Imagine having a hoodie that also doubles as a stuffed animal. Cubcoats is the children’s brand behind the 2-in-1 stuffed animals that transform into premium hoodies. The hoodies are a fan favorite among both children and parents with stars like Will Smith and Hilary Duff have having invested in the company. Cubcoats’ products truly transcend the boundaries between functionality and fun. Leveraging the power of media and storytelling, the brand is developing an immersive cartoon series, complete with proprietary characters like Kali the Kitty and Tomo the Tiger to really capitalize on the company’s following. These characters obviously each all have their own hoodies. Retailing for ~$50, hoodies are also available with your child’s favorite characters including Minnie Mouse, Black Panther, and Trolls.
La TechWatch spoke with founders Spencer Markel and Zac Park about the inspiration for the unique children’s brand, the company’s future plans, and its recent round of funding.
Who were your investors and how much did you raise?
Cubcoats raised its Seed round – $4.85M from strategic investors including: Major League Baseball, Hilary Duff, Patrick Schwarzenegger, Dreamers Fund founded by Will Smith and Japanese Soccer Star Keisuke Honda, Jen Rubio (Cofounder, Away), Daniel & Michael Broukhim (the cofounders of FabFitFun) and The Harmon Brothers (the agency behind the famous Purple Mattress, Chatbooks, Squatty Potty and Poo-Pourri videos).
Tell us about the product that Cubcoat offers.
A Cubcoat is a stuffed animal that magically unzips to become a premium children’s hoodie. Each of our animal-inspired stuffed animals or “Cubs” are based off an immersive Cubcoats universe we created with our Art Director, Mimi Chao – complete with a name and identity like – Kali the Kitty and Tomo, the tiger. We are in the process of developing whimsical content and a cartoon series based on our Cubs.
We recently launched licensed Cubcoats based on some of the most iconic, fan-favorite licensed characters.
What inspired you to start Cubcoats?
We are two big kids at heart and hit upon the idea through a mutual love of Transformers, as children, and Zac’s experience working on a Kickstarter campaign in the hoodie space.
We thought to ourselves: what can we create that would bring over a novel and sticky concept that would sell well to parents and create a lasting brand relationship with kids? We wanted a product that a child would get attached too, grow up with, and want to gift to their future kids.
How is Cubcoats different?
Cubcoats was the first to create and patent a stuffed animal that converts into a hoodie that still has dual utility.
What market is Cubcoats targeting and how big is it?
The market Cubcoats is targeting is the burgeoning children’s wear space, where parents are estimated to have spent more than $70.1B in the U.S. in 2017.
What’s your business model?
Cubcoats’ core business is direct to consumer e-commerce, although our first retail initiative is underway with Nordstrom (100+ stores) and a few holiday pop-ups. We are also developing a story and content around our Cubs which we plan to deploy in 2019.
What was the funding process like?
We were fortunate to receive strong initial support from friends, family, and colleagues while working through more than 100 prototypes. In addition, we secured a coveted utility patent around our product, and we were able to show strategic investors a novel product with a clear vision, which enabled a smooth fundraising process.
What are the biggest challenges that you faced while raising capital?
The biggest challenge is balancing the time required to prepare a very complete and impressive deck and meet with investors for the financing while operating a growing company.
What factors about your business led your investors to write the check?
Cubcoats is a novel, defensible consumer product, with a clear and strong vision, combined with a stellar team.
What are the milestones you plan to achieve in the next six months?
We plan to invest heavily in growing our DTC core business in order to continue to leverage strong partnerships in other distributions channels.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Invest heavily in relationships. Present a very thoughtful deck that you would invest in if it was your capital.
Invest heavily in relationships. Present a very thoughtful deck that you would invest in if it was your capital.
Where do you see the company going now over the near term?
In the very near term, we are focused on efficiently selling through all our inventory through the holiday season.
What’s your favorite outdoor activity in LA?
Does working outside on our office’s balcony count? We also enjoy hiking, biking around Venice, and the occasional beach day.
