Star Wars link helps Boulder-based Sphero complete $45 million funding round

BOULDER – Robotic toymaker Orbotix Inc., which does business as Sphero, announced Tuesday that it has completed a new $45 million funding round, a boost that comes as the company is expanding its headquarters in Boulder and expecting its employee count to grow by 25 percent by year’s end.

Sphero officials said that the company will use the new funding for product research, intellectual property development and to further global expansion. The company had filed a Form D with the Securities and Exchange Commission in recent weeks indicating that a large new round was coming. But at that point the company had disclosed only $11 million in the round.

Utah-based Mercato Partners led the round, with additional investors including the investment arm of The Walt Disney Co., as well as previous investors. Mercato co-founder and managing director Greg Warnock has joined Sphero’s board of directors as part of the deal.

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The funding round comes in the wake of news last month that Sphero would be making a toy version of the BB-8 droid that will appear in the new Star Wars movie when it is released in December. The toy will be released on Sept. 4, or “Force Friday,” along with other merchandise being released by Disney in relation to the movie. The deal to make that toy came out of connections Sphero officials made while participating in the Disney tech accelerator last year.

Sphero CEO Paul Berberian said in a phone interview Tuesday that the news of the new toy has been “huge” in gaining the company awareness, and that it also helped as Sphero officials were trying to raise their new funding.

“It’s a tremendous amount of wind in our sail when you have a product like this,” Berberian said. “The company was already doing well, and this just totally accelerates the business.”

Sphero doesn’t disclose revenue, but more growth figures to be on the way in addition to the bump expected when the Star Wars toy hits shelves. Berberian said the company would be releasing “a bunch of new products” in 2016 and 2017 that he couldn’t yet talk about specifically.

“If things take off faster than we anticipate, we’ll have the war chest to take advantage of the strong demand,” Berberian said of the new funding.

Founded in 2010 by robotics and software engineers Ian Bernstein and Adam Wilson, Orbotix has now raised about $80 million in venture capital. The new round follows a Series D round of more than $16 million last year.

The BB-8 droid will be the company’s third toy. Sphero’s first is a mobile-device-controlled robotic ball by the same name. Last fall, the company launched its second toy, Ollie, a cylinder-shaped robot that can race around at 15 miles per hour and perform tricks in the air.

“The connected play toy market has grown dramatically over the last several years and analysts expect that growth to continue,” Warnock said in a press release. “The Sphero team are experienced technologists, and the company is well-positioned to become the connected play leader of the toy industry.”

Sphero has 78 employees, roughly 60 or so of whom work at the Boulder headquarters. Berberian said he expects the company to be at 100 employees total by the end of the year

Sphero leases about 16,000 square feet of space at 4772 Walnut St., in the Tierra Centre Business Park. The company is currently building out adjacent space that had vacant that will bring Sphero’s headquarters to about 20,000 square feet. Berberian said the company is also looking at another space in the east part of town that, if the company gets it, could give Sphero room to grow to 150 to 200 employees in Boulder.

Berberian added that Sphero is looking at building a “living lab” that resembles a child’s bedroom or a living room to see how its robots work in a more domestic environment.

“We need the space so people can run robots up and down the hallway and do jumps and tricks and watch robots do autonomous behavior,” Berberian said.