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The Freak’n Genius team

Kyle Kesterson’s new animation startup, Freak’n Genius, has raised $525,000 in fresh funding from more than a dozen angel investors that include Zapd founder Kelly Smith; Jumala founder Virl Hill; Wilson Sonsini Goodrich & Rosati; Chris Hurley; Ty Alevizos and others. Kesterson tells GeekWire that the company hit its original $450,000 funding goal within two weeks of graduating from Microsoft’s Kinect Accelerator, a new program which provides support to startups which are using the motion-sensing technology in innovative ways.

The fundraising round also comes after Freak’n Genius turned down an acquisition offer and an investment from a large corporate partner.

“We spent a month entertaining the deal and put the angel raise on hold,” says Kesterson. “After going back and forth and not being able to entirely find a mutual alignment, we respectfully bowed out and focused on our smaller angel raise.”

Freak’n Genius uses Microsoft’s Kinect to let people crawl into the virtual skin of a variety of animated characters and then create short comedic videos that can be shared over the Web. It was started at a Startup Weekend event in Seattle.

In addition to Kesterson, who previously co-founded Giant Thinkwell, the team consists of sketch comedy artist Clayton Weller and technologist Dwayne Mercredi. It also just hired its first engineer, and plans to bring on two others in the near term. The company is now located in the SURF Incubator in downtown Seattle.

“Fundraising (has) been exciting, exhausting, and quite the learning experience, and I am looking forward to the next chapter of having all cylinders firing on product development back with the rest of the team,” said Kesterson.

Weller, for example, has been working with more than a dozen comedians to develop political-based skits tied to the election. The new animated shorts will be released beginning this week on the company’s YouTube channel, with Kesterson saying that they will mix political satire with some absurdity.

Freak’n Genius also has been cultivating opportunities from the Kinect Accelerator program, with Kesterson saying that it has opened up doors in new ways.

“It usually consists of people wanting to pick our brains around working with the device, working with Microsoft as a small startup, where we see depth-sensing going, the challenges we’ve had, and any perspective we can provide for their ideas,” said Kesterson. For example, it was recently invited to Nike’s “Apparel Innovation Hackathon” in Beaverton, Oregon, spending time with designers at the sports apparel giant.

“It’s inspiring to see the Kinect being embraced from the grassroots level, up to the corporate level, and it’s a bit reassuring in that, although we’re skating to the puck and are currently a bit ahead of the curve with this technology, it appears to have a momentous swell happening right behind us that makes it so we’re not too far ahead and have a decent shot to be a part of something amazing,” he said.

Previously on GeekWireFreak’n Genius: Animation startup uses Microsoft Kinect to tap your inner goofball

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