Kidtech startup SuperAwesome is now valued at $100+ million and profitable

Technology companies like Facebook and Google are scrambling to catch up to the fact that kids have joined a web originally built for adults, and are using it the way adults do — by liking and commenting, sharing, clicking through on personalized recommendations and viewing ads. But the technology underpinning apps and sites built for kids can’t operate the same way it does for the grown-ups. That’s where the company SuperAwesome comes in.

SuperAwesome, just less than five years old, has been tapping into the growing need for kid-friendly technology, including kid-safe advertising, social engagement tools, authentication and parental controls. Its clients include some of the biggest names in the children’s market, including Activision, Hasbro, Mattel, Cartoon Network, Spin Master, Nintendo, Bandai, WB, Shopkins maker Moose Toys and hundreds of others — many of which it can’t name for legal reasons.

Now, the company is turning a profit.

SuperAwesome says it hit profitability for the first time in Q4 2017, and has reached a booked revenue run-rate of $28 million, after seeing 70 percent growth year-over-year.

This year, it expects to grow 100 percent, with a revenue run rate of $50 million.

Sources close to the company put its valuation at north of $100 million, as a result.

The company says the shift to digital is driving its growth, as TV viewing is dropping at 10 to 20 percent per year, while kids’ digital budgets are growing at 25 percent year over year. At the same time, the kids brands and content owners are realizing that safety and privacy have to be a part of their web and mobile experiences.

SuperAwesome has flown under the radar a bit, and isn’t what you’d call a household name. That’s because its technology isn’t generally consumer-facing — it’s what’s powering the apps and websites that today’s kids are using, whether that’s a game like Mattel’s Barbie Fashion Closet or Monster High, Hasbro’s My Little Pony Friendship Club or a website from kids’ author Roald Dahl, to name a few.

Key to all these experiences is a technology platform that allows developers to build kid-safe apps and sites. That includes products like AwesomeAds, which ensures ads in the kids space aren’t tracking personal data and the ads are kid-appropriate; PopJam, a kid-safe social engagement platform that lets developers build experiences where kids can like, comment, share and remix online content; and Kids Web Services, tools that simplify building apps that require parental consent and oversight.

These sorts of tools are increasingly becoming critical to a web that’s waking up to the fact that the largest tech companies didn’t consider how many kids would be using their products. YouTube, for example, has been scrambling in recent months to combat the threats to kids on its video-sharing site, like inappropriate content targeted toward children, exploitive videos, haywire algorithms, dangerous memes, hate speech and more.

Meanwhile, kids are lying about their ages — sometimes with parental permission — to join social platforms originally built for the 13-and-up crowd, like Facebook, Instagram, Snapchat and Musical.ly.

“It’s very easy to come out and beat up Facebook and Google for some of this stuff, but the reality is that there’s no ecosystem there for developers who are creating content or building services specifically for kids. That’s why we started SuperAwesome,” says SuperAwesome’s CEO Dylan Collins.

Before SuperAwesome, Collins founded gaming platform Jolt, acquired by GameStop, and game technology provider DemonWare, acquired by Activision.

Other SuperAwesome execs have similar successful track records in terms of company-building. Managing director Max Bleyleben was COO at digital marketing agency Beamly, acquired by Coty, and a partner in European VC fund Kennet Partner. COO Kate O’Loughlin was previously SVP Media in adtech company Tapad, acquired by Telenor. Chief Strategy Officer Paul Nunn was previously the managing director at kids’ app maker Outfit7, acquired by China’s United Luck Group.

Today, the company’s 120-person staff also includes a full-time moderation team to review content before it goes public. A need to do more hands-on review, instead of leaving everything up to an algorithm, is something the larger companies have just woken up to, as well. For example, YouTube said it was expanding its moderation team to north of 10,000 people in the wake of the site’s numerous controversies.

SuperAwesome is much smaller than that, but it has understood the need to double-check kids’ content with a more hands-on approach for some time.

“The content created on [SuperAwesome’s] platform goes through two layers of moderation. It goes through our machine learning moderation. Then it goes through our 24/7 team of human moderators as well,” explains Collins. “With the kids’ audience, it doesn’t work to completely automate all this — you have to have human involvement.”

There are now tens of millions of pieces of content flowing through SuperAwesome’s platform every couple of weeks, to give you an idea of scale.

This online social space is something that kids’ brands want to enter, but safely and in compliance with U.S. and international laws around child protection, like COPPA and Europe’s GDPR-K.

Though SuperAwesome’s focus a couple of years ago was more about helping advertisers and marketers, today, two-thirds of SuperAwesome ads clients have since adopted its social engagement tools from PopJam. (A demonstration of this technology is also live in SuperAwesome’s own kids app by the same name.)

Now, SuperAwesome is leveraging its experience in the kids’ space to help YouTubers come into compliance with Google’s stricter rules, too, so they can ensure brands they’re “kid-safe.” SuperAwesome recently rolled out a content certification standard for under-13 YouTube influencers and those over 13 who target a very young audience with their videos.

This is something SuperAwesome’s brand customers requested, because they’re spending their ad dollars on YouTube – and sometimes finding their messages matched up with inappropriate content. The problem of toxic content on Facebook and Google could have a massive impact on the ad industry if it continues to go unchecked. For example, one of the world’s largest advertisers Unilever this month threatened to pull ads from Facebook and Google if they don’t address the problems with propaganda, hate speech and disturbing content aimed at children.

SuperAwesome’s new, voluntary certification for YouTubers takes into account the content the channel produces, their behavior on the screen, their recording practices, and much more.

“YouTube is not an under-13 platform, so their hands are kind of tied in terms of something like this,” says Collins. The company announced the certification earlier this month, and already has 35 YouTubers on board, representing 35 million subscribers and 8 to 9 billion monthly impressions. “There’s real momentum that’s happening with this,” he adds.

SuperAwesome believes it’s now poised to for rapid growth as more brands and businesses begin to address the needs of keeping kids safe online.

“Kidtech, as a category, has really just been invented in the past three or four years. No one thought they’d have to build specific technology for kids…this is problem that we’re starting to solve,” Collins says.

SuperAwesome has raised $28 million to date according to Crunchbase, including a $21 million Series B from Mayfair Equity Partners in mid-2017, which included Hoxton Ventures and Inspire Ventures. The company has no immediate plans to fundraise again.

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