New York-based mobile studio Cupcake Digital, the company behind licensed apps featuring popular characters like Kung Fu Panda, VeggieTales and The Smurfs, is now looking to build original IPs with the acquisition of Charlottesville, Virginia-based Little Bit Studio and its line of Bugs and Buttons children’s apps.

Following the acquisition, Little Bit will operate as a wholly owned subsidiary of Cupcake Digital, tapping into the larger studio’s resources.

For Cupcake, while its bread and butter has long been producing licensed entertainment apps, this new deal paves the way for the company to create and build original properties for the consumer products market.

“We’ve always been a huge fan of the work that Little Bit Studio has done and the quality of their apps,” says Brad Powers, chairman and CEO of Cupcake Digital. “In the longterm, after we promote the Bugs and Buttons brand, we feel this could be a great property that we may be able to license out for other materials such as games, potentially some merchandise, things like that.”

Founded in 2011, Little Bit Studio’s line of visually stunning apps includes Bug Art, Bugs and Bubbles, Bugs and Numbers, Bugs and Buttons 2 and the original Bugs and Buttons. 

Cupcake plans to make a significant investment in marketing and promoting the Bugs and Buttons brand to support the introduction of new products as early as the first quarter of 2015.

And while the deal marks a milestone in Cupcake’s growth strategy, that’s not to say the company is turning away from being a licensee.

“We’ll continue to maintain and grow our licensed products,” says Powers. “We are also very interested in acquiring owned and operated IP. We look at the market and feel that it is highly fractured, and by joining forces, we can create an ecosystem that increases brand awareness.”

As its second acquisition this year—the first being iStoryTime developer zuuka—the deal solidifies Cupcake Digital’s stance as a leader in the indie kids app market.

Little Bit Studio founders Scott Vann and Jason Luber will hold senior positions at Cupcake Digital.

Cupcake will also be remastering some of Little Bit’s existing apps to accommodate new iOS features and retina display.