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Danielle’s a poodle, with big eyes, fuzzy ears, and cartoon lavender fur. She’s also a robot, and as I talk on Zoom to Marc Theermann, she’s sitting behind him. “Danielle is a robot we built on top of Boston Dynamics’ Spot platform,” said Theermann, referencing Boston Dynamics’ famous robot dog. “People are excited about robots, but all these robots today look like they’re out of a sci-fi movie. In order to really be welcomed by humans, they need to be cute and cuddly. So, this is Danielle.” And even over Zoom, Danielle is obviously snuggly. Her eyes, hooded under purple eyelids move, as do her mouth and legs. She’s one of two prototype companion robots that Theermann—previously chief strategy officer at Boston Dynamics—has been working on. The other is Hugo, a Tyrolean mountain troll whom I’ve only seen pictures of, but looks like the cutest imaginable yeti. Hugo and Danielle are both internal experiments at Dynamic Creatures, the startup Theermann just cofounded with noted AI researcher Farbod Farshidian. The startup declined to disclose the amount of funding it’s raised, but venture backers include Eniac Ventures, Kindred Ventures, BlueGrass Ventures, Heliad, and Sunshine Lake. The company’s a spinout of the most famous name in American robotics, Boston Dynamics, with one mission: Making the cutest and most loveable robots. “It seems counterintuitive to say that this is the next frontier of robotics when everyone’s running in the industrial direction,” said Theermann. “But at Boston Dynamics, we had so much inbound of people saying: ‘Hey, can you come to my event? Can you come to FIFA? Can you come to our football game, and dance at the halftime show?” So, while at Boston Dynamics, Theermann monitored robots performing on America’s Got Talent, and with Katy Perry and The Rolling Stones. Some Spots even made a brief cameo in The Mandalorian—major, for lifelong Star Wars fan Theermann—and it was clear, he said, that “there’s a pull from the market, and humans are super excited to interact more with robots.” (To be fair, this probably wouldn’t be the case for all Boston Dynamics’ robots. The company is known for its longstanding ties with the Pentagon and industrial robots.) Theermann’s wanted to work with robots since he was a kid, growing up in the countryside in Brüggen, Germany. The first robot he remembers is R2D2, the most iconic of companion robots, and with Dynamic Creatures, he’s trying to make that dream a reality at some scale as robotics is roaring. As the AI boom matures, investors are pouring billions into robotics—recent PitchBook data said that robotics and physical AI startups drew a record-high $18.6 billion in funding over Q2 2026. “It shows that the hurdles to build a robotics company are coming down,” said Theermann. “It’s still not straightforward and it’s still capital intensive, but it’s more possible than it was ten years ago. So, we want to focus on this unique niche: If you go to the theme park today, there are magical animatronics, but they are often stationary, bolted to the ground, and they have a fixed program. They do one dance or one task. We want to marry all our expertise from Boston Dynamics with the field of animatronics to really bring characters to life. So, if you’re an IP holder with a character that you want to bring to life, we’ll be the folks you call.” Dynamic Creatures takes its name from two places, Boston Dynamics and Jim Henson’s Creature Shop. (Henson isn’t involved, and Boston Dynamics is a partner but has no equity.) This is fitting because while Theermann understands why most humanoids look rather alarming, context matters. And the handcrafted, surreal warmth of Henson’s puppets and Muppets is a useful touchpoint when thinking about what the future of robots, literally, can look like. “If you have a robot suddenly in your elementary school, theme park, or shopping mall, surely they should be looking different [from industrial humanoids],” said Theermann. “We’re going heavily cartoonish. And you won’t see a photorealistic robot from us, probably ever.” Meanwhile, robots that look increasingly human (and very uncanny valley) are all the rage in China, widely believed to be the global leader in humanoids. But as Theermann points out, the market overall is booming: By 2035, worldwide humanoid sales are estimated to hit around $300 billion, a serious leap from 2025’s $2 billion, according to J.P. Morgan. “Over the next five years, robots are going to walk into every aspect of our lives,” said Theermann. “First in universities, then in our work environments, and then in our daily lives. That’s why we have to nail the form factor, making them so you want to have an interaction with them… These are the robots that you’re looking for. These are actually the robots that you want.” See you tomorrow, Allie Garfinkle X: @agarfinks Email: alexandra.garfinkle@fortune.com Submit a deal for the Term Sheet newsletter here. Joey Abrams curated the deals section of today’s newsletter. Subscribe here. VENTURE CAPITAL - Guardio, a Tel Aviv, Israel-based consumer cybersecurity company, raised $40 million from Assaf Rappaport, ION Crossover Partners, Union Tech Ventures, Vintage Investment Partners, and others. - Huscarl, a San Francisco-based AI actuary platform for corporate self-insurance, raised $5.6 million in seed funding. FRST led the round and was joined by Y Combinator and others. - AI Score, a London, U.K.-based AI governance platform, raised $5.4 million in seed funding. Fuel Ventures led the round and was joined by existing investor GALLOS Technologies. - Fluencify, a Stockholm, Sweden-based creator marketing platform, raised $4.3 million in pre-seed funding. byFounders led the round. - Lightsage, a San Francisco-based platform that runs simulations to understand how AI agents interact with software products, raised $4 million in seed funding. Nexus Venture Partners led the round and was joined by angel investors. IPOs - ADARx, a San Diego, Calif.-based RNA-medicine biotech building gene-silencing injections for diseases, filed to go public on the Nasdaq. The company posted $6 million in collaboration sales for the year ended June 30. OrbiMed, LAV Fund, SR One, Titanium Trust, and Bain Capital Life Sciences Investors back the company. FUNDS + FUNDS OF FUNDS - Rohati Capital, a Palo Alto, Calif.-based venture fund-of-funds firm, raised $50 million for its first fund focused on early-stage venture funds.
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