Amazon invests in Hatch Baby, launches Baby Skill Activity API as it eyes up the next generation of parenting products

Amazon today is one of the biggest retailers of gear for babies and other parenting aides, and today the company is taking another two steps into that business and how it might develop in the future.

Amazon today announced that it would be launching a new Baby Skill Activity API, so that baby apps and baby care devices can get updated and checked through voice commands, by way of Alexa and Alexa-powered devices. Available initially in the US, initial skills will include the ability to track weight, sleep, diaper changes and feeding, with more to be added down the line.

Additionally, Amazon is taking an investment in Hatch Baby, the startup behind the Grow connected baby changing mat, the Rest children’s sleep-regulating light, and a service that offers Q&A with childcare professionals. Alongside Baby Connect and Wildflower Health, Hatch Baby is among the first three partners developing skills using the new Baby Skill Activity API.

Ann Crady Weiss, the co-founder and CEO of Hatch Baby, said in an interview that the funding is part of a strategic partnership between Amazon and her company that will include Hatch developing content for Amazon’s Alexa voice-based interactive service — the funding is coming from Amazon’s Alexa Fund — as well as working longer-term on hardware and other initiatives.

The financial terms of Amazon’s investment are not being disclosed — the Alexa Fund, Amazon’s $200 million-or-so corporate venture fund focused on investing in startups strategic to Amazon’s ambitions in voice services and other new areas of business, generally does not disclose stakes.

Weiss did confirm that the investment was in addition to other funding that the startup has raised to date — $18.7 million to date, with its last valuation around $36.5 million — from investors that include True Ventures (where she is a partner), Shea Ventures, Geoff Ralston and Chris Sacca (who invested in Hatch after it appeared on Shark Tank). And it has come as Hatch is working on its next round of funding.

“Amazon is clearly an incredible force when it comes to everything consumer internet… so when they came calling, we were very eager to have them participate as a strategic investor,” she said.

(Weiss herself is a partner at True, and a repeat entrepreneur, having sold her previous startup, a parenting blog called Maya’s Mom, to Johnson & Johnson-owned BabyCenter in 2007.)

For Amazon, the deal with Hatch will give it a stronger link to one of the bigger startups targeting new parents.

Hatch had already developed some content for Alexa — and now, its Alexa Skill includes the ability to track diaper changes, nursing sessions, bottle feeds, sleeps and a baby’s weight — but the investment will secure Hatch’s commitment to invest in and expand that functionality as part of a bigger push that Amazon is making into developing Skills specifically tailored to parents.

“The Alexa Fund was created to support companies embracing voice technology and exploring new and compelling uses for Alexa,” said Paul Bernard, director of the Alexa Fund, in a statement. “We see parenting and health and wellness as two areas where voice can make customers’ lives simpler, and Hatch Baby has a clear vision of how Alexa and other Amazon services can help them better support parents. We’re excited to give them the access and resources they need to expand their skill for Alexa and explore further integrations across Amazon.”

What Amazon is hoping to build up with expanded parenting skills in Alexa is more engagement from parents.

In fact, its interest in building up parenting skills gives a glimpse into how the e-commerce giant links its voice-based activities with overall engagement and purchasing on its platform: the more that people find Amazon to be a useful platform for all things parenting — including advice and enhanced voice-based features for products people already own — the more likely they will be to use and trust Amazon for making more baby- and child-related purchases big and small. 

Today, Amazon already has a big business in baby and childcare goods. After streamlining its own storefront strategy by shutting down the less profitable Diapers.com, today Amazon sells a significant range of everyday products. That is led by its own Amazon Elements line — and when I say “led” I mean it literally: it’s the first brand Amazon shows you. Elements made its debut in 2014 with baby wipes and diapers and it now accounts for 15 percent of all baby wipes sales on the platform, outpacing Huggies at 11 percent, according to figures from market research firm 1010data.

Amazon also sells a wide range of other items that might be purchased less frequently but represent higher gross merchandise value, such as strollers and other travel gear, food-related appliances and other accessories, toys, apparel, connected scales and so on.

Alongside this — and because of that breadth — the company also runs one of the most popular baby registry services. Registries are a way for people to tag items in a wish list of what they would like to have, and for friends and family to buy all that for them. They become a very effective honeypot not just for people amassing long lists of things they would like to own without buying them, but then signalling to many others to buy on their behalf.

Getting promoted better in the baby registry was one reason Weiss said her company wanted to work more closely with Amazon. In turn, it’s providing more content to keep parents tied into using Amazon as their go-to platform for all things parenting.

“Amazon typically do a great job with shopping, but not with engagement. We are interested as a registry partner for us to get more visibility, and they are interested in us as partner to help engage moms and dads beyond the sale,” Weiss said.

But while Alexa skills may be the order of the day, this is not the only area where Amazon and Hatch might collaborate in the future.

Amazon has tapped other interesting hardware makers who first became connected to the company by way of the Alexa Fund. Perhaps most notably, it acquired smart doorbell maker Ring last year after initially investing in it.

“We believe very much will continue to create hardware,” Weiss said. “Our philosophy is to create better versions of the things people already use, and our roadmap is very consistent with that.” On the subject of how it might work with Amazon on that, all she would say is that “it is something we have engaged with Amazon on, and have been impressed about the quality of exchange with its experts.”

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