Back in January, 2017 Funko, then a largely under-the-radar collectibles company, predicted that it would hit $1 billion in revenue within five years.
Funko Headquarters in Everett, WA
Since then, the Everett, WA based company has gone public, recovered from what was described as the “worst first-day return for an IPO in 17 years”, scored licensing deals with some of the hottest television, movie, and gaming properties, landed a starring role in the Macy’s Day parade, and branched into new product categories like apparel, and NFTs, and added new licensing partnerships in anime, sports, and music.
Oh, and along the way they also achieved that billion dollar goal. This month they reported net sales of $1.029 billion for fiscal 2021.
Funko is starting the next phase of its life as a billion dollar-plus company with projections of 20 to 25% growth this year, a four-part plan for continued growth, a number of protective moats that guard it from encroachment by competitors, and a new CEO who is confident that the best of Funko is yet to come.
Funko CEO Andrew Perlmutter
“It is an exciting time for the company,” said new CEO Andrew Perlmutter. “We think we know what big is, and then we’re bigger.”
In the toy business, Funko still is relatively small compared to Hasbro HAS -0.3%, with revenues of $6.4 billion last year, and Mattel MAT +0.2% at $5.4 billion. But in the pop culture space, Funko is a giant with little competition, and with the potential to catch up to the top toy players.
Funko Chief Creative Officer, Brian Mariotti
Brian Mariotti, who bought Funko in 2005, back when it was a seven-year-old maker of bobblehead dolls, stepped down as CEO in January, taking on a new role of chief creative officer as part of a well-organized transition plan.
Mariotti is credited with steering the company to the place where almost every movie star and celebrity wants to see themselves as a Funko figure.
“Everybody wants to be a Pop! Vinyl figure,” said James Zahn, deputy editor of the Toy Book, referring to the Funko collectible figures known for their over-sized heads and their large, round eyes. “Actors, celebrities and musicians now look at it as a huge feather in the cap,” Zahn said.
Hollywood stars and producers feel they haven’t made it unless their show or movie becomes a Funko collectible, a status achieved by shows ranging from Squid Game and Game of Thrones to Seinfeld and Golden Girls.
Perlmutter has worked closely with Mariotti at Funko for almost a decade, first as senior vice president of sales, and since 2017 as president.
He remembers that the $1 billion by 2021 prediction was met with some skepticism when it was made.
“We’re misunderstood by many different audiences, whether it be the financial audience or our perceived competitors in the toy industry,” Perlmutter said.
“We’re not a toy company, we’re a pop culture company,” he said.
It’s a company that has achieved the enviable position of being a platform that is as well known, and beloved by collectors, as the entertainment properties it licenses.
“When customers go into stores they say do you have any Funkos, or do you have any Pop!. Or I’m looking for the Funko Pop! Darth Vader or the Funko Pop! Batman. That to us is the magic – because our brand is what they’re looking for, but they’re looking for their favorite character within that brand,” Perlmutter said.
Read more of the Forbes article HERE.