I Spy: Where Deals Are Going In Baby & Kids Tech

Funding to the baby and kids tech space is on pace to reach a record number of deals in 2017 as the sector continues to grow.

The space has seen an increasing proportion of early-stage deals over the years: early-stage deal share has grown steadily each year from 54% in 2014 to 61% in 2017, signaling that there may be an opportunity for smaller entrants in the space.

At the same time, there have also been large later-stage mega-deals taking place, such as a $200M Series D round of funding to China-based unicorn VIPKID, a language-learning platform for children, earlier this quarter.

Using CB Insights data, we dove into funding trends to the baby and kids tech sector and visualized where investors are placing bets across different categories within the space.

We define baby and kids tech to include companies developing tech-enabled products and services that primarily serve babies, children up to approximately 12 years old, and their parents. Products and services included range from e-commerce sites to ed tech platforms to augmented reality toys. We exclude any companies that primarily focus on prenatal products and services.

The infographic below visualizes all deals between 2013 – 2017 YTD (9/6/17) to startups featured in the CB Insights Baby and Kids Tech Market Map. The map highlights 85+ of the most well-funded VC-backed startups in the space that had raised capital in the last 24 months.

Please click to enlarge.

Key takeaways

The bulk of deals has gone to startups in the Coding / STEM (science, technology, engineering, and math) subsector within Ed Tech. This includes deals to well-known players such as electronic robot building startup littleBits (which has seen 3 deals since 2013 to reach $59.1M in total disclosed funding), as well as to smaller companies like KUBO, which teaches kids how to code using a robot (2 deals, together worth $1.1M).

Large online marketplace platforms take the majority of deal share within the e-commerce sector of baby and kids tech. Within this category, there are also early-stage deals to kid-centric e-commerce platforms like Mac & Mia and Rockets of Awesome, which use personalization as part of their business model. Startups like these often deliver a custom-curated selection of clothes based on a buyer’s unique preference, allowing buyers to return any items they don’t want to keep for free.

Under the Supervision subsector of Childcare, on-demand ride-hailing companies for kids make up a large portion of deals. While the “Uber for kids” business model has not always done well — as evidenced by the shutdown of Shuddle in 2016 — ride provider Zum raised a $5.5M Series A funding round from Sequoia Capital just last month.

For more insights into Baby and Kids Tech, check out our CB Insights Baby and Kids Tech Briefing.