INSUBCONTINENT EXCLUSIVE:
The Valley’s affinity for robotics shows no signs of cooling
Technical enhancements through innovations like AI/ML, compute power and big data utilization continue to drive new performance milestones,
efficiencies and use cases.Despite the old saying, “hardware is hard,” investment in the robotics space continues to expand
Money is pouring in across robotics’ billion-dollar sub verticals, including industrial and labor automation, drone delivery, machine
vision and a wide range of others.According to data from Pitchbook and Crunchbase, 2018 saw new highs for the number of venture deals and
total invested capital in the space, with roughly $5 billion in investment coming from nearly 400 deals
With robotics well on its way to again set new investment peaks in 2019, we asked 13 leading VCs who work at firms spanning early to growth
stages to share what’s exciting them most and where they see opportunity in the sector:Shahin Farshchi, Lux CapitalKelly Chen, DCVCRob
Coneybeer, Shasta VenturesAaron Jacobson, NEAEric Migicovsky, Y CombinatorHelen Liang, FoundersX VenturesAndrew Byrnes, Micron
VenturesLudovic Copéré Sony Innovation FundCostantino Mariella, Sony Innovation FundCyril Ebersweiler, SOSV - HAXPeter Barrett, Playground
GlobalBruce Leak, Playground GlobalJim Adler, Toyota AI VenturesParticipants discuss the compelling business models for robotics startups
(such as “Robots as a Service”), current valuations, growth tactics and key robotics KPIs, while also diving into key trends in
industrial automation, human replacement, transportation, climate change, and the evolving regulatory environment.Shahin Farshchi, Lux
CapitalWhich trends are you most excited in robotics from an investing perspective?The opportunity to unlock human superpowers:Increase
productivity to enhance creativity leading to new products and businesses.Automating dangerous tasks and eliminating undesirable, dangerous
jobs in mining, manufacturing, and shipping/logistics.Making the most deadly mode of transport: driving, 100% safe.How much time are you
spending on robotics right now? Is the market under-heated, overheated, or just right?Three-quarters of the new opportunities I look at
involve some sort of automation.The market for robot startups attempting direct human labor replacement, floor-sweeping, and dumb-waiter
robots, and robotic lawnmowers and vacuums is OVER heated (too many startups).The market for robot startups that assist human workers,
increase human productivity, and automate undesirable human tasks is UNDER heated (not enough startups).Are there startups that you wish you
would see in the industry but don’t? Plus any other thoughts you want to share with TechCrunch readers.I want to see more founders that
are building robotics startups that:Solve LATENT pain points in specific, well-understood industries (vs
building a cool robot that can do cool things).Focus on increasing HUMAN productivity (vs
trying to replace humans).Are solving for building interesting BUSINESSES (vs
emphasizing cool robots).Kelly Chen, DCVCThree years ago, the most compelling companies to us in the industrial space were in software
We now spend significantly more time in verticalized AI and hardware
Robotic companies we find most exciting today are addressing key driver areas of (1) high labor turnover and shortage and (2) new research
around generalization on the software side
For many years, we have seen some pretty impressive science projects out of labs, but once you take these into the real world, they fail
In these changing environmental conditