Pittsburgh-based Digital Dream Labs Inc. (DDL), makers of the popular Cozmo and Vector children-geared programable robotic toys, has landed a $2 million bridge round investment — its largest to date — as the company sets its sights on a possible Series A funding round.
Downtown Pittsburgh-based private equity firm iNetworks led the round with its $1.2 million investment, while 99 Tartans LLC, a firm made up of Carnegie Mellon University alumni and students, invested $225,000. The remaining funding came from angel investors.
"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 it took about two months to raise the most recent round. He's looking forward to using the funds to expand the company's 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. That includes looking into 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 said. "This investment helps us achieve that goal."
He's also hoping this funding round will better establish the momentum that he and DDL's 40-person workforce, of which 30 call Pittsburgh home, is capable of producing. That momentum has been building for DDL ever since it acquired Anki Robotics and Artificial Intelligence's assets — which included the rights to Cozmo and Vector — in January 2020 for an undisclosed sum. San Francisco-based Anki raised over $180 million in funding since its founding by three CMU alum in 2010 before it shut down operations in 2019.
"Growth is very tough, it's been very hard, but I think my team has done a great job proving themselves and that we are capital efficient and that we're doing everything we can to get through all these difficulties; the shortages, the pandemic and all the operational issues the war (in Ukraine) is causing," Hanchar said. "We're prevailing against all of that, a small and scrappy team, so I'm hoping that the larger firms of the world see this and understand how hard we're working."
Hanchar said DDL reached $5 million on an accrual basis in revenue last year.
"Anki had great technology,” 99 Tartans investor Bruce Gebhardt, a partner in New York’s Pathfinder Capital Advisors, said in a prepared statement. "Digital Dream Labs has the right team in place to bring these robots back in a big way."
