Everyone still wants a robot to do their most tedious, taxing and dangerous jobs. But lately, investors are less keen on funding startups that could deliver on that vision.
With venture funding down sharply in recent months to virtually every technology sector, robotics has not been spared. Per Crunchbase data, investment in robotics-focused startups in 2022 was down 44% from the prior year.
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It was the second-lowest total in five years, as illustrated in the chart below:
On a quarterly basis, funding has declined sequentially as well. To illustrate, we chart out totals for the past five quarters and 2023 to date below:
Yet while the funding tallies may be down, buzz around the robotics space remains high. As employers in industries from retail to hospitality to health care struggle to attract human workers at prevailing wages, the situation is fueling a raft of startups developing labor-saving robotics technologies.
Bucking the trend
Even in the last few months, when investment was down most sharply, a number of intriguing companies secured large rounds, including:
- Locus Robotics, a warehouse robotics company that manufactures autonomous mobile robots to support e-commerce, raised $117 million in a November Series F round.
- AMP Robotics, a developer of AI-guided robots and infrastructure for the waste and recycling industry, picked up $91 million in a November Series C financing.
- Verdant Robotics, developer of an autonomous system for spraying and laser weeding, along with digital crop modeling, pulled in $46.5 million in a November Series A.
Demand for robotics technologies also remains high. North American robot sales in the first nine months of 2022 reached record levels, according to the Association for Advancing Automation, with expectations we will see the highest number of robots sold in a year for the second year in a row.
Although the automotive industry accounts for the majority of purchases, A3 attributed recent quarterly sales increases to other sectors too. Much of the interest comes from industries experiencing ongoing labor shortages, including restaurants, retail, construction and agriculture.
Robots are poised to take on tasks such as drywall finishing, shelf-scanning, food preparation and service, and fruit picking. Theoretically, that would free up humans to do jobs that the robots can’t do.
Exit climate in flux
For a while, venture investor enthusiasm around robotics’ potential was starting to spill into public markets. During the IPO and SPAC boom of 2021, a number of companies in the space launched offerings.
To date, performance has been mixed and mostly not good. The exception is Procept BioRobotics, a surgical robotics company focused on prostate surgery, which looks like the star performer, with a $1.8 billion market cap.
Several that went public via SPAC have fared less well. This includes Nauticus Robotics, a developer of undersea robotics technology, and Vicarious Surgical, a surgical robot developer, which are both trading for a fraction of their offer price. Berkshire Grey, a developer of robotics technology for e-commerce and logistics that carried out one of the higher profile debuts, was recently trading below $1 per share.
Acquirers, however, are snapping up robotics companies too. The biggest headline generator, of course, was Amazon’s summer announcement of a $1.7 billion planned acquisition of publicly traded iRobot, best known for its Roomba robot vacuums. Also in the past couple years, agriculture-focused robotics upstart Bear Flag Robotics sold to John Deere, and Fetch Robotics, a developer of warehouse robotics, sold to Zebra Technologies.
Meanwhile, Miso Robotics, best known for its Flippy burger-flipping robot, is testing the waters with a planned micro public offering that would raise around $15 million.
Even if they haven’t been the steadiest public market performers, it’s hard not to root for a rebound in robotic startup fortunes. In a world where most of us want to live well without working ourselves into the ground, that ideal looks a lot more realistic assuming a growing role for labor-saving robots of all stripes.
Illustration: Dom Guzman
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