206. Turning Mixed LEGO Bricks Into a VC-Backed AI Startup: €1.5M Raised, Benefits of Iterative Fundraising, Real-World Complexity of Building Hardware & a New Frontier in Circular Tech w/ Ilya Malkin (Sort A Brick)

Ilya Malkin is the co-founder of Sort-A-Brick, a Vilnius-based startup that raised over €1 million in pre-seed funding at the end of 2024. Sort-A-Brick leverages AI-powered computer vision to analyze and sort mixed Lego bricks sent in by customers, identifying which complete sets can be rebuilt from them—breathing new life into unused collections and promoting a circular economy in toys. With a background in management consulting, Ilya spotted an opportunity in the massive Lego market while dealing with his own family's overflowing brick bins. Sort-A-Brick combines hardware and software to tackle the tedious task of sorting, serving both kids and "kidults" in a world where Lego continues to thrive amid digital threats.

On this episode we talk about:

• Turning a personal pain point with kids' Lego chaos into a global business
• How the toy giant Lego is growing at 10% annually, outpacing the market, and the rise of "kidults" driving demand
• Why physical products are harder (and more defensible) than pure software, including longer iteration cycles and higher costs
• Raising in tranches tied to milestones, using investor feedback as reality checks, and the "hidden revenue" of the process
• Attracting top talent without prior exits, grinding harder as a first-timer, and embracing a no-ego mindset to get things done
• How tariffs and re-commerce trends boost businesses like Sort-A-Brick, plus the potential for acquisitions by big players like Lego

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