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How Sandbox Partners is scaling things up

Sandbox is uniting millions of millennial parents and their preschoolers by investing in digital edutainment brands like Tinybop and Hopster.
April 11, 2018

In just three years, UK-based new media investor Sandbox Partners (SBX) has secured a raft of acquisitions and minority stakes in leading digital kids brands including Tinybop, Hopster, Poptropica, SuperAwesome, Teachervision and Funbrain.

According to company co-founder and former Pearson exec Abhi Arya, SBX was launched to enable the development of online educational products that help today’s preschoolers acquire modern learning skills. And the investment firm is focused on changing the consumer priorities of millennial parents, too.

“We saw, with the exception of companies like Animal Jam and ABCmouse, that no one was looking to build scale in the early-learning space in a holistic way,” Arya says. To help digital kids companies expand globally, SBX began an aggressive acquisition and investment phase, offering companies expertise in monetization and scaling products in existing and emerging markets. Arya says funding is primarily raised from private investors and supported by a few corporate investments.

In May 2015, for example, SBX fully acquired Family Education Network (FEN)—the publisher of kids virtual world Poptropica—from US education and learning tech company Pearson, and rebranded it as FEN Learning. Other FEN assets wholly owned by SBX include Factmonster and Teachervision.

More recently, SBX took a minority stake in Tinybop, the New York-based developer of award-winning educational kids apps including The Human Body, The Robot Factory and Me. As Tinybop’s largest institutional shareholder, SBX is currently growing the company’s business and operations worldwide through strategic, commercial and operational support.

“Since we’re both an investor and operator with access to pipelines, we can help scale Tinybop and UK SVOD app Hopster,” says Arya. “At the same time, we can learn what those companies are doing or not doing right, and use that information for business growth, too.”

As SBX expands its global reach beyond 20 million kids, parents and teachers, Arya says some of the biggest challenges include staying on top of changing consumer patterns, ensuring its startups are well funded, and most importantly, having the right leadership talent in place.

Looking at monetization models across its businesses, SBX pursues everything from advertising and subscriptions, to school-based tech with Teachervision. “We also have a licensing model for Poptropica in education books,” Arya says. “The advantage is obviously diversification of revenue, but working with a lot of models also gives us a safety net. If ad revenue is down, then subscriptions might be up.”

Arya adds that most top apps are currently subscription-based, so the company is really looking to expedite its growth in that space. Looking forward, SBX is also keen to beef up its direct-to-consumer education services in the US and examine global B2B acquisition opportunities.

About The Author
Jeremy is the Features Editor of Kidscreen specializing in the content production, broadcasting and distribution aspects of the global children's entertainment industry. Contact Jeremy at jdickson@brunico.com.

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