The AI Toy Company, formerly known as Magical Toys, is a San Francisco, CA-based company unveiling bondu, an AI-powered conversational companion. This new toy is designed to help children learn, imagine, and grow through safe, interactive play.
The startup also announced it has raised $5.3 million in seed funding, led by Makers Fund with participation from Samsung Ventures, Boost VC, and Founders Inc. Starting today, bondu is available for pre-order at a price point of $199.99 and is available in four different colors.
Previously, bondu underwent an extensive beta test across the United States, getting real hands-on feedback from parents and children. AI Toy Company founder, Fateen Anam Rafid, and chief product officer, Dan Judkins, describe the product as a screen-free, conversational companion built to replace passive screen time with imagination-driven interaction.
How bondu works
Using advanced language models, Bondu can hold natural conversations, tell stories, answer questions, and play games. It even adapts over time, learning to reflect a child’s interests and emotional tone.
But, how exactly does a toy like bondu work? Is it just a more advanced Furby?
“From the very first ‘hello,’ Bondu begins learning about the parent’s child,” Judkins said in an email interview. “During setup, parents share a few simple details, like their child’s name and interests. From there, every conversation adds context, helping Bondu understand their child’s preferences, play style, and developmental stage. Over time, this allows Bondu to create experiences that feel fresh, relevant, and uniquely personal, whether that’s spinning a silly story about the family pet dining at their favorite restaurant or designing a trivia game inspired by their next vacation.”
Rafid adds: “On the technical side, all Bondu data is securely managed in the cloud. This ensures that Bondu, and any future updates or replacements, can continue to grow alongside the parent’s child, while keeping every interaction safe, age-appropriate, and privacy-protected.”
The AI Toy Company will continue to iterate and evolve bondu, delivering updates and offering premium subscriptions to expand its feature set as well.
“Bondu will never be static, it learns and evolves just like the children who play with it,” Judkins said. “While we’ll keep adding new themes, adventures, and seasonal content, we’re equally focused on bigger horizons: helping kids manage emotions, strengthening family bonds, and opening doors to early education. Families already tell us they’re using Bondu in ways we never expected, and that’s what excites us most about the future.”
Safety and privacy with bondu
The company emphasizes that safety and parental oversight are core to its design. Parents can use a dedicated app to monitor interactions, customize experiences, and manage privacy settings. Bondu is also certified by the kidSAFE Seal Program, an independent safety certification for child-friendly connected technology.
“We approach safety and privacy with the same care we’d want for our own children,” Rafid said. “From the start, parents have full visibility and control through the bondu app, where they can review conversations, set preferences, and delete transcripts at any time.”
Understanding the implications of exposing children to LLMs and AI interaction like this is important, especially since this is designed to represent a friend who will know a child’s name and personal details. Studies have found that even teenagers are already using AI bots for companionship. Parents can never fully know what their children will say to this toy, so apprehension is understandable.
Rafid and the rest of the AI Toy Company seem to understand these concerns.
“Beyond these parental controls, bondu itself is designed to only engage in age-appropriate dialogue, and if a child shares something that signals harm, it immediately directs them to talk to a parent, and sends a notification through the app,” Rafid said. “Behind the scenes, we’ve built multiple layers of safeguards to ensure every interaction stays appropriate and secure. Bondu cannot be tricked into harmful responses, children’s voices are never stored, and all transcripts are securely managed under parental control. All of this is designed in compliance with COPPA, the U.S. federal standard for protecting children’s online privacy.”
Bondu and the future of toys
The AI Toy Company previously piloted Dino, a first-generation emotionally intelligent AI toy, which validated strong consumer demand and helped secure its seed round. The AI Toy Company now aims to redefine what play means in the AI era with bondu, by blending storytelling, emotional awareness, and child development into one connected experience
The market for AI plush toys, like bondu, is still very new, but is absolutely growing. Companies like the AI Toy Company will continue to find inventive ways to combine familiar concepts with new technology. In fact, earlier this year, Mattel announced a partnership with OpenAI to “bring the magic of AI to age-appropriate play experiences with an emphasis on innovation, privacy, and safety,” which is a strong indicator for the potential of this new market.
“For generations, kids have brought play to life through pretend conversations,” Rafid said. “Bondu gives those conversations a real voice, not with a script or a screen, but through genuine, dynamic back-and-forth two-way dialogue. For now, we’re keeping Bondu’s world safe and self-contained, with a focus on building our own ecosystem designed for kids and parents, not the other way around.”
According to Market Research Future, the global smart AI toy market is projected to grow to more than $270 billion by 2035. The AI Toy Company likely hopes to help lead that charge.
“Our core audience is U.S. families with children ages 4–8 who prioritize screen-free play that sparks laughter, fuels imagination, and inspires adventure,” Judkins said. “These individuals see Bondu as an investment in their child’s development, not just another toy or gadget.”