49-Year-Old Mom Turned Her Homemade Kids’ Toy Store Into A Business — Now It’s Making $226 Million a Year – NBC 5 Dallas-Fort Worth

When Jessica Rolph gave birth to her first child in June 2010, she wanted to know everything about his developing brain.

“There’s a lot of expertise involved in understanding the curriculum for 5- and 6-year-olds when they start school,” says Rolph, 49. “But what about the early years?”

She turned to early childhood development research, trying to understand how the flashing lights and sounds of baby toys affected her young son’s neural pathways, but she couldn’t find an answer.

That experience led her and her friend Roderick Morris to start Lovevery in 2015, a Boise, Idaho-based company that produces developmentally appropriate toys and play items for children ages 0 to 5, as well as educational guides for parents.

The company had revenue of $226 million last year, according to documents reviewed by CNBC Make It. Rolph says he aims to reach profitability this year.

Lovevery toys are inspired by toys Rolph made for her son, each designed to support a specific developmental stage. She recalls asking her husband to buy a piece of PVC pipe from a hardware store, for example, so they could cut off a section and watch their son insert something into the pipe. The goal was to deepen his understanding of the concept of objects containing other objects.

“It was so empowering. It was so exciting to see him light up as I gave him these experiences,” Rolph says.

Here’s how she and Morris got their start.

Single product launch

Before starting Lovevery, Rolph co-founded organic baby food company Happy Family in 2005. She had been friends with Morris — who had a background in helping grow tech startups, including a stint as chief marketing and operations officer at energy company Opower — for more than a decade.

“We never thought of (Lovevery) as just a toy company,” says Morris, 52. “We thought of it as a platform to help parents and kids work together on early childhood.”

The duo decided to start simple, focusing on one product: a play gym. It was the most popular item on most people’s baby gift lists, but many of the options looked “trash,” Rolph says. “We wanted it to be beautiful and fit the aesthetic of a family’s home. And of course, we wanted it to be developmental—and really build on those micro-stages of the first 12 weeks.”

They relied on $2 million in seed funding to develop the Lovevery gym for nearly two years, finally launching it in 2017. At $140, it was about three times the price of the most expensive play mats on the market at the time, Rolph says. But it came with soft cotton shapes to grab, teethers to engage babies from their first tummy time to their first birthday, and a guide to each progressive stage of brain development.

According to a Lovevery spokesperson, it sold more products in its first year of launch than any other playground on Amazon.

“We thought at that value we could just do it, and we thought people would want it,” Rolph says. “It was a big risk. But it paid off.”

Adopting a subscription model

In 2018, Lovevery introduced subscription play sets for babies 0-12 months, priced at $80 every two months. The goal was to create an ongoing relationship with families: Trust us to stay up to date with our research, and we’ll regularly send you toys that match your child’s current stage of development.

Lovevery now sells subscription boxes for kids up to 5, each priced at an average of $40 per month. More than 350,000 people in 34 countries have signed up, accounting for 86% of the company’s revenue, a spokesperson says.

The high price is a function of quality, Morris adds, and Lovevery’s efforts to reduce costs include searching for cheaper producers as well as modifying the way the wood is cut for each product.

“In the beginning, we had a lot of pressure from investors to find ways to lower our product prices so we could get a bigger margin and make the business more profitable,” Morris says. “Instead, we focused on finding ways to lower our cost structure that didn’t affect the products at all.”

Customers seem unfazed. Those who make a purchase are more likely to return within the next two years than to rival stores KiwiCo and Little Passports, according to a 2021 Bloomberg Second Measure report.

Loyalty comes with praise and funding. Lovevery was named one of Fast Company’s Most Innovative Companies of 2024 in March. Meta CEO Mark Zuckerberg whose Chan Zuckerberg Initiative invested in the company, and NFL star Patrick Mahomes have shared photos of their children using Lovevery products.

The company’s total fundraising totals up to $132 million, including a $100 million round led by private equity firm The Chernin Group, Morris says. The co-founders maintain a controlling stake in the company, notes a Lovevery spokesperson.

And while customer growth is key—Lovevery needs scale to become profitable, Rolph says—he doesn’t plan to make any rash decisions at this point.

“We can’t rush this process,” Morris says. “We have to be as deliberate and obsessive as we need to be to have things that people love and that kids don’t get tired of playing with.”

Want to stop worrying about money? Sign up for CNBC’s new online course Achieve financial well-being: be happier, richer and more financially secure. We’ll teach you the psychology of money, how to manage stress and create healthy habits, and simple ways to increase your savings, get out of debt and invest for your future. Get started today and use code EARLYBIRD for an introductory 30% off through September 2, 2024.

Plus, sign up for the CNBC Make It newsletter to get advice and tips on how to achieve success in work, finances and life.