in January 2020.

As part of the acquisition, CEO David Hanchar announced the company would use the assets to develop Vector and keep some aspects of the original company intact.

Key takeaways:

Anki was a start-up with a core focus on robotics and artificial intelligence. The company declared bankruptcy in April 2019, leaving 200 employees without a job soon after reporting annual revenue of $100 million.
Anki was, to some extent, ahead of its time. It had a grand vision for robots to become family members, but the technology was not sufficiently advanced to make that dream a reality. As a result, the novelty of its expensive toys soon wore off.
Several last-ditch efforts to secure funding failed for various reasons, but the specifics have never been disclosed. One possible explanation is that industry sentiment likely made venture capital firms reluctant to invest in social robotics.

Quick Timeline

Anki was founded in 2010 with a focus on robotics and artificial intelligence, incorporating these technologies into children’s toys.
Anki’s first product, Anki Drive, was a racing game that allowed users to control toy cars with their smartphones.
The company’s interactive robot, Cozmo, was a huge success, becoming the bestselling toy on Amazon in the United States in 2017.
Anki’s reputation suffered in 2018 as it distanced itself from being just a toy robotics company and released the sophisticated robot, Vector.
Despite raising over $200 million in funding, mismanagement, high costs of production, and competition from other failed social robot ventures led Anki to declare bankruptcy in April 2019, leaving 200 employees without jobs.
A potential funding deal with a strategic investor fell through, possibly due to negative industry sentiment around social robots and the company’s reluctance to pursue licensing partnerships.
Digital Dream Labs acquired Anki’s assets in January 2020, with plans to continue developing the Vector robot and maintaining some aspects of the original company’s vision.