Froggie has expressive eyes, a sweet smile, and a fluffy green body optimized for snuggling. He’s also got kidneys, intestines, and a heart—all made of felt—because he’s designed to be dissected. Now, this might sound like a bizarre genetic engineering project, but the reality is much more wholesome: Froggie is for kids, the star of the Froggie Dissection Lab made by KiwiCo, a STEM-based toy and activity brand. And Froggie isn’t an anomaly; he’s a prime example of what KiwiCo does. The company frequently takes educational subjects and distills them down to their most playful essence, making angler fish or science experiments (like frog dissections) into toys that kids want to be near. “In part, I was personally motivated to start [KiwiCo] when my two older kids were almost three and five,” said Sandra Oh Lin, KiwiCo CEO and founder. “I really wanted them to have these hands-on experiences. It was important to me that they felt they had the agency to create…The idea of having kids who are empowered to feel they can innovate, I think, is really important. How cool is it that you know you’re able to create something out of seemingly nothing?” That’s what Lin wants kids to feel when they succeed in building the Light-Up Haunted House or the Walking Robot. But that’s also what Lin has done with KiwiCo, building something out of nothing, weathering a deluge of investor rejections and the direct-to-consumer downturn of recent years. The company has been historically sparse in the metrics it discloses, until now: Since its 2011 founding, KiwiCo has generated more than $1 billion in revenue, Fortune has exclusively learned. In that time, the company has shipped more than 50 million crates to more than 40 countries, and throughout its lifespan has designed north of 1,500 products and activities. (The company declined to disclose annual revenue.)As many consumer-focused startups have struggled, KiwiCo has generated an operating profit for seven years. The company has confirmed to Fortune that it is projected to see double-digit revenue growth in 2025. KiwiCo has also raised only $10 million in venture backing (including from First Round Capital and Forerunner Ventures), and the last round the company raised was a Series A in 2015. “We’ve been fortunate that we’ve been able to fund our own growth [for years],” said Lin. It’s an impressive trajectory for a story that started with Lin—a mom with credentials, but a mom nonetheless—feeling out of place. “I was the only mini-van in the parking lot on Sand Hill,” she told Fortune. “I was able to talk to and build credibility because I had worked at PayPal and at eBay, I’d gone to business school…But I think it was a real ding that I worked on something that was for kids. It’s an interesting part of the story that I’ve kind of tucked away.”OMERS Ventures senior managing partner (and KiwiCo board member, who invested back when he was at Comcast Ventures) Michael Yang first met Lin when the company was still “a minivan in her garage with supplies.” He was struck by how Lin was tapping into something slightly rebellious. “You could see she was clearly the cool mom on the block when she created her own arts and crafts pseudo-crates for neighborhood kids,” said Yang. “I just thought, ‘Man, this is a throwback to a different era.’ It was such counter-programming. This was the early 2010s, when the iPad was on the rise and people were shoving iPads in front of their kids, saying ‘download a game, entertain yourself.’ So this was a little bit of pushback on some of that movement.”KiwiCo both is and isn’t a venture story, I think. Though VC money got KiwiCo started, it hasn’t fueled the company for almost a decade.“It got super tough,” said Yang. “She never raised more than a seed and Series A, and had to make it her own…This is, by far, my longest-standing board and, yes, goes to show that private companies are staying private longer, for sure. But I think it’s also a story of personal fortitude, resilience, doggedness to the vision—and, of course, execution on that vision.”2024 has been a busy year for KiwiCo. The company recently unveiled a new take on its central subscription model, KiwiCo Clubs, which features a curated progression of activities and a soon-to-be-launched digital platform. KiwiCo has also been growing its education business, which has served almost 10,000 organizations, and this year established publishing division KiwiCo Press as its own vertical, breaking it off from its previous subscription fold-in. (The publishing unit has sold more than five million books, KiwiCo says.)The company may have started as direct-to-consumer, but decidedly isn’t anymore—in July, KiwiCo expanded into brick-and-mortar retail in Target and Barnes & Noble. Is there anything we can learn about DTC from KiwiCo? Yang says yes: As the traditional DTC playbook becomes more difficult and expensive, DTC companies now have to get more creative and put in more hard work to attract and retain customers in a more competitive and pricey landscape. But there are also new ideas and models emerging that Yang thinks KiwiCo could be primed to capitalize on down the line.