Children’s online activities are routinely tracked, aggregated, and exploited by online services, to manipulate children’s online behaviour or monetise. This contributes to the so-called datafied childhood. Unfortunately, such datafication remains largely invisible behind the services and is practically impossible to avoid. Existing approaches largely focus on direct online harms, and provide limited support to raise children’s awareness or understanding of how their data may be processed, transmitted across platforms, and used to affect their best interests. Through co-design workshops, we identified key barriers for children and families to cope with this type of data privacy risk. Our contribution is that instead of regarding children as passive users and needing protection, we draw on critical digital literacy theories and design a KOALA Hero app, which is aimed to enhance children’s cognitive, situated and critical thinking of datafication and online data privacy risks. KOALA Hero represents our first step towards facilitating children’s understanding of the invisible data privacy risks. We hope future empirical evaluations will further inform us regarding how our design approaches may affect the thinking process and behaviours of children and families.