Overview

Product Description

Fuhu Inc. was a designer and seller of cloud-served software, apps, and services dedicated to creating deep and engaging user experiences on a range of consumer devices for children. Fuhu's most well known product was its Nabi tablet, an Android-based tablet for kids. The device included parental controls and educational games that lined up with elementary school curriculum requirements.

Quick Stats

2008

Started in

Jan, 2016

Closed in

501-1000

Employee (s)

$64,750,000

Total Raised

Why did Fuhu fail?

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Evan Lee

Updated on 15 Aug, 2017

Overgrowth

Supply Chain Problems

In 2014, Fuhu was a leader among children's tablet companies and was growing at a meteoric pace. The company was twice named as Inc. Magazine's <a href="https://www.inc.com/lindsay-blakely/fuhu-bankruptcy-filing-mattel-deal.html target=" _blank"=""><a href="https://www.inc.com/lindsay-blakely/fuhu-bankruptcy-filing-mattel-deal.html">fastest growing</a></a> private company in the United States with a gross revenue of $196 million in 2013 and a three-year growth rate of 158,957 percent. However, Fuhu's astounding growth came with many difficulties and ultimately a just as astounding collapse.Riding off of the huge success of its Nabi children's tablet, Fuhu went through explosive&nbsp;(over)growth in 2012 and 2013. Founders Jim Mitchell and Robb Fujioka, looking to build the next great consumer electronics company, pushed unattainable revenue projections that extremely concerned Fuhu's accountants. Early models predicted Fuhu would grow to an impossible $800 million in <a href="https://www.inc.com/magazine/201609/lindsay-blakely-burt-helm/2016-inc5000-unraveling-of-fuhu.html target=" _blank"=""><a href="https://www.inc.com/magazine/201609/lindsay-blakely-burt-helm/2016-inc5000-unraveling-of-fuhu.html">revenue</a></a> in 2014 after doing $200 million the year before.&nbsp;As Fuhu's original Nabi tablet leveled off in sales, the company tried pushing new products to maintain its growth. These new products took the form of the DreamTablet and the Big Tab– both of which ended up as huge flops. With hundreds of thousands of tablets unsold, the company allegedly ran up a $100 million bill with the Chinese electronics manufacturer Foxconn. Eventually, Foxconn cut off Fuhu, causing major supply chain&nbsp;issues.&nbsp;Fuhu also suffered under the leadership of Fujioka. Fujioka ran his company as a "democratic dictatorship", in which he micromanaged projects and stifled creativity. Fujioka also populated the upper ranks of Fuhu with 30 of his friends and childhood pals in a group called "The Partnership". Members of "The Partnership" allegedly received special perks, which many of Fuhu's other employees found disheartening.Ultimately, with its poor leadership, shaky financials and money hemorrhaging, Fuhu declared bankruptcy in 2016. Children's toy maker Mattel bought Fuhu out of bankruptcy for $21.5 million.

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