what-happened-to-anki

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.

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. 

Read Next: Axie Infinity Business ModelPlay-to-earn business modelFree-to-play business modelEpic GamesFortnitePlay-to-earn business modelgaming industry.

Main Free Guides:

Connected Business Models

Play-to-Earn Business Model

play-to-earn
The play-to-earn model is a business model allowing gamers to farm or collect cryptocurrency and NFTs that can be sold on the market. This model has become a standard already in the “crypto gaming industry,” where blockchain-based games enable token economics to kick in as an incentive mechanism at scale for users to play and be engaged.

Free-to-Play Business Model

free-to-play
A free-to-play is a model that became particularly popular in gaming. Free-to-play is also commonly referred to as free-to-start. For instance, companies like Epic Games have launched popular games like Fortnite’s Battle Royale, which had ingrained a free-to-play model. This is a model that has become extremely popular in the digital age of gaming.

Epic Games Business Model

epic-games-business-model
Epic Games is a gaming company that develops, publishes, and distributes games. It comprises the Unreal Engine, making money through licensing agreements with developers and creators. Its games (like Fortnite) mostly follow a free-to-play model on PC and an in-app purchase model on the digital marketplace. And its storefront Epic Games Store, taking a 12% cut on games’ sales.

Who Owns Fortnite

who-owns-fortnite
Epic Games owns Fortnite; Tim Sweeney, co-founder and CEO, is the major shareholder, with more than 50% of the company. And Tencent with a stake of over 40% of the company. Epic Games develops, publishes, and distributes games. It comprises the Unreal Engine, making money through licensing agreements with developers and creators. While Fortnite primarily follows a free-to-play model with up-sells and digital in-app purchases.

Related Business Stories

What Happened to WeWork

what-happened-to-wework
WeWork is a commercial real estate company providing shared workspaces for tech start-ups and other enterprise services. It was founded by Adam Neumann and Miguel McKelvey in 2010. WeWork’s business model was built on complex arrangements between the company and its landlords. There were also several conflicts of interest between Neumann and WeWork, which provided the impetus for the failed IPO and significant devaluation that would follow.

What Happened to Netscape

what-happened-to-netscape
Netscape – or Netscape Communications Corporation – was a computer services company best known for its web browser. The company was founded in 1994 by Marc Andreessen and James H. Clark as one of the internet’s first and most important start-ups. The Netscape Navigator web browser was released in 1995 and became the browser of choice for the users of the time. By November 1998, it had been acquired by AOL, which tried unsuccessfully to revive the popularity of the web browser. Ten years later, Netscape was shut down entirely.

What Happened to Musical.ly

what-happened-to-musically
Musically, or Musical.ly as it is officially known, was a Chinese social media platform headquartered in Shanghai. After passing 200 million users in May 2017, the platform was shut down by tech company ByteDance in November. After its acquisition, ByteDance suggested Musical.ly would continue to operate as a standalone platform. Company representatives noted that it would be able to leverage ByteDance’s AI technology and enormous reach in the Chinese market. Musically was ultimately absorbed into TikTok in June 2018, with the app no longer available in August of the same year. Existing users were offered technical support and several new features as a sweetener.

What Happened to Vine

what-happened-to-vine
Vine was an American video social networking platform with a focus on looping video clips of six seconds in length, founded by Dom Hofmann, Rus Yusupov, and Colin Kroll in 2012 to help people capture casual moments in their lives and share them with their friends. Vine went on to become a massively popular platform. Yet by 2016, Twitter discontinued the mobile app, allowing users to view or download content on the Vine website. It then announced a reconfigured app allowing creators to share content to a connected Twitter account only. This marked the end of Vine.

What Happened to CNN Plus

what-happened-to-cnn-plus
CNN Plus was a video streaming service and offshoot of CNN’s cable TV news network that was launched on March 29, 2022. The service was ultimately shut down just one month after it was launched. Trouble began for the platform when parent company WarnerMedia merged with Discovery. The latter was unimpressed with paltry viewer data and, with $55 billion in debt to clear, was not interested in funding CNN+ moving forward. Other contributing factors to CNN Plus’s demise include a lack of compelling content and streaming service market saturation.

What Happened to Clubhouse

what-happened-to-clubhouse
Clubhouse is a social app that allows thousands of people to communicate with each other in audio chat rooms. At one point, the company was worth $4 billion and boasted users such as Mark Zuckerberg and Elon Musk. Clubhouse declined because it rode the wave of pandemic lockdowns and suffered when people resumed their normal routines. The decision to remove the invite-only feature also caused a rapid influx of new members and removed any exclusivity. Clubhouse management also failed to define a business model and was unaware of the components of a successful social media site.

What Happened to Facebook

what-happened-to-facebook

What Happened to Sean Parker

what-happened-to-sean-parker
Sean Parker is an American entrepreneur most associated with the music-sharing platform Napster. Parker founded Napster with childhood friend Shawn Fanning, and the service was launched in June 1999 while the pair were still teenagers. Napster’s ultimate demise in 2001 is well documented. Parker was forced to step down as Facebook president in 2005 after an arrest for drug possession in North Carolina. Still, he retained a significant shareholding and informal involvement with the company. He then worked with Peter Thiel at his venture capital firm for a time and then moved into philanthropic efforts.
Scroll to Top
FourWeekMBA