How CubCoats Transformed Into a Kids Toy Brand With an Upcoming Animated Series and a Cult Following

The young entrepreneurs behind a two-in-one plush and hoodie product called CubCoats admit they’re not exactly the crafty types. That may be why their first prototype was a stuffed elephant crudely attached to an old green J. Crew hoodie they had lying around.

“Our friend made it for us because we don’t sew,” said Spencer Markel, CubCoats co-founder. “It was a rough draft.”

More than 100 versions and a utility patent later, Markel and co-CEO Zac Park are on track to sell $10 million worth of the combination toy and jacket line they officially launched a year ago. Their first major advertising debuted recently, from viral mavens Harmon Brothers, with two long-form videos racking up 3 million-plus views in seven days on Facebook, Instagram and YouTube.

CubCoats, which began as direct-to-consumer in November 2017, has landed a distribution deal at more than 100 Nordstrom stores, premiering its first co-branded products from NBCUniversal, DreamWorks, Disney and Marvel this month. Included in the line are Mickey and Minnie Mouse, Spiderman, Darth Vader, Chewbacca, Black Panther, Trolls and Minions.

There are two recently opened pop-up shops in high-traffic malls in Los Angeles, where the company is based, with investor and fan Hilary Duff planning to appear at The Grove for holiday events.

The seasonal push comes on the heels of $5 million in investments in July from celebrity backers like Duff, Will Smith’s Dreamers Fund, Patrick Schwarzenegger and business execs such as Jen Rubio, co-founder of Away, Daniel and Michael Broukhim, creators of FabFitFun and the Harmon Brothers.

Markel and Park, millennials with no experience in the so-called rag trade, said they wanted to explore the hybrid category where they’d noticed that two-in-one products were trending. They also wanted to tap into the multi-billion-dollar plush and children’s apparel markets and create a must-have accessory for kids, hiring Mimi Chao as art director to perfect the cute animal-based line.

“We took a page from Transformers, one of our childhood favorites,” Markel, a former corporate lawyer, said. “We knew we had something when we showed the very first one to our CFO’s daughter, and it was like Christmas morning for her.”

Beyond a $40 combo coat and toy made from sustainable materials, the partners created a backstory for each character (like Kali the Kitty, Pimm the Puppy) to spark youngsters’ imaginations, build “an immersive universe” and spawn a new intellectual property.

Brands like American Girl and many others have followed a similar toy-to-entertainment path, which has influenced CubCoats’ own journey. The founders are working on an animated series for 2019, with plans to launch more products and branch further into partnerships. MLB, an early investor, will get co-branded items next year, as will other professional sports leagues and Hollywood films.

Park, an AKQA alum, said the brand has grown organically via social media and product demo videos created in-house, racking up tens of millions of views. There has been little paid media up until now. The first ad campaign happened after they sent the product to the Harmons, who invested in the company and collaborated with them on two adventure-themed hero spots.

“The videos show that when the kids put on the hoodies, they take on the characteristics of the animals,” Park said. “It’s a teaser into the future development of this property.”