Sesame Launches A Venture Arm To Invest In Startups That Help Kids

Its partner, the Collaborative Fund, is an early investor in Lyft and Kickstarter.

Sesame Launches A Venture Arm To Invest In Startups That Help Kids
Suki Lopez with characters from Sesame Street [Photos: courtesy of HBO]

In 1966, Sesame Street’s founders wondered whether the prevailing entertainment technology of the time, television, could be used to educate young children. They got their first chance to test the theory when the first show aired in 1969, and now, 45 years and more than 1,000 research studies later, the answer is clearly “yes.”


But there is a new prevailing technology on the horizon. While Americans still spend more time watching television than engaging in any other leisure activity, time spent on the computer and on devices is increasing. According to Sesame Workshop, the nonprofit that produces Sesame Street, about two-thirds of kids who watch its show first access it not through a traditional television channel, but through an on-demand source like the PBS Kids Video App, Sesame Street‘s YouTube channel, or HBO GO (the nonprofit and the cable network recently launched a five-year partnership). That means Sesame’s mission of helping kids grow smarter, stronger, and kinder is now competing in a very different media landscape than the one into which it was born.

Suki Lopez and Alan Cumming on Sesame Street

Just as Sesame Street’s founders once saw an opening for education in television, Sesame Workshop now sees an untapped opportunity in smartphones and tablets. “Television isn’t going away,” says Sesame Workshop CEO and President Jeffrey Dunn, who joined Sesame Workshop from HIT Entertainment, which owns Thomas & Friends, in 2014. “The kids who watch it, we can still have an impact with, but if we want to have an impact in the future to the same extent we had one in the past, we and others are going to have to make a much bigger foray into the digital world than has been made.”

Jeffrey DunnPhoto: Gil Vaknin

That transition, however, is easier said than done for a nonprofit organization with limited resources. “You have to get creative,” Dunn says. “And one of the ways to get creative is to not try to do everything yourself.”

And so, on Monday, Sesame Workshop announced Sesame Ventures, an internal team that will partner with venture capital firms to make investments in for-profit startups that support its mission. Its first partner is Collaborative Fund, an early stage investor in startups like Lyft and Kickstarter. Together they will manage a new $10 million fund called Collab+Sesame Fund.

In addition to financial backing, entrepreneurs who receive funding will be paired with Sesame executives as mentors. They’ll also have the option to use Sesame Street characters and branding, though Dunn says this will not be a precondition for accepting an investment. “We’re not doing this to extend the brand,” he said. “We’re doing this to help kids.”

Though Dunn said he had no specific startups in mind, he said examples he could imagine would be companies that encourage healthy habits related to eating and exercise, or companies that focus on the social and emotional development of kids, either through technology-based games or learning products. Craig Shapiro, the founder of the Collaborative Fund (which has more than $100 million in assets under management), was hopeful that Sesame Workshop’s involvement would be a draw for these companies. “The resources that the Workshop brings, whether around efficacy or research or distribution or marketing, I think is extremely compelling,” he said. Blake Mycoskie, the founder of Toms Shoes and an investor in the Collaborative Fund, says that Sesame Workshop offers its partners expertise in research, extensive media savvy, and global reach. “What really stands out is that their brand is trusted and also resonates with parents and kids around the world,” he says.

Craig Shapiro

Sesame has in the past similarly used partnerships to expand its influence on educational television. In 1999, it teamed up with Nickelodeon to launch Noggin, the fist all-educational cable channel for children. Then, in 2005, it partnered with PBS, HIT Television Ventures, and NBCUniversal Cable Entertainment Group to launch Sprout, a cable network aimed at preschoolers. It sold its stake in Noggin in 2002 and its stake in Sprout in 2012.

The nonprofit is now using some of the money from those ventures to seed Collab+Sesame.

“Think of a stone in the pond,” Dunn says. “The ripple is a lot bigger. This is all about the ripple.”

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About the author

Sarah Kessler is a senior writer at Fast Company, where she writes about the on-demand/gig/sharing "economies" and the future of work.