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Beverly Hills children's party goods company P.S. XO announced yesterday that it has merged with Seedling, a New Zealand-based craft and toy company. The two, whose combined form will retain the Seedling title, have raised $7 million in new funding from Upfront Ventures and Greycroft Partners.
Reports state that the deal was a “merger of equals,” though no further financial terms have been disclosed.
Phoebe Hayman, Seedling’s founder, will maintain her role as CEO, while P.S. XO co-founder and former IAC executive Kara Nortman will serve as chairman. Soleil Moon Frye, who shares a co-founder credit with Nortman and has presided as Chief Creative Officer, will continue with creative contributions.
P.S. XO debuted in October, 2014 as the iOS app component of Moon Frye’s eponymous blog and e-commerce startup, Moonfrye. The startup, which sold products to parents and their children, initiated the partnership between Moon Frye and Nortman and raised $3.5 million in outside funding by October, 2014.
Nortman and Moon Frye didn’t wait long to seek expansion opportunities, and Seedling followed suit. “I’d always mix our P.S. XO products with Seedling’s,” Moon Frye told LA Business Journal. “It was just inspiring to see that we brought out so many wonderful qualities in each other.”
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Due to the compatible nature of each company’s products and demographic targeting, the founders broached the topic of a merger. P.S. XO specialized in social and mobile marketing strategies and planned to accelerate and diversify product development. Seedling, which sells hands-on craft kits and children’s novelty products, had strong roots in distribution, but it wanted to improve its digital presence. Realizing their complementary strengths, the two businesses decided to join forces.
“We are excited to join with P.S. XO and their exceptional tech team to find new ways to make meaningful innovation in the e-commerce space. We look forward to leveraging Seedling’s distribution partnerships to bring our new offerings to parents everywhere,” said Hayman in a statement.
P.S. XO’s product lineup, which comprises approximately 21 items, will soon be integrated into Seedling’s website. The merger will likely introduce Seedling’s products, which aren’t yet available via an app, into mobile platforms.
As part of the merger, Seedling’s U.S. office will relocate from Irvine to Los Angeles. Seedling will absorb 11 P.S. XO employees in the U.S, which will nearly double Seedling’s U.S. staff. The new company plans to expand to 25 or 30 in the U.S. (currently, it employs 35 in New Zealand).
The deal marks Seedling’s first outside investment and is expected to help the company reach its projected $10 million in sales this year.
