Anki’s Cozmo robot. | Credit: Anki
Update on December 26, 2019: Anki’s assets have been acquired by edtech startup Digital Dream Labs. Read Story.
Anki, the popular consumer robotics company and maker of Cozmo, Overdrive and Vector, has shut down. According to Recode, which first broke the story, a new round of financing fell through at the last minute and led to the San Francisco-based company closing down. Anki is laying off its entire staff of nearly 200 people on Wednesday.
“It is with a heavy heart to announce that Anki will be letting go of our employees, effective Wednesday,” Anki co-founder and CEO Boris Sofman said in a statement. “We’ve shipped millions of units of product and left customers happy all over the world while building some of the most incredible technologies pointed toward a future with diverse AI and robotics driven applications.
“But without significant funding to support a hardware and software business and bridge to our long-term product roadmap, it is simply not feasible at this time. Despite our past successes, we pursued every financial avenue to fund our future product development and expand on our platforms. A significant financial deal at a late stage fell through with a strategic investor and we were not able to reach an agreement. We’re doing our best to take care of every single employee and their families, and our management team continues to explore all options available.”
Losing Anki is a big blow to the consumer robotics market. This isn’t just another Jibo, Keecker, Laundroid or Mayfield Robotics shutting down. Anki was more successful than all of those companies combined. Anki said it had sold more than 1.5 million robots as of late 2018. The company said it made nearly $100 million in revenue in 2017 and expected to exceed that figure in 2018.
So where did things go wrong? It appears Anki was losing its buzz as it tried to distance itself from being known as just a toy robotics company. As The Robot Report noted in November 2018, Anki was setting the wrong expectations with its latest product, Vector. Anki referred to Vector as “the robot to live with” and “a living character in your home.” It was Jibo and Mayfield Robotics all over again.
Crunchbase in September 2018 uncovered a financial shakeup that it says led to Anki’s investors re-capitalizing the company in 2018. And Marc Andreessen of Andreessen Horowitz and Danny Rimer of Index Ventures left their director roles and were replaced by Lawrence Unrein of JP Morgan and Colin Bierne of Two Sigma Ventures, both prior investors in the company.
There’s no question Anki was adept at making charming robots that packed a powerful technological punch. But at the end of the day, the novelty of both Cozmo and Vector, and the other consumer robots that came before them, wears off quickly. Anki’s long-term goal was to make more intelligent robots for homes, but it doesn’t appear it’ll get the chance to do that.
It is unclear what will happen to Anki’s assets, but the shutdown shouldn’t be a total surprise. As we have come to learn, building a sustainable consumer robotics company is very, very hard. Selling just the hardware isn’t working for these companies. Where is the recurring revenue model? There are plenty of free smartphone apps offer in-app purchases to make money. Perhaps the consumer/social robotics company that figures that out, or how to offer up new, engaging content to complement the hardware, will be able to create a sustainable, profitable company.
The Robot Report has reached out to Anki and will update this article accordingly. Anki was founded in 2010 by Mark Palatucci, Sofman and Hanns Tappeiner, three graduates from the Carnegie Mellon Robotics Institute. Anki came out of stealth mode during Tim Cook’s keynote at Apple’s WorldWide Developer Conference in 2013. Watch Anki’s debut below.
My own best guess was that Anki was on a slow ramp up to develop a larger robot. Anki was clearly trying to make a Pixar like robotic character but It was a stretch to pitch such a tiny robot as the living character in your home. I bought into Vector as I considered it was a journey to a larger robot.
Disappointing to see another consumer robotic company close its doors leaving only Sony with Aibo still being successful?
Very sad to hear,,should have reached out to Schools or Gov/STEM programs for Ideas. James
“without significant funding to support a hardware and software business and bridge to our long-term product roadmap”
I am surprised the $182M in funding they had raised – particularly when combined with $100M in revenue – was not considered “significant” enough. I am really curious about the key drivers behind their burn rate how and large the gap was between their revenue and growth plans.
Some quick back-of-envelope calcs:
the last raise of $25M was about 2 years, which alone should have provided about $1M per month (ignoring previous rounds as sunk costs).
$100M in 2018 revenue would have contributed over $8M per month.
Assume the 200 employees make, on average, a generous wage for an SF startup: $180k * 200 = ~$3M per month
This means they had $6M / month of cash left to spend on unit COGS and overhead (marketing, rent, etc)
Each unit costs in the range of $120 – $170, so by my guesstimate they sold about 800k units in 2018. This means their incremental cost other than labor was ~$90…over 3/4 of the unit cost…inescusable for a 9-year-old consumer products company with over 1.5M units sold.
I do not agree with labeling this as another robotics company that failed to find a sustainable product-market fit. To me, this looks like a failure of business management, particularly in terms of cash.
Strongly agree to comments made by Ashmore, Hunter. The math does not make sense no mater how you cut it.
So what happens to all those Consumers who have shelled out $$$$$’s and ££££££’s for these products-if the Companies gone BUNK-Consumers are left with a very expensive but worthless hunk of Plastic and wires…..1 Here in the UK Retailers are STILL selling these despite the news about the close down…..what redress do Consumers have if they are buying something that in a month won’t work?!?