Anki to Shut Down – Another Consumer Robot Company Falls
Recode reported yesterday that Anki, the consumer robot company known for its Cozmo and Vector robots, is laying off its entire staff and shutting down. The company raised nearly $200 million according to Pitchbook data with a $17 million funding round coming as recently as September 2018. Another funding round for an additional $28 million was opened in August and that apparently did not close and led to the company’s cash flow shortfall. The company told Crunchbase that it had revenue of nearly $100 million in 2017 and expected to exceed that figure in 2018.
Anki CEO Boris Sofman told staff in an all-hands meeting Monday that their employment would end Wednesday and that the nearly 200 employees would all receive a week of severance according to Recode’s Theodore Schleifer. SoundHound announced in February 2019 its integration alongside Amazon Alexa in the Anki Vector robot in what was seen as a sign of progress for the adoption of the company’s Houndify voice platform. Anki Vector also was prominently displayed in CES marketing materials for this year’s January event and was a 2019 innovation award nominee.
— Anki (@anki) November 8, 2018
However, the marketing momentum couldn’t keep up with the company’s cash flow needs. An Anki spokesperson told Recode:
Despite our past successes, we pursued every financial avenue to fund our future product development and expand on our platforms. A significant financial deal at a late stage fell through with a strategic investor and we were not able to reach an agreement.
Consumer Robot Sector Struggles
It has been a challenging twelve-months for consumer robots often referred to as social robots. Mayfield Robotic’s Kuri shuttered last July after winning a CES innovation award in 2017. That was preceded by the widely-hyped Jibo robot selling off its assets in June 2018. However, both of those robots suffered from high prices and an unclear rationale for purchase. Jibo was selling for $899 and Kuri for $700. Vector and Cozmo, by contrast, are still listed for $249 and $179 respectively. The latter is a toy with some options for customization so the rationale for purchase is clear. Vector was more ambitious, but the price points are not out-of-line with other consumer electronics gadgets for children or adults even if a novelty.
Last summer, Voicebot speculated that consumer robots likely had suffered from the rapid adoption of smart speakers. Many of the core functions that consumer robots sought to provide such as access to information, entertaining children, and even communications were already features available through smart speakers, many of which were frequently sold at discounts below $30. The quick rise of smart speakers meant that consumer robots needed different capabilities to become relevant.
Could Amazon or Google Finally Deliver the Market a Successful Consumer Robot
Apparently, even positioning as a toy and selling 6.5 million devices as opposed to a home companion like Jibo and Kuri, was not enough to build a sustainable economic model. With that said, it is not clear that smart speakers as priced today by Amazon and Google are sustainable from a purely economic standpoint. Many of these products appear to be subsidized or often sold at a loss. That can be justified because Amazon and Google do not need to generate profit from the devices directly to provide value. Increased use of the companies’ other services by smart speaker users can easily justify subsidizing the hardware for at least some period of time and maybe indefinitely.
So, we’ve yet to see a successful consumer robot. A senior Amazon executive did speculate recently that Alexa with eyes and mobility could enable it to become more capable and knowledgable. Maybe, the first successful consumer robot is more likely to come from Amazon or Google as an extension of their smart speaker ambitions. The standalone model still doesn’t appear to work.