September 12, 2014      

Robotics undercover and $41M

Go ahead, nip over to the garage and check out that old playpen or stroller or crib that’s was so hot and new when you bought them. Then jump a decade or so ahead with a quick ramble through Toys ‘R’ Us and look around at the baby gear. Surprise, nothing much has changed. Until now.

A small company in western Pennsylvania named 4moms has been revolutionizing the $8.9B juvenile durable goods market (cribs, carriers, car seats, etc.) through the novel use of robotics hidden beneath a line of slickly designed baby gear.

Products like an ultra-light, easy-folding playard; baby rockers that bob and weave; and a stroller that folds itself up with the click of a button are quickly catching on, especially with fashion-conscious Hollywood moms like Halle Berry, Jennifer Garner and Natalie Portman.

And they’re Hollywood pricey as well: a 4moms Origami Stroller (pictured above)–made in China–currently retails on Amazon for $849.99. Priciest nearest competitor is the $599 Uberchild HD Full 3 in 1 Travel System. Extras for the Origami include one-click power folding; LCD dashboard, 4 cup holders, a thermometer, speedometer and odometer, pathway and daytime running lights, an onboard generator to power itself, and sensors to detect when an infant is in the stroller.

“Our products are totally robots. But customers don’t know that,” said co-founder and CTO, Henry Thorne, in a NewVenturist interview. Customers aren’t looking for robots, he added, they are looking for solutions. “No consumer needs a robot. They have problems and they want solutions. They want an infant seat that better replicates the motion of parents. Look at the mamaRoo: it’s a 2D robotics platform that replicates the motion of parents.”

Backstory to payday

Henry, a roboticist and Carneige Mellon grad, became well known in the robotics industry after inventing Cye in 1999, the first personal robot that could vacuum a house and carry 15 pounds of goods. Prior to co-founding 4moms, Henry founded Aethon, a leading maker of automated robots for hospitals.

The 4moms product strategy has served Henry and co-founder and CEO Rob Daley very well. With revenue of $30M in 2013, up from $16 million the year before, Rob predicts a similar growth year for 2014.

“The partners started the company with $200,000 of their own, then raised $300,000 from Innovation Works and $1 million from Blue Tree Allied Angels,” the pair told The Trib’s Kim Leonard. 4moms collected $23 million in capital before their first large investment came through from Bain Capital in 2012.

4moms’ recent success and jump in revenue has again caught the eye of investors.

Forbes reports “The company’s latest $41 million cash injection comes from new investors Castanea Partners (the guys who sold Fuze Beverage to Coca-Cola for an estimated $250 million), plus some additional investment from Bain Capital, which had previously bet $20 million on the company in August 2012.”

Even Newell Rubbermaid, which owns baby gear leader Graco, previously ponied up $5 million to the cause. Since its founding in 2005, 4moms total investment has raked in over $80 million.

Bain managing director Scott Friend said “We are thrilled to continue supporting 4moms into its next chapter of growth.” Friend is excited about the line-up of new products, including a self-installing infant car seat and an Origami mini-stroller slated for release early 2015.

The terms of the deal will bring Castanea’s managing partner Robert Smith to the 4moms board of directors. In an interview with the Pittsburgh Post-Gazette, Smith said
“4moms represents a great opportunity given our investment and operating experience in branded consumer products. The company is a category leader with an innovative and differentiated approach in the baby products and gear space, which is enthusiastically embraced by retailers and customers alike.”

The Post-Gazette reports that 4moms has been on a steady expansion spree over the past few years. 4moms has added 25,000 square feet to its warehouse; added 10,000 square feet to its office space; and put $4.7 million into upgrading another 78,000 square feet in downtown Pittsburgh to serve as its new headquarters.

Use of the new funds

Daley said the influx of money will help the company focus on adding new items to the growing product line.

In an interview with Forbes, Dailey elaborated, saying “It takes three to five years for the company to develop new products and the company wants to speed up work on its pipeline of product ideas. That means capital will go towards personnel to test new gear and put the jigs in place for production. Its people and prototypes and research,” says Daley.

As demand increases–and Daley feels that 4moms can eventually grab 30 percent of the market–the company will need to get more innovative products to market faster, all the while ensuring safety for infants and affordability for parents. To pull that off, 4moms and a goodly chunk of its new investment will go towards another western Pennsylvania company, ANSYS, which is an engineering firm for simulation solutions that create virtual prototypes of products, which, hopefully, reduce time and money.

Robert Terhune, mechanical engineer at 4moms, lauds ANSYS as “a perfect complement to our product development process. With ANSYS, we can create certain prototypes in the computer instead of in the real world. That gives us accurate predictive answers so we can physically prototype with confidence, making the entire development process faster and much more cost-effective and helps to spur even higher levels of innovation.”

In a recent interview with Seeking Alpha, Thierry Marchal, industry director at ANSYS, said “4moms offers some of the most innovative and well-designed products in the baby gear market. The company is a role model in harnessing the power of engineering simulation to deliver safe, affordable products.”

A stroll in the park

The path ahead looks very healthy for 4moms to be successful. The Great Recession, that had considerably dampened births in the U.S., is now rebounding, which, of course, means cribs and strollers and a full parking lot at Toys “R” Us. Consumer spending is on the rise, even for pricey baby gear like the $850 Origami. And the corporate coffers are $41M richer.

Seemingly the only dark cloud is a dispute over a patent claim from Taiwan-based Wonderland Nurserygoods claiming that 4moms had stolen its fabric-attachment technology. As of June 2014, the litigation was still ongoing.