Anki

Building emotionally intelligent robots
Startup Cemetery
GENERAL INFORMATION
Category:
Software & Hardware
Country:
United States
Started:
2010
BUSINESS FAILURE
Outcome:
Shut Down
Cause:
Lack of Funds
Closed:
2019
FOUNDERS & EMPLOYEES
Number of Founders:
3
Name of Founders:
Boris Sofman, Hanns Tappeiner, Mark Palatucci
Number of Employees:
100-250
FUNDING
Number of Funding Rounds:
5
Total Funding Amount:
$182M
Number of Investors:
6

What was Anki?

Anki was a robotics and AI startup founded in 2010 that aimed to integrate robotics and IoT (Internet of Things) into children's toys and games. Anki programmed objects so that they could be intelligent and adapt to the physical world, with the aim of solving the problems of positioning, reasoning, and execution in artificial intelligence and robotics. 

Their first successful product was the Anki Drive; which combined a toy racing car and track set with an iOS app for controlling and programming the toy cars. Anki also released other successful products like Anki Overdrive (the successor of Anki Drive) and an interactive toy robot called Cozmo, as well as a more advanced version of Cozmo, called the Vector. The sophistication of Cozmo even made it to Carnegie Mellon University (the founders’ alma mater), where it was used for college-level robotics classes. Cozmo, in fact, came with programing tools ranging from a simple drag-and-drop interface based on MIT’s Scratch Blocks to a full software development kit in the Python programming language.

According to Boris Sofman, the company’s CEO and co-founder, their goal was to create robots that “feel alive.” This included creating naturalistic imperfections in how they moved around, for example. This was in order to make them appear more lifelike to their human companions. Anki’s Cozmo and its successor Vector were 2 products that showed quite a high level of sophistication in what was coined as "AI emotional intelligence"; which in other words means the capacity to show "emotion" to new stimuli.

The company received $50 million in Series A and Series B venture funding from Andreessen Horowitz, Index Ventures, and Two Sigma. In September 2014, Anki announced that it had raised another $55 million in Series C venture funding led by JP Morgan. In June 2016, the company announced its latest round of funding, which amounted to $52.5M, also led by JP Morgan. The total funding to date is $182.5 million.

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Why did Anki fail and shut down?

Anki barely lasted for a decade and completely ceased operations by the end of April 2019. This is not something you would expect from a company that is a brainchild of Carnegie Mellon graduates, and a company that raised close to $200 million in VC funding. The products that Anki produced were also performing really well in the market and at a competitive price tag of under $300, they seemed to do what their competitors in this industry could not. In fact, according to many sources (like Amazon US), Cozmo was the best selling toy of 2017. So what took this promising startup eventually to the grave?

A failed round of financing was reportedly to blame. CEO Boris Sofman told employees that a deal had failed to materialize “at the last minute”, as it also happened with acquisition interests from companies such as Microsoft, Amazon, and Comcast.

An article published by The Robot Report provides some more information about Anki’s case. According to it, Silicon Valley Bank had a security interest in Anki’s copyrights, patents, and trademarks since March 30, 2018. To receive a loan from SVB, Anki had to put up its intellectual property as collateral. If Anki failed to repay the loan, SVB had the right to seize the collateral to make up for the money it lost in the loan. The report also stated that Fisher & Richardson, a global IP law firm, filed a lien against Anki on June 3, 2019, because it “has not been compensated for patent and trademark prosecution services that it provided for Anki”.

However, can these financial debacles be the sole reason, or is there something inherent within the robotics industry that is to blame? 

A quick look at the failure of other robotics companies within the last year paints a very clear picture. There needs to be a rethink as to the functionality and not just the novelty factor (which tends to fade out very quickly) when thinking of designing the next successful home robot. It is like what Roomba and Alexa have done within the past decade (specialized and functional robots that actually do the job they are meant for).    

A major failure, for example, was Jibo, founded in 2012 by famed MIT roboticist Cynthia Breazeal (a pioneer researcher in human-robot interaction). Jibo went on to successfully raise over $3.5 million when its Indiegogo campaign ended in 2014. They raised a further $73 million in VC funding and Jibo was touted as the first social robot for the home that would actually dance around for you! Another similar failure was the shutdown of Mayfield Robotics. They had released their famed Kuri robot that was touted as being a roaming security camera with a personality. Both robots came with a high price tag and their novelty wore off among users very soon, leading to their shutdowns in late 2018. 

The epic failure of Cozmo and Vector proved the fact even further that despite a successful product line and competitive price tags if products (no matter how well designed) do not prove their value in the consumer market, they will not lead to a sustainable business model for the companies investing in them.

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