Hello Baby raised funding from Venture Club members
Hello Baby raised money from Venture Club: Riki Group (brands “Kikoriki”, “Babyriki”, “Fixies” and others) and business angels. Founders Vitaliy Urban and Tim Raiter speak on relaunching on US market and fundraising for a pivot.
Hello Baby 1.0
The project was launched for iOS in May 2015. It got very wide cover and organic growth for it’s niche, also appeared to be functionally the most full for family communication. Due to that reason Hello Baby is beloved by Apple, and not long ago it was also featured by Google.
Today Hello Baby is the most popular service on US and Russian market for saving the most precious moments of baby’s childhood. Besides data storage itself we have added several unique features: Stickers for photos, Printed Albums (by the way, the first automatically generated and personalised basing on baby’s data in the world), Daily Snapshot (take 1-second baby video a day).
But nevertheless, at the beginning it was not clear that the niche of baby memories is too narrow. At the same time Google made research of digital moms: due to it moms appeared to be the most active buyers in Internet, trendsetters, innovation likers, they spend a lot of time on searching goods and feedbacks.
But can you imagine how it happens now? Is there any Facebook for parents? No, they still have to chat on oldschool forums or in forum-like mobile apps. Not a single service has any useful baby data besides sex or age that can be hardly useful in some serious Big Data ecosystem.
We’ve decided to develop Hello Baby as the first complete parental assistant. Everything that happens with the baby in Hello Baby ecosystem is collected as pieces of precious data. What data we keep and use: content (analyzed by neural networks for detecting baby insights), milestones (the first step, word, trip — we have over 50, actively used by parents), places, measurements in dynamics (it’s just height+weight now, but we are already integrating smart gadgets), baby’s interests, family members. No worries: this data is available only inside the platform with no access to advertisers.
Hello Baby 2.0
With this insight we have passed through acceleration in BootUP Ventures, one of the top accelerators in Silicon Valley. We stayed in US for a year and learned a lot of insights and trends. For example, you can find Baby Registry on any big retailer’s website. Baby Registry is a Mom’s wishlist, where she can share baby’s private data. But it’s obvious that in such a format she will never tell real insights besides some basic moments, that will be used for creating “baby portrait”. No Big Data, no AI and ML, no nothing. And, of course, American designs and UX are traditionally ugly and inconvenient.
The next trend is using bots everywhere. These projects get large investments, great part of startup ideas presented on demo days in “Y-Combinator” and “500 Startups” are connected to bots.
Also it’s almost impossible to live in the US and ignore people under 35 saying “Facebook is the oldest website in the world. My Granny uses it. Facebook sucks. I love Snapchat”. It’s obvious that in couple of years, when Snap-gen will have babies, no one will visit oldschool Mommy forums, they will need something much more smart.
We’ve realized that we have the main part of future ecosystem, the best in the world (and particularly — in the US) storage of baby data that can serve as a great source for Big Data project. The challenge now is to use them smartly.
We have decided to transform our album into one-stop family ecosystem that can become the first smart parental assistant: with Big Data, neural networks, smart bots and machine learning. We have everything that trendy mommy can need: private baby album, public parental community, the most personalized market, Nearby service (relevant places and parents with similar kids near you), Health and gadgets integration. All technologies needed such as deep-linking and ready-to-use instruments for AI/ML (provided by Google) are already available.
Investments
It took over half a year to learn the market and present our new concept for investors in the US (Bay Area and NY). We need to mention that we’ve made a mistake: all money raised in the first round ($500K) we spent on the product, and all the users we have now (about 100K parents) came organically. But in the US not the product, but the audience is the king: if our product was 10 times simpler and the audience was 5 times bigger, we wouldn’t face any problems with raising the next round of investments. But as we presented a strong product (nobody had any doubt) with small amount of users, investors we slightly discouraged. In here you get the money, make a one-button simple product and spend the rest on marketing in order to get 1 mln users.
In general, most VCs believed in us, but they needed any facts that out new development model is correct — and we had no resources for that. It came clear that we’ve spent too much time on proving investors that Hello Baby is a project of nearest future. Language and cultural barriers also mattered.
We were in contact with Russian business angel Alexander Borodich who has been looking after the project. He never believed in our first concept of baby album. But when Hello Baby 2.0 was unvealed, he took us to Venture club, that in short terms raised all the necessary money (the sum is not public).
Riki group is a strong market member. We have planned a lot of activities with them, the first one is with brand new project “Babyriki”, that ideally fits our idea “for little ones”.
All the raised money will be used for platform growth, building strong dream team, working with baby professionals, project promotion on US and Russian markets. Also we are working with celebrity moms and we plan to start happy relationships with even more interesting moms and bloggers. After the next investment round (A-series) we plan to get a Hollywood Mama as a project ambassador (her personality is a secret now). This marketing strategy appeared to be much more effective for us then disgustingly expensive Facebook or Instagram ads.
Experts in Venture club:
From the investors’ side, Hello Baby has a clear strategy of growth, strong perspectives of product development, it has all chances to have a good venture history.
We believed in this project because it is the first ecosystem that collects such great amount of baby data, analyzes it with neural networks and machine learning for using it in their own directions: Parental community, the most personalized baby market, gadgets integration, smart bots implementation. The company has a strong team and work experience on US market (that is general for such services).
Tim Raiter:
“Riki group is a strategic partner that we’ve been looking for. We have similar target audience: trendy mommies with kids of up to 6 ages. Our goal is creating a mobile parental ecosystem that can help them become better parents and save time. We plan to cover all parental everyday spheres with raising a strategic partner in each sphere. One of the most important sides is education. Here we see the most logical synergy, as new Babyriki project is not just for entertainment, it’s a part of baby edutainment. We are facing a free and perspective market (from mobile point of view) that is eager for changes. We automatize everything that is connected to data upload, storage and processing, we create a public community, get baby insights with Machine Learning and collect unique Big Data that helps us give relevant content and recommendations. In other words, we are able to give and answer before our user puts a question.”
Vitaliy Urban:
“Our previous investment round had a goal to create the best service for family communication. And we succeeded: with almost no promotion budget we got our first 100 000 loyal users and featuring from Apple and Google. Now we are ready to rock baby market where we can see just oldschool forums with static information and ancient usability. We are the first to use AI и ML on this market, integrate smart gadgets, because we a re sure: Snapchat Generation is already here, forming brand new approach to parental experience, and in 3 years forums will be totally replaced by smart parental assistants.
By summer 2017 we plan to grow 5 times more, start strategic partnerships with moms-bloggers and 5 baby brands, finish general development of family platform. Also or new round investors faced us to general goals connected to main project metrics, after achieving these goals we will be able to raise the new investments round A in USA.
Hello Baby is a mobile-first family platform. Parents can keep best baby memories, find friends with the same interests and children on the same development stage, share experience, plan walks, purchase goods in the most personalized market. Platlorm can keep all the information on baby health with the help of both inner tracking systems and gadgets compatible with Hello Baby.
Today Hello Baby has over 100K organic installs all over the world. Over 3,5% users do in-app purchasing. In 2017 founders are planning to face the US market as the most perspective one with estimated as 22M users.
Venture club is a syndicate of business angels working with startups on seed rounds. In 2016 more than $10 mln have been raised by Venture club.
