In Connected Toys, Edwin the Duck Appeals to Consumers, Investors

May 23, 2016

Xconomy Indiana — Edwin the Duck flew onto retailers’ shelves in late November, and within six weeks he’d nested in about 14,000 homes across the country. Now the $100 tech-enhanced rubber ducky is making waves overseas.

Introduced in Apple stores throughout Europe last month, Edwin’s early success there has its Indiana-based creators contemplating an international outpost to focus on translating—and localizing—the mobile app content that brings him to life. Distribution in China also is on the horizon.

On this side of the pond, the folks at Carmel, IN-based Pi Lab are gearing up for a domestic expansion this summer that includes product placement in Marbles: The Brain Store, InMotion Entertainment airport shops, Target’s new “smart nursery” department, and Toys R Us. Edwin already is available at Best Buy and Apple stores in the United States.

Consumers and reviewers have embraced the smart toy, which takes the iconic bathtub accessory and makes it something like a child’s best friend—in and out of the water.

Edwin is waterproof, of course, despite electronic guts that include lights, a thermometer, a Bluetooth speaker and an accelerometer that tracks his movements. When he’s within range of a mobile device running an Edwin app, they connect via a proprietary communications language dubbed SQUACK to create an interactive experience suitable for even the youngest users.

The main app features stories, songs, and games starring a digital version of Edwin, and the toy is part of the fun. Children can use it as a game controller, for example, and the lights, sounds, and vibrations it emits reflect what’s happening on the screen. Bonus apps include Edwin’s Sleepy Time, which plays lullabies and has a nightlight, and Edwin’s Wellness, which allows parents to take their child’s temperature using the toy.

Smart, connected toys are growing in popularity nationwide, although most are intended for an older audience than Edwin’s under-5-year-old demographic. Indeed, tech-powered drones, robots, and “toys-to-life” products like Edwin the Duck were lumped together as one of five top toy-and-game trends identified by the Toy Industry Association this year.

Investors also see the promise. According to a recent report from Tandem Capital, total venture capital funding for connected toys topped $104 million in 2015, up from about $10 million just five years before.

Pi Lab has raised $1.6 million in seed funding since 2014, and it is preparing to raise a Series A round—not bad for a startup that suspended an $85,000 Kickstarter campaign when it became clear the goal was out of reach.

Co-founder Don Inmon (pictured above, on left) said the Kickstarter effort helped the company refine its focus.

“It really taught us that we had to evolve our messaging; we had to evolve what the product’s real purpose was,” said Inmon, a product-development veteran who met business partner Matt MacBeth (above, on right) several years ago when they were both working for audio company Klipsch. “And that has moved us from being a toy company … to being an entertainment/education company. It’s about the content that Edwin leads children through.” He added, “That’s how you teach them, how you connect with them.”

Inmon and MacBeth are full of ideas for stories and songs, and they’re in the process of mapping out app content for the rest of the year. They have seven other characters in the works—all animated for now, but if they’re well-received some will become toys too. They’d love for Edwin to star in an animated Web series and eventually make it onto TV. A movie is part of the three-year plan.

Edwin already has a real band, a pair of Indianapolis-area musicians known as The Wingmen. The idea there, Inmon said, is to stage live performances that children can attend along with their Edwin toys, which would link up with the on-stage entertainment. Timing depends on the success of the company’s fundraising efforts.

“We want to expand the play aspect, which to me is the fun aspect, as well as keep growing the education side,” Inmon said.

Pi Lab has just one full-time employee other than the founders. They draw on the expertise of a couple dozen specialists who handle the writing, singing, and animation. Indianapolis-based Plow Digital manages app development.

So far, eight investor groups have backed Pi Lab’s work on Edwin. The company and its product also are winning critical acclaim. Pi Lab won best-in-tech Mira Awards from Indianapolis-based TechPoint in both 2015 (Mobile Tech of the Year) and 2016 (Scale-up of the Year), and was a finalist in the 2016 Last Gadget Standing competition at the Consumer Electronics Show in Las Vegas. Edwin also won a Kids at Play Interactive Award for innovation in children’s media and a National Parenting Products Award this year.