Anki assets acquired by edtech startup Digital Dream Labs [Updated]

The Robot Report

Editor’s Note: This article was updated on December 27, 2019 at 11 AM EST. The Robot Report spoke to Digital Dream Labs Founder H. Jacob Hanchar and added new information about relaunching Anki products and a potential subscription model and open-source Vector 2.0. 

Anki’s robots might be making a comeback, after all. Digital Dream Labs, a Pittsburgh-based edtech startup, acquired all of Anki’s assets – patents, trademarks, data, social media, and domain.

Hilco Streambank handled the sale of Anki’s patent portfolio. It has hidden the Anki portfolio page from its website, but it remains active. According to Hilco, the patent portfolio sale includes the following assets:

  • 45 issued utility patents, including 35 US patents
  • 11 published patent applications
  • 39 pending patent applications
  • 3 utility patents in the National Phase (PCT)
  • 73 issued design patents
  • Trademarks for Anki, Cozmo, Vector, Anki Overdrive, and product lines in development
  • domain name

Digital Dream Labs was founded in February 2015 by H. Jacob Hanchar, who has an MBA from Carnegie Mellon University. Anki was founded in 2010 by three Carnegie Mellon Robotics Institute graduates – Mark Palatucci, Boris Sofman, and Hanns Tappeiner.

Relaunching Anki Cozmo, Overdrive, Vector

Digital Dream Labs is planning to revive and manufacture more units of each product in the following order: Overdrive, Cozmo, Vector. Hanchar told The Robot Report the goal is to have all three products available for purchase for Christmas 2020.

In the announcement about the acquisition, Hanchar wrote that “Cozmo was the major reason we were interested in Anki” and “we are going to launch that part of the platform first.” However, he told The Robot Report that “Overdrive might launch first simply because there was a lot of shelf space dedicated to Overdrive. In retail, it’s all about the real estate your brand is taking up. The margins are good enough and [Overdrive] is simpler than [Cozmo and Vector.]”

For the Anki customers who have emailed The Robot Report asking about the company’s future, still proceed cautiously. Digital Dream Labs only purchased the IP assets, which are not the physical assets and inventory. And we know how complicated Anki’s manufacturing process was. Hanchar said Digital Dream Labs is talking to former Anki employees and with manufacturers to get the manufacturing process up and running again.

Open-source Vector 2.0

Hanchar told The Robot Report Anki had patents that are still pending. “There is new tech, for sure,” he said. That includes a Vector 2.0, although Hanchar admits he hasn’t taken a close enough look at the build of Vector 2.0 to know what was being contemplated.

Hanchar said Digital Dream Labs is thinking about launching a crowdfunding campaign in early 2020 to develop an open-source Vector 2.0.

Digital Dream Labs is contractually obligated to maintain Anki’s servers at AWS until Sept. 30, 2020. Some of Vector’s non-critical cloud functionalities have been turned off, but Hanchar said efforts are being made to turn those back on.

“Cozmo and Overdrive don’t necessarily need constant communication with the cloud,” he said. “They’re nothing like what Vector requires.”

Subscription-based model

Hanchar said on a unit-to-unit basis the profit margins are there for Anki’s products. He said Anki’s overhead is ultimately what did Anki in.

“They had a plan, were patenting things like crazy, and then it just falls off a cliff and ends one day,” he said. “They clearly thought they would still be in business right now up until the end. You don’t see anything in their balance sheet about attempting to turn things around or save money.”

One of the things that could help profitability is a tiered subscription plan. Hanchar said Digital Dream Labs could reduce the upfront cost of the robots and offer monthly subscription packages based on the level of functionality customers want.

“You get the basic services for Price X, get additional features for Price Y, and you get the full Vector services for Price Z,” he said. “I’ll run it like a business first and focus on profitability.”


‘Market presence’ main reason for acquisition

Hanchar wrote openly about how inexpensive the acquisition was, his reasons for making the deal, and how the acquisition posed no risk to Digital Dream Labs. Here’s the third paragraph from his announcement about the deal:

“Why did we do this, you may ask? For a multitude of reasons, but the biggest being market presence. The issue we’ve had since our inception, and many investors on this platform have correctly pointed out, has been marketing. This goes a long way to correct that issue and gives us access to millions of customers for what works out to a fraction of a penny on the dollar. We could not envision a more cost-effective method of expanding our reach while, at the same time, bringing aboard beloved robots and racing games into our family of products.”

Anki had more than 6.5 million customers and was connected to more than 19 million mobile devices.

Digital Dream Labs didn’t disclose the cost of the acquisition, but Hanchar wrote that “we did not pay much and in fact, the biggest cost to this deal is taking on the licensing agreements from third parties like cloud services. The cost of the purchase is not significant to our balance sheet in terms of liability and does not make a serious change to our runway or cash on hand.”

When addressing the potential worst-case scenario, he wrote that “in the unlikely scenario where everything goes wrong and we are unable to [do] anything we want to do, this acquisition becomes a glorified email list purchase that will still drive revenue.”

Dealing with Anki patent issues

Hanchar addressed a couple patent-related issues, including the patent infringement case Anki lost against StretchTech. Since Anki no longer existed as a company, a default judgement was rendered. It said Anki and its successors, among many other parties, are prohibited from “infringing any of the claims of the Asserted Patents in any manner, by making, using, or selling any products that fall within the claims of the Asserted Patents.”

Hanchar said Digital Dream Labs is “separate from those proceedings.” He added that Digital Dream Labs has reached out to StretchTech. “While commercial terms still need to be negotiated, we are confident we can move forward with them with a clean slate,” he wrote.

Anki abruptly shut down despite raising about $200 million in funding. It made more than $325 million in revenue since it was founded in 2010. It made $118 million in gross revenue in 2018.

All three of Anki’s co-founders have publicly acknowledged they have moved on. Palatucci joined Waymo in November as a Staff Research Scientist working on autonomous vehicles. In August, Tappeiner was named Director of Product Development at Apple’s Special Projects Group. Boris Sofman in June joined Waymo as its Director of Engineering, Head of Trucking.

The post Anki assets acquired by edtech startup Digital Dream Labs [Updated] appeared first on The Robot Report.

Source: therobotreport

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