The brick remains at the centre of LEGO’s brand. Since it was invented close to 90 years ago, a wealth of products – bricks in new shapes, digital add-ons, and even a blockbuster movie – have becomes staples within the creative world of LEGO.
In 2018, LEGO Ventures was founded in an effort to keep their bricks future-proof. Its aim is to invest in entrepreneurs, ideas, and startups that align with LEGO’s mission to give children worldwide high-quality creative learning and play experiences.
According to Alexis Horowitz-Burdick, managing director of LEGO Ventures: “We’re exploring the world of creativity, learning, and play. The LEGO company is 87 years old. At LEGO Ventures, we’re looking to the next century of play – how LEGO’s vision and mission can be adopted by entrepreneurs and how we can support them.”
Although LEGO’s mother company, KIRKBI is behind LEGO Ventures, the primary goal of investing in startups isn’t to add more capital to the foundation’s bank account.
LEGO Ventures: More partner than investor
When LEGO Ventures was launched last year, they carved out the following investment areas: education technology, 21st century skill development, new play spaces, and creative making.
As Horowitz-Burdick sees it, “The toy – the brick – is for creative making. It was developed with the goal of unlocking the creative superpowers of kids. This goal is shared by the startups we invest in, but their foundation can be both physical and digital.”
When a startup becomes part of LEGO Ventures’ portfolio, they don’t just gain access to capital. The venture arm has also tasked its “value creation team” with identifying how the two parties can help each other.
Horowitz-Burdick explained, “We onboard the startups and align expectations as to where we can help them to accelerate. We anticipate and discuss their challenges for the coming year and figure out where they can tap into the resources across LEGO entities.”
This ranges from accessing their extensive knowledge on how children play to solving more logistical issues like supply chain management.
Klang – a gaming studio based in Berlin that received an investment – is working with LEGO to grow the company in a sustainable way while their game is being built. Once their ambitious and futuristic game is completed, LEGO’s games division will come in handy.
“We want to invest in companies where we can support their growth while they contribute to the broader LEGO ecosystem. We want to be a strong partner to every company we are investing in. There is a lot of capital in the world, and our value proposition needs to be more than just money. We are looking to add value beyond the money we’re putting in,” Horowitz-Burdick explained.
Success is measured beyond capital
Investing in startups isn’t just looking at current trends and investing for a quick, lucrative exit. LEGO Ventures aims to find the right fit with their mission and brand.
In Horowitz-Burdick’s words: “LEGO is an incredible brand. We get to leverage that, and we want to protect it. LEGO means a lot to almost every entrepreneur we meet, and that’s amazing. It means entrepreneurs understand what LEGO is about.”
The focus of the return on investment is based more on strategy than finances.
“We bring LEGO’s core ethos into the fund, and one thing unique to LEGO is their partner-promise: the way we work with and treat partners. It has to be advantageous to both parties. The financial return is not our primary goal and not even our secondary goal. We’re not trying to make bad investments, but our investments are more strategic. We’re trying to learn the future of play and find new ventures to tap into that future,” Horowitz-Burdick observed.
LEGO’s portfolio company, Klang is showcasing a demo of its game at this years’ TechBBQ. There, LEGO Ventures will speed-date 15-25 startups within their categories to see if they are a potential fit for an investor partnership.
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