Kidaptive wants to revolutionize early education by arming 3-5 year olds with iPads loaded with Hollywood-quality animated stories designed to entertain and educate.
"While companies like Pixar, Dreamworks, and Disney have done an amazing job engaging kids and parents with their beautiful content and storytelling, unfortunately no one has done the same with learning and curriculum," P.J. Gunsagar, Kidaptive's CEO and co-founder, told CNBC.
Kidaptive combines cutting edge animations with early learning curriculum developed by Stanford University, according to Gunsagar and co-founder Dylan Arena.The content is delivered through an interactive app that leverages the iPad's touch screen so toddlers can interact with the content while the app gauges the child's abilities and adapts to match their needs.
The company's first product is an animated series called Leo's Pad made up of 25 "appisodes" geared toward toddlers with characters named after Leonardo da Vinci (Leo) and Galileo (Gally).
While 3D animation is very expensive to produce, Gunsagar said Kidaptive can keep costs down by using his 3D visual effects company, Prana Studios, which he co-founded in 2003.
"[Prana Studios] is one of a handful of studios globally that can produce feature film 3D animation work, and the fact that they're a large investor in our company enables us to produce this content at cost," he said.
But Kidaptive is not alone in the education and entertainment space. Its competition includes Duck Duck Moose, a company that creates educational children's applications for the iPhone, iPod touch, iPad and Android. Founded in 2008,Duck Duck Moose has won several awards, including the 2010 Best Kids' iPhone/iPod App of the Year Award from iLounge, and a Parents' Choice Gold Award.
Also in the space is newcomer PlaySquare.tv, a form of touchable television that allows children to learn by physically helping move stories along through drawings, spellings, etc. The company's first episode is an adaptation of the PBS TV show "WordWorld." Unlike Kidaptive, which creates its own original content, PlaySquare licenses existing TV properties so children and more importantly parents shopping for educational apps may already be familiar with the content. PlaySquare's founder and CEO, Alex Kay, was unable to disclose any specific properties yet.
However, Kidaptive's Arena said what really distinguishes Kidaptive is its "Parent's Pad," a back-end dashboard parents can access to help them monitor their child's progress. The Parent's Pad also provides tips for parents on how to improve any learning hurdles, like difficulty in color or shape recognition.
(Read More: Q&A With P.J. Gunsagar and Dylan Arena)
Gunsagar admitted distribution will be their biggest hurdle. "We hope given the level playing field that Apple creates through its iTunes distribution network and ecosystem that we will win if parents … get behind what we're trying to do."
Kidaptive has released 3 "appisodes" after debuting in January 2013. The first episode is free and each additional is priced at $2.99. So far the company has had 300,000 downloads.
Kidaptive has also raised $4 million dollars in funding from investors such as Menlo Ventures, Prana Holdings, Inc., Veddis Ventures, and NewSchools Ventures
—By CNBC's Erin Barry and Joanna Weinstein