Anki

What did it do?

Anki was a company that brought super intelligence and robotics technology to products for children. After Anki Drive and Overdrive, racing car sets controlled by smartphone, it released Cozmo, a lovable robot that also aimed to teach children to code, and the more advanced Vector. It was founded by three roboticists who met at Carnegie Mellon University.

Why did it shut down?

Developing hardware and software together, the company had a product roadmap that constantly required fresh capital. According to The Verge, Anki had raised more than $200 million and sold 1.5 million products, but that revenue was not enough to sustain the business. According to a company spokesperson, a major funding deal with a strategic investor fell apart at the final stage. At the end of April 2019 CEO Boris Sofman told around 200 employees that the company would close, and operations ended in May 2019.

The story

In June 2013 an unknown start-up took the stage during the keynote at Apple's Worldwide Developers Conference. Anki showed off toy racing cars controlled by smartphone that found their own way using super intelligence. The same day it also announced a $50 million investment raised from Andreessen Horowitz, Index Ventures and Two Sigma.

The company was founded in San Francisco in 2010 by roboticists Boris Sofman, Mark Palatucci and Hanns Tappeiner, who had met at Carnegie Mellon University. Their goal was to bring robotics and super intelligence into everyday products. The $149.99 Anki Drive set combined physical racing cars with an iOS app, and Anki soon became one of Apple's retail partners. In September 2014 a $55 million Series C led by JP Morgan arrived; in September 2015 Anki Overdrive came out, with track pieces that snapped together with magnets.

The real breakthrough came in October 2016 with Cozmo. Reminiscent of a Pixar character, the little robot could see its surroundings, play games and be programmed by children. Cozmo soon became one of the most popular toys in the United States. In 2018 Vector, which worked with voice commands and needed no phone, targeted older users. In August 2018 the company announced that it had sold 1.5 million products, including toy cars and robots.

But the cost of developing hardware and software together was high. According to The Verge, Anki had raised more than $200 million in total and needed more for its new product roadmap. According to a company spokesperson, a major funding deal with a strategic investor fell apart at the final stage. On 29 April 2019 Sofman told around 200 employees that the company would close; staff could be given only one week's severance pay. Production of Cozmo stopped in May 2019.

In December 2019 Digital Dream Labs bought Anki's assets and released new versions of the products; in 2025 that company renamed itself Anki. The original company's story, however, shows how capital-intensive consumer robotics is: even much-loved products could not save a company that depended on a single investment deal.

Lessons for founders

• In consumer hardware, product success and company sustainability are different things; tie the development cost of each new product to its sales revenue.
• Do not hang your survival on a single large investment deal; while negotiations are under way, have alternative financing and a plan for cutting back ready.
• Build into your cash plan the fact that toy sales pile up in the holiday season.

Sources

1. Anki (American company) (Wikipedia)
2. Robot toy company Anki is going out of business (The Verge, 2019-04-29)
3. Anki debuts at WWDC with a robotic car racing game and raises $50M led by A16Z (TechCrunch, 2013-06-10)

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