Gadget start-ups are a neat fit for investors

November 20, 2013 5:36 pm

Gadget start-ups are a neat fit for investors

By Tim Bradshaw in San Francisco

New electronics start-ups that aim to demystify how computers and gadgets are created are beginning to emerge from the “maker” movement of tech hobbyists. littleBits, which sells electronics modules such as lights and sensors that can be easily combined to create DIY gadgets, said on Wednesday it had raised $11.1m in new venture capital. The funds will help the New York-based company to expand its kits, which include a modular synthesiser in partnership with music company Korg and $99 “exploration” starter packs that include motors, buzzers and LEDs, all of which can be snapped together using magnets.“We’ve created this way that you can break down any device into its core parts and allow people with no background in engineering to reboot them and combine them and remix them and invent,” says Ayah Bdeir, founder of littleBits, which has already been featured in New York’s Museum of Modern Art. “It creates a world of inventors that can use electronics as easily as they can use apps.”

Meanwhile, Kano, a UK-based start-up, has raised more than $140,000 in crowdfunding in a matter of hours for its $99 kits for teaching people how to build and code a small computer, using the British-made Raspberry Pi mini computer.

“Our aspiration is creating something that unleashes what until now has been a fairly niche form of expression which is code and technology,” says Alex Klein, Kano’s co-founder.

“It’s about accessibility to all, whether they live in London or Nairobi – especially those who’ve been excluded by economics but also by fear and trepidation and buzzwords and jargon, and this attitude that technology is this geeky thing.”

Kano, which counts Index Ventures partner Saul Klein among its co-founders, has at its core the Raspberry Pi, a hackable, credit card-sized minicomputer which costs just $35 (£24).

Raspberry Pi’s creators said this week that it had sold 2m of the tiny computers – a figure the charity behind the open-computing device had not expected to surpass until next year.

Raspberry Pi and other low-cost DIY electronics platforms such as the Arduino have become a cornerstone of the so-called “maker movement”, which regularly attracts thousands of tech, art and design enthusiasts to Maker Faires around the world.

At these events, people who prefer to make their own gadgets than buy pre-packaged goods gather to buy components and showcase their creations.

“littleBits was born out of the maker movement,” says Ms Bdeir. “The genesis was all in open hardware. What we’re trying to do is make sure this doesn’t stay in a niche crowd . . . so that everyone can participate, whether you’re a kid or an engineer.”

littleBits was born out of the maker movement. The genesis was all in open hardware. What we’re trying to do is make sure this doesn’t stay in a niche crowd . . . so that everyone can participate, whether you’re a kid or an engineer

– Ayah Bdeir, founder

Both littleBits and Kano liken their products to Lego.

Kano launched its kit – which includes a Raspberry Pi, case, keyboard, customised Linux operating system and instruction book – on Kickstarter on Tuesday evening and surpassed its funding goal of $100,000 by Wednesday morning.

The campaign runs for a month and the kits will ship next year, when Kano plans to offer additional components to enable customers to build more sophisticated devices such as internet radios or robots.

The fundraisings come as some Silicon Valley investors begin to overcome a reticence to invest in hardware that has become entrenched in the past 15 years, when internet and software start-ups grew quickly and more cheaply.

Ms Bdeir says she saw “a lot” of resistance from investors. “There is some stigma around hardware companies – some of it is true, some of it is not,” she said, noting that companies can make money from hardware but that doing so requires more logistical infrastructure, such as shipping, dealing with customs authorities and warehouses, than a software business.

Jon Callaghan, a partner at True Ventures, which along with Foundry Group led littleBits’ latest funding round, said that the company taps into a “next generation of creativity, expressed in hardware” but also in virtual-world-building games such as Minecraft.

“There is an ethos of building now,” he said. “It’s a great example of the creativity and innovation that the maker movement is spawning products like this that are now mainstream.”