Digital Dream Labs Inc. (DDL), makers of the popular Cozmo and Vector children-geared programmable robotic toys, has recently raised $2 million in a bridge round led by Downtown Pittsburgh-based private equity firm iNetworks.
iNetworks put in $1.2 million, while 99 Tartans LLC, a firm made up of Carnegie Mellon University alumni and students, invested $225,000, and the remaining from angel investors. It’s DDL’s largest funding to date.
"It acts as a bridge round to get us to a Series A or (future financing rounds) because we're examining both avenues right now," DDL's Co-founder and CEO Jacob Hanchar said. "That basically brings the total raised for DDL over the course of many years to … I would say, $5.5 million that we've raised over the course of 10 years."
Hanchar said the company will use the funds to expand its operations, specifically as it looks to infuse more capital into not only the production efforts behind its robots but also for the oversight of that production, including the possibility of manufacturing its products in the U.S. instead of overseas.
"What I'm trying to do is diversify sources of manufacturing for all of our product lines," Hanchar reportedly said. "This investment helps us achieve that goal." Hanchar also hopes the latest investment will better establish the momentum that he and DDL's 40-person workforce is capable of producing.
Founded in 2012, Digital Dream Labs is an EdTechtainment company that develops engaging learning solutions and consumer robots for people of all ages. Through its innovative suite of interactive and hands-on video games and consumer robots, the company is transforming the way science, technology, engineering, arts, and mathematics (STEAM) topics are taught in homes and classrooms around the world.
DDL’s products satisfy the need for engaging, language- and system-agnostic designs that allow pre-readers to interface with both on-screen environments and other devices such as educational robots, smart speakers, and other smart devices and drones.
"Anki had great technology," 99 Tartans investor Bruce Gebhardt, a partner in New York’s Pathfinder Capital Advisors, said in a statement. "Digital Dream Labs has the right team in place to bring these robots back in a big way."
DDL acquired Anki Robotics and Artificial Intelligence’s assets — which included the rights to Cosmo and Vector — in January 2020 for an undisclosed sum. San Francisco-based Anki is a robotics and artificial intelligence startup that put robotics technology into products for children. The company has raised over $180 million in funding since its founding and before it shut down its operations in 2019.
Hanchar said DDL reached $5 million on an accrual basis in revenue last year.