Startmate’s Ninja Blocks raises $1 million on three-week US tour

Startmate participant Ninja Blocks will return to Australia with very full pockets after securing $1 million from a group of high-profile investors, most of whom are US-based Australians.

Ninja Blocks, founded by husband-and-wife team Marcus and Madeline Schappi along with Peter Moore, is a hardware and software start-up “bringing the Internet of Things to the masses”.

The Ninja Block is a hardware device that detects changes in the physical environment and wirelessly sends the information to the online Ninja Cloud.

The Ninja Cloud is a set of software applications that allow users to control wireless-enabled devices and appliances, or upload content to social media.

In January, Ninja Blocks was selected as one of eight start-ups – from a pool of more than 160 – to participate in the 2012 program of mentor-driven seed fund Startmate.

Each start-up received $25,000 from Startmate in return for a 7.5% stake in their business.

The start-ups also embarked on a three-week tour to the United States, which involved pitches with Silicon Valley and New York investors.

It was on this tour that Ninja Blocks secured $1 million.

The funding came from eight angel investors and two venture capital firms, including Guitar Hero founder Kai Huang, and Atlassian founders Mike Cannon-Brookes and Scott Farquhar.

It’s worth noting US-based Australian investors made up three quarters of the angel funding.

Marcus Schappi, who is still overseas and could not be reached for comment, told ITPro there is money to be made in the US, but you must be able to mobilise it.

“They’re very gung-ho in the US and more realistic as to how start-ups work. Over here it’s ‘Do a big 20-page business plan and present that to somebody’,” Schappi said.

The Ninja Blocks technology holds plenty of promise. After being accepted into Startmate, Schappi turned to US-based crowdfunding platform Kickstarter in a bid to raise additional funds.

In just one weekend, Ninja Blocks smashed its $24,000 target.

In the end, the campaign generated more than $102,000.

“Kickstarter was a great way to fund our product and do so in a way that meant we didn’t give up any equity,” Schappi told StartupSmart in February.

Schappi said the funding would be used to manufacture the product and create new channels.

Last week, Marcus, Madeline and Moore shipped the first batch of 650 Ninja Blocks sold via the Kickstarter campaign, according to an article in The Sydney Morning Herald.

The gadget’s electronics boards are soldered and assembled by hand in the company’s offices at the Australian Technology Park in Sydney.

The plastic cases are manufactured at Schappi’s home by Madeline where three 3D printers run 24 hours a day. One case is printed every hour.

Ninja Blocks has already established relationships with manufacturers to produce large quantities of the device.

Schappi said distributors are keen to make the device widely available in retail outlets.