Months after securing $22 million in new funding, children’s audio platform Yoto has announced a $15 million funding package from UK bank HSBC.
UK-based Yoto says the new funding will free up working capital for the business, enabling it to expand into new markets. Yoto is currently operating in the US, UK, Canadian, Australian and New Zealand markets, along with Singapore and Hong Kong.
The company expects to increase exports by “almost 100%” and double its revenue as a result of the new funding, which comes from HSBC UK’s Growth Lending Fund.
“This funding provides a great leverage point to build on our rapid growth. We have ambitions to become truly global – supporting more communities around the world and providing high-quality, child-centric audio content that fosters creativity and independence in young listeners,” Yoto CFO Ben Averis said in a statement.
“We were presented with various funding opportunities and are glad to have chosen to partner with HSBC UK. The bank’s strong trade links will help us scale our manufacturing and deliver even greater value to our customers.”
The Yoto Player is a speaker that uses physical cards, called Yoto Cards, to play audio content such as a set of songs, an album, or an audiobook.
“This funding provides a great leverage point to build on our rapid growth. We have ambitions to become truly global…”
Ben Averis, Yoto
Ben Drury and Filip Denker founded Yoto in 2017 to develop a device that enables kids to access music and audio without being exposed to advertisements, unsuitable content or screen time.
The first model of the Yoto player, crowdfunded on Kickstarter, sold out in 2019. The second-generation Yoto Player launched in early 2020, and the portable Yoto Mini launched in late 2021.
The company describes itself as being “inspired by Montessori values, emphasizing children learning independently thanks to a product built for them, with no screens, no microphones and no adverts.”
In recent years, Yoto has signed licensing agreements with recording majors, including one with Universal Music Group, with Queen’s Greatest Hits Vol. 1 becoming the first album available on Yoto under that partnership.
Yoto has also signed deals with Warner Music Group, including one last year that made a kid-friendly selection of WMG’s pop, rock, and soul artists available on the platform.
Yoto says it has built a library of more than 1,200 Yoto Cards featuring content from partners including Disney, Penguin Random House, and Pottermore.
Earlier this year, Yoto secured a $22 million funding round, with half of that coming from the Chan Zuckerberg Initiative, a philanthropic investment fund founded by Mark Zuckerberg and his wife, Priscilla Chan.
As part of that investment, Vivian Wu, the fund’s managing partner, reportedly joined the board of Yoto.
“Yoto is a fast-growing company, with an innovative product that is seeing immense popularity in international markets,” said Aman Nirwal, Director at HSBC UK.
“We’re pleased to support Yoto with its strategic growth plans and are excited to see the business continue its success and reach even more families worldwide.”Music Business Worldwide