Tiny Earth Toys bulks up funding, operations ahead of holiday shopping season

Triangle startup Tiny Earth Toys has added another $1.6 million to its coffers – just in time for the holidays. It’s the second outside capital raise for founder Rachael Classi, who closed on $1.5 million to really roll out the concept in 2021.

The toy company is about to get a big test – holiday shopping season.

In some ways the flex space it’s operating out of at Raleigh’s the Launch Pad is like Santa’s workshop. The 14-person company, which offers a toy subscription service, is busily working to prepare for holiday gifting – and it’s doing so against a constantly ticking clock as demand keeps increasing.

Classi said that, just in the past two weeks, there’s been a “really big surge” in memberships as parents look for low-clutter ways to bulk up their kid’s toy chests this Christmas shopping season.

“We think what’s happening is, families are trying to get ahead of the holiday rush,” she said.

They’re trying to get out ahead of supply chain issues and toy outages. But in the case of Tiny Earth Toys’ customers, they’re also trying to avoid the glut of stuff – the plastic toys with tiny pieces you step on long after the ornaments have been put away.

Tiny Earth Toys – which offers age-appropriate sustainable toys that families return to receive the next box of hit toys – is a company with two missions. Yes, it hopes to entertain children with enriching toys. But it’s also hoping to help families – and landfills -  cut down on waste. The toy is fully played with, and then instead of piling up in the corner of a kid’s playroom – eventually finding its way into a landfill- it’s sent back.

With a membership, every other month kids get a new set of toys.

The company, just two years into its inception, is already a hit investors are banking on, funneling more dollars into the concept.

Classi, a mom of two, quit a successful career at Teamworks in Durham during the pandemic so she could hunker down with her family. But becoming a stay at home mom made her realize how many plastic toys were cluttering up her home. So she started her own business.

Tiny Earth Toys is bulking up with that capital. The firm is planning to hire additional workers, particularly in engineering. It recently moved to Raleigh’s the Loading Dock, and it’s eyeing other flex warehouse space out in the market, as it knows it will likely outgrow its current space if it keeps up this blistering pace of growth.

The latest round closed in October.

In addition to growth, it’s also fueling philanthropy. Tiny Earth Toys plans to select 10 families to receive a year's worth of toys for free through the company's rental membership.