“Just think of all the rich IP that speaks to this demographic of kids, and if you have crates and projects that are in line with that,” he said. “Then, you start looking at what Mattel did with Barbie, what Hasbro did with Transformers, and so on.”There’s one more obvious question: How does KiwiCo keep making so many clever toys at scale? I’ve been to their office, and it’s not all that big. But it is a place centered on play: When I visited, I saw dozens of kids play-testing—hanging out in classroom-like spaces, spinning tops and playing with foam archery sets. Lin and I stood, as she watched for delight. And it’s not always the things you expect. Nolan, who’s 12 and from Orange County, told me (with his parents’ permission) via email: “My favorite project is the safe I built—I still use it to store my stuff!”I asked Froggie’s designer, senior manager of product strategy Rebekah Winegarner, about the design process and she told me about fast timelines frequently limited by the challenges of building a physical product. (“You can’t make paint dry faster, but we’re working on it,” she laughed.) But it seems like one of the key rules is that, if you’re not delighted, then the kids won’t be either. “If it’s something worth doing well, it’s always going to be kind of hard and unexpected,” said Winegarner. “But it’s always worth putting your heart and soul into.”I was breathlessly charmed by Froggie when I first saw him. I’ve been trying to figure out why, and this is the closest I’ve come to an answer: It takes time and care to turn something traditionally considered educational and gross into something lovable. It takes a special person to look at something weird, gruesome, or boring and to see something playful. It’s a world view where cuteness is a matter of perspective, even frog dissections can be sweet, and everything that kids touch deserves to be awesome, for them and for us. “We have a very high-quality bar that includes the delight piece,” said Lin. “We call it ‘whoa, awesome.’ That’s our brand attribute.”And Froggie did make me say, “whoa, awesome.” Froggie’s been through a lot of iterations since he first was designed in 2019. His body size and arm thickness have changed, his closures are now buttons, and his intestinal pom-poms have been adjusted. Save for the innard pom-poms, you could say the same about KiwiCo over the last 13 years. But today, both are in Target. And I like to imagine that in a Target somewhere right now, there’s a kid falling in love with Froggie’s eyes, who will take the time to gently open him up, and look inside. ICYMI…Khosla Ventures has reportedly raised $405 million through an SPV for OpenAI. Hello from Laguna Niguel…Running KiwiCo’s story today felt right, because Fortune’s Most Powerful Women Summit kicks off today at the Ritz-Carlton in Laguna Niguel. I’ll be moderating conversations with, among others, Ellevest CEO Sallie Krawcheck, Fannie Mae CEO Priscilla Almodovar, and Director of the United States Patent and Trademark Office Kathi Vidal. I’ll share the livestreams on social, and would love to hear what you think!See you tomorrow,Allie GarfinkleTwitter: @agarfinksEmail: alexandra.garfinkle@fortune.comSubmit a deal for the Term Sheet newsletter here.Nina Ajemian curated the deals section of today’s newsletter.VENTURE DEALS- Numeric, a San Francisco-based AI accounting automation platform, raised $28 million in Series A funding. Menlo Ventures led the round and was joined by IVP and Socii Capital, existing investors Founders Fund, 8VC, Long Journey, and others.- Ithaca, a San Francisco-based open source tools developer, raised $20 million in funding from Paradigm.- Constellation Technologies & Operations, a Paris-based satellite constellation developer, raised €9.3 million ($10.2 million) in funding from Expansion, Bpifrance, and others.PRIVATE EQUITY- Warburg Pincus acquired a minority stake in Contabilizei, a São Paulo-based accounting firm, for $125 million.- Accel-KKR acquired a majority stake and Arctos Partners acquired a minority stake in LeagueApps, a New York City-based youth sports management platform. Financial terms were not disclosed.- Alliance Electronics, backed by Waterland Private Equity, acquired TXCube, a Paris-based electronic products designer and manufacturer. Financial terms were not disclosed.OTHER- Guild agreed to acquire Nomadic Learning, a New York City-based digital academy company for organizations. Financial terms were not disclosed.IPOS- Upstream Bio, a Waltham, Mass.-based respiratory disorder-focused biotech company, raised $255 million in an offering of 15 million shares at $17 on the Nasdaq. The company posted $2 million in revenue for the year ending June 30, 2024. OrbiMed, AI Upstream, Altshuler Shaham Provident Fund and Pension, Decheng Capital Global Life Sciences Fund, TCG Crossover Fund, HBM Healthcare Investments, Maruho Deutschland, Enavate Sciences, Samsara BioCapital, Omega Fund, BCLS Fund, and Venrock Healthcare Capital Partners back the company.- Ceribell, a Sunnyvale, Calif.-based medical technology for neurological conditions company, raised $180 million in an offering of 10.6 million shares priced at $17 on the Nasdaq. The company posted $54 million in revenue for the year ending June 30, 2024. The Rise Fund Clearthought, The Global Value Investment Portfolio Management, Longitude Venture Partners IV, ABG WTT-Ceribell, Red Tree Venture Fund, and Optimas Capital Partners Fund back the company.
