Colorado-based toy robotics startup Sphero raises $12M, with plans to raise $20M total, as it shifts focus to education after dozens of layoffs in January
This year has been a rough one for Sphero. The Colorado-based toy robotics startup kicked off the year with dozens of layoffs …
Context & Ripple Effects
Sphero's year began badly: after a disappointing holiday season it cut 45 staff and said it would refocus on education, per its January layoffs. The $12M raise — first tranche of a planned $20M — is the funding behind that pivot, arriving just before the company also picked up music-education startup Specdrums to widen its classroom lineup.
The bet has since looked prescient: within a year Sphero doubled down on education with the littleBits acquisition, adding electronics kits and instructional content to its robotics base.
First-order effects
- The new capital lets Sphero fund the education pivot it announced with the January layoffs, while its consumer toy business — the source of the disappointing holiday season — recedes in priority.
- Investors are underwriting a smaller, more focused Sphero: the round is structured as $12M now against a $20M target, tying further money to execution on the education strategy.
Second-order effects
- Days after the raise, Sphero acquired Specdrums, whose tap-to-play color rings slot into the same education portfolio — suggesting the pivot will be built partly through tuck-in acquisitions rather than internal development alone.
- Competitors selling robotics into schools now face a better-capitalized Sphero that bundles hardware with curriculum, pressuring rivals that still compete on toy-shelf appeal.
Third-order effects
- If the pattern holds, consumer robotics startups treat holiday-retail toy economics as unsustainable and restructure around institutional education budgets — a path Sphero's own spinoff Misty Robotics took in the other direction, raising venture money for home robots separately.
- The eventual outcome at Sphero — a new CEO and a first-responder spinoff by 2020 — points to education-focused robotics firms fragmenting into vertical businesses rather than staying generalist toy makers.
The trend: Toy robotics companies are trading volatile holiday-retail sales for steadier education and STEM budgets, using layoffs, targeted raises, and small acquisitions to make the switch.