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Slumberkins secures $2.8M in seed funding

Investments reflect rapid sales growth of children’s brand based in Vancouver

By , Columbian business reporter
Published:
5 Photos
A stack of Slumberkins books for children are pictured at the company's downtown Vancouver office on Sept. 11. (Amanda Cowan/The Columbian)
A stack of Slumberkins books for children are pictured at the company's downtown Vancouver office on Sept. 11. (Amanda Cowan/The Columbian) Photo Gallery

Last year it was hundreds of thousands. Now it’s millions.

Vancouver-based educational children’s brand Slumberkins announced in December that it had raised $2.8 million in a seed funding round, far outpacing all of the 4-year-old startup’s prior investment numbers.

Founders Kelly Oriard and Callie Christensen brought their fledgling brand to the ABC business pitch show “Shark Tank” in late 2017, at the time seeking $175,000 to boost manufacturing.

The sharks didn’t bite, but the company continued to grow on its own — and it had more luck with subsequent investors. The $2.8 million announced in December comes about a year after the company landed a $476,000 investment in late 2018.

Beyond ‘bootstrapping’

The progressively larger investments reflect the company’s sales growth. Slumberkins made $550,000 in sales in 2017, and that number more than doubled in 2018 — then doubled again last year. Christensen and Oriard said their goal is to continue that pattern for as long as possible, until the brand achieves household-name status.

The founding duo said the seven-figure funding infusion is a clear signal that Slumberkins has officially moved beyond the “bootstrapping” phase that took up the company’s first 3 1/2 years. Until recently, everything was built off a six-week cash flow forecast, Oriard said, and every decision felt like life-or-death.

Slumberkins is finally set up to begin mapping out its long-term growth strategy in detail, and the founders said they knew the next round of funding would play a critical role in building out the company’s structure — which is why they took their time to vet the interested parties.

“We’re in a position right now to call the shots about who we want in and how we structure it,” Oriard said.

The round was led by Seattle-based SeaChange Fund, which focuses on early-stage Pacific Northwest companies, and Chicago-based Listen. Christensen and Oriard said they were excited to land both investors; SeaChange has a reputation for championing Northwest businesses, Oriard said, and Listen is known for its expertise in bringing brands to consumers.

Expanding sales

The core Slumberkins products are cuddly stuffed animals paired with board books designed to teach young children specific emotional skills like relaxation, self-esteem and conflict resolution. For the first three years, Oriard and Christensen grew the product lineup by adding new creatures, but in the past year they’ve begun to branch out and explore new concepts.

One example is a set called “The Feels,” featuring a larger book designed to be used as a tool for educators to help children with emotional identification.

Looking to 2020, Oriard said she wants to push further into that space, developing more tools that can be used at schools. But development of the original home tool character lineup continues too — the company recently released another creature called Honey Bear, which focused on gratitude.

“It’s actually our fastest-selling creature,” Oriard said.

The company managed to double both its sales and its customer base in 2019, Oriard said, and they’ve set the same goal for 2020. The strategy will continue as well: Slumberkins brings in about 90 percent of its revenue through direct-to-consumer sales, Christensen said, and the founders are happy with that model.

Most of the sales continue to be driven by parents who find the brand through its online communities, particularly the Slumberkins Facebook group, which now numbers more than 12,000 members.

The major role of the group gives Oriard and Christensen a connection to their consumers, one which they can constantly tap into when developing ideas for new products. The company has grown to 18 employees, up from 11 a year ago, and the roster now includes a dedicated social media team — although Christensen said the founders continue to take the time to connect with the group themselves.

“We’re still engaging with that community daily,” she said.

Growing conversation

Looking beyond the consumer product side of things, Oriard and Christensen said they want to put a greater focus on what they describe as the company’s core mission of emotional wellness.

The company has begun to explore partnerships with schools and other agencies to provide Slumberkins products as educational resources. One of the first partnerships was with the Portland-based Doughy Center last year, a collaboration which led to the creation of Sprite, a Slumberkins doll and book intended to teach children how to process feelings of grief and loss.

That was followed up with the Give a Fox campaign in partnership with Vancouver-based LSW Architects. The campaign raised money for the Family Community Resource Centers in Clark County and provided elementary school students facing homelessness with a Fox plush toy and board book, designed to build emotional skills related to family changes.

Oriard said she’s seen a growing mainstream public conversation about mental health, and she and Christensen hope that Slumberkins will be able to join and contribute to it, in part by pursuing more school partnerships to provide teachers with emotional education tools.

TV show

One additional Slumberkins project has been quietly simmering throughout the past year: A potential Slumberkins TV show produced in collaboration with the Jim Henson Company, best known for creating the Muppets.

Christensen and Oriard landed the deal in 2018. The project was in the early conceptual phase a year ago, experimenting with the types of shows that could be created and how the Slumberkins creatures might be reimagined as puppets or cartoons, but now things have advanced to the final stages of script development.

Christensen and Oriard said they still can’t discuss the specifics of what they’re planning, but they hope to be able to share more in the next few months.

The process has at times felt slow compared with the pace of the company’s other projects, Christensen said, but by showbiz standards, it’s coming together pretty quickly.

“It’s a larger process than I think we ever anticipated it being, but it’s been great,” Christensen said.

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