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.
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 cashmanagement 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 financialstructure 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 businessmodel.
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.
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
