Mattel Acquires Sproutling

Sproutling, a startup that creates innovative and smart IoT products for children has been acquired by Mattel. The acquisition builds on Mattel’s mission to be a leader in the play, learning and development segments and helps the company further its digital presence.

The acquisition by Mattel is another sign that large and well positioned groups that have strong offline and traditional products businesses are increasingly looking for new and innovative digital and IoT products. The need for these companies to constantly innovate make them search for adjacent opportunities and for companies that can bring a wider scope of new and fresh ideas to their current portfolio of products. It also shows how some traditional companies such as Mattel can and should leverage the knowledge and the expertise of much smaller team that have strong and unique technological skills.

It is also a very good sign for developers of smart hardware. We all know how hard an hardware business can be as to operate profitably it usually needs a lot of scale. The fact that large corporations are clearly showing interest in that segment is a good sign for the future these niche IoT products. It will provide the additional funding and liquidity for young companies to continue exploring new opportunities and make risky bets. We are going to see in the years ahead a real growth of the number of connected and smart devices which are both compelling and useful and we can’t wait to continue invest in the best of them.

The acquisition is also a reminder that the product is key. What Sproutling has developed was an incredibly nice product, a great technology, nice branding and a very offering and commercial strategy. By solving real problems to their consumers, they found a way to make it work and today they are moving to the next level with this exit to Mattel. Well deserved.