Ricky and Morty
Betting on Funko is betting on 3D printing, Cobots, and agile manufacturing.
Their moat is questionable, but it is growing.
Millenials don't want to grow up, and Funko will profit from it.
Funko ( FNKO) has a variety of merchandising products of beloved franchises at reasonable prices. It is a well-organized company with a clear path for growing profit margin and reducing the time to launch a product. Many of its products are collectibles and have started to become staples. Over time, this trend could grow to become a valuable moat for the company.
Millenials do not want to grow up, a trend that gives Funko an expanding market for their products. As Millenials grow up, Funko´s target age range will grow as well. Their manufacturing process is a prime candidate for new modeling, prototyping, and manufacturing technologies that are on the rise, and becoming cheaper and better every day.
Funko has four types of products: big-headed figures are the core business of the company; similar figures are also made in plush. These figures are collectibles and are becoming staples. The more figures there are, the stronger the brand is, and the harder it would be for a competitor to take them on. That is the moat of the company. It is small but growing. The apparel and home/ accessories business have no real moat; many small businesses sell similar apparel and accessories. In those businesses, Funko has to rely on its scale to deliver a better product in more locations at a better price.