The hottest new start-up ... makes toy cars

As more technologies and devices become available to kids, toymakers are looking for ways to make their products more compelling to compete with tablets and smartphones.

That's what U.K.-based start-up Cannybots is aiming to do with the release of its new smartphone-controlled toy that lets kids build and program their own race car sets.

The company launched a Kickstarter campaign this week to secure funding for a commercial version of the toy after receiving an innovation grant from the British government. In just two days, the company has raised more than $97,000, far exceeding its $40,000 goal.

The racing set can be played right out of the box, but kids can also design and print their own 3-D race cars and tracks. They can also program the bots to vary speeds and game scenarios.

Cannybots game
Source: Cannybots

Cannybots CEO Anish Mampetta said he came up with the idea for an educational version of the toy after researching kids' unhealthy addiction to tablets.

"The toys that we have today haven't kept up with the pace of technology, so we have to make our product smarter if it has to compete for playtime with tablets," Mampetta told CNBC.

The company aims to make playtime productive, which is why it incorporates aspects of robotics, coding and 3-D printing, which lets users design a model of an object and print it out with plastic, metal or composite materials.

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Building the toy and "going through the 3-D printing process creates more engagement with the toy," and kids have stronger attachments to things that they create, Mampetta said.

Aaron Maurer, an Iowa middle school instructor who tried out Cannybots, said the product and others like it, gets to the core of what hands-on science, technology, engineering and mathematics (STEM) education aims for.

Using technology to get children interested in education has been around for a long time, but it's a lot easier to attain now because the technology is getting cheaper, Maurer said.

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The printing technology plays an important role in STEM education because it allows kids to prototype their ideas to see if they will actually work, he said.

The global 3-D printing market is expected to nearly quadruple to $21 billion over the next five years, according to Wohlers Associates, a consulting firm that tracks various industries.

The technology is suitable for the toy industry because it allows kids to entertain themselves and create at the same time, said Terry Wohlers, president of Wohlers Associates, which expects more toy companies to add 3-D components to their products.

Cannybots game 1
Source: Cannybots

The printing industry is aware of the tremendous potential in the children's market, but few companies have figured out a profitable way to make at-home 3-D printers work.

"You're talking about a relatively low margin, high volume business model, whereas [3-D printing in general] has always been based on the inverse: high margin, low volume, for the most part," Wohlers said.

Millions of people may use the device, and still the company may only make a few dollars off of that interaction. "So, how do you make that work from a business standpoint?" Wohlers asked.

A few major gaming companies, including Electronic Arts, have experimented with 3-D printing technology, but the toy industry is embracing the transformation in stride.

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In April, Mattel, one of the major toy manufacturers that uses 3-D printing for large-scale production of products like Barbies and Hot Wheels, teamed up with software provider Autodesk in a deal to bring toy customization apps and 3-D printing to kids.

The companies are working on a line of apps to let consumers "imagine, design and customize their own toys and help to make the toys real through 3-D printing," the companies said in a statement.

Last year, Hasbro, the toymaker behind brands such as My Little Pony and Transformers, launched a similar initiative with Shapeways with a website called SuperFanArt.com.

Wohlers expects 3-D printing to play an integral role in how students learn and play as the technology becomes more affordable and accessible, but so far most of the printing has been carried out in schools.

Most attempts to make cheap desktop printers have failed because manufactures haven't figured out a profitable business model, Wohlers said.

"We have long thought that there is reason to make a low-cost and safe 3-D printer for children," Wohlers said. "The major toymakers haven't taken that leap yet, but I think it's absolutely possible and it will happen. It's just a matter of time."