Kano raises $28M as its kid-friendly computer kits hit 4,500 stores

Ingrid Lunden
Kano -- the startup that teaches kids (and adults) about computers and coding by way of a variety of do-it-yourself hardware building kits -- is announcing an important milestone in its growth today.

Kano -- the startup that teaches kids (and adults) about computers and coding by way of a variety of do-it-yourself hardware building kits -- is announcing an important milestone in its growth today.

The company has raised $28 million in funding, and ahead of the holidays, it will be using that investment to help spearhead a retail push in North America by getting the device into 4,500 stores, as well as move into new categories of computing and consumer technology to develop future products. These will include cameras, exploring ways to help people learn about AI, and virtual and augmented reality.

The growth comes at a time of significant momentum for the company, with 141,000 Kano devices connected to its network (but no detail on how many units the company has sold in total) since shipping its first device in September 2014. There have been some 227,000 apps written using those devices from budding developers in 86 countries, with the youngest coders coming in at six. Time engaged in Kano communities, the company says, averages at 13.5 hours in 30 days, on par with Snapchat.

Now with good usage metrics under its belt, Kano hopes it can boost the number of actual users by making it easier to get its hardware. The list of places where you can buy products like Kano's $249 build-it-yourself laptop will now include all of the Best Buys and Targets in North America, selected Walmart stores, Amazon, Barnes & Noble, Best Buy, Indigo, Microsoft, The Source and Toys R Us.

It's an impressive list, and ironically a far cry from where Kano is coming from. Currently, Kano's headquarters are modestly situated in what feels like a large-ish stockroom at the back of a bakery in London's East End, with a giant group meeting area being the first thing that greets you when you walk in, with stacks of empty (older version) Kano computer boxes forming the doorway and makeshift walls of a meeting room to one side.

Kano's offices feel rough and ready, a fitting location for a startup that is both trying to, in the words of CEO Alex Klein (who co-founded Kano with Yonatan Raz-Fridman and Saul Klein, the VC who happens also to be a relative of Alex's), "demystify" the computing experience, as well as to get people to think more about what goes into making technology work the way it does -- something that is becoming increasingly easy not to do, as computing becomes faster and a more seamless part of our lives.

In that regard, Kano not only goes against the grain of how consumers are interfacing with technology today, but also how many tech companies are formulated today.

"What we are doing here has not really been attempted for several decades," Klein said. "We are building a computing company end to end."

Klein describes Kano's mission as "80 percent software and 20 percent hardware" in terms of what ultimately gets put out and used by its customers. That emphasis on software is helpful in two ways. For one, i's a way to position how Kano might build out future business models around its software. It's also, potentially, a safeguard against some of the pitfalls of trying to build a consumer electronics company: as the saying goes, hardware is hard.

Another insurance around that is that Kano relies on third parties to build basic components. Tapping into the modern hardware supply chain, Kano's computers are powered by Raspberry-Pi computer boards, and screens, keyboards and other parts are sourced from manufacturers in China who are already making these elements.

On the software front, there will be more to come. Currently, users are able to upload scripts and programs that they write to work on Kano devices, and others are then in turn able to download and use these themselves. It seems ripe for a marketplace down the line, something that Klein said the company is considering as a "possibility", although for now, as it continues to grow, the idea is to keep the apps platform free to use.

The funding, a Series B, is being led by Thames Trust and Breyer Capital, with Index Ventures, the Stanford Engineering Venture Fund, LocalGlobe, Marc Benioff, John Makinson, Collaborative Fund, Triple Point Capital, and Barclays also participating. It brings the total raised by Kano to $45 million -- which also includes another traditional venture round of $15 million, as well as an earlier Kickstarter campaign that went viral, and Klein said the company is not disclosing its valuation with this round, but said that it's up from before.

One other aspect of raising money now and possibly looking to be aggressive in raising more in the future is to try to cement Kano's place as the go-to brand for computer kits, at a time when we are seeing a number of efforts emerge that are also picking up capital and also setting out to build products that make it fun and easy to learn more computer science and engineering skills.

And there are plenty of current and would-be competitors. Just earlier this week, for example, Wonder Workshop, which makes 'chatty robots' to learn about computers and coding, raised $41 million. And pi-top, another Raspberry-Pi-based computing startup out of London, recently released a DIY laptop where you the keyboard can slide out so that you can tinker with and continue to augment the inner workings of the machine.

"Kano has grown into a category leader, with hardware and software that prepares all ages for the future," said Jim Breyer, Founder and CEO of Breyer Capital in a statement. "The financing, expansion into mass retail, and new products will expose the unique Kano experience to millions more."