Artificial Intelligence driven Marketing Communications
Sphero, the maker of connected STEAM toys, is buying LittleBits, another connected toy company that teaches kids to code. The companies didn’t disclose how much Sphero spent on the acquisition, but both companies have similar business models. They mainly sell to schools and have built educational support systems to assist teachers. Combined, the companies say, they’ve reached over 6 million students across 35,000 schools.
Both companies understand the importance of schools to the viability of a hardware company. Some hardware companies focus on consumer subscriptions, like the Keurig coffee pod model, but Sphero and LittleBits instead sell to teachers and offer subscription plans that cover standard wear and tear, which is essential for products used by hundreds of kids yearly. Both companies also sell specialized packs of their products that are designed specifically for schools. Those schools have recurring budgets, too, which means they might always have cash to buy more devices.
I’m sure Sphero and LittleBits will soon sell combo packages to schools and also upsell schools that don’t already have one product or the other built into their curriculum. Earlier this year, I chatted with Sphero co-founder Adam Wilson about the company’s subscription service model. I also chatted with now-former LittleBits CEO Ayah Bdeir about how tariffs impacted LittleBits. You can watch both conversations below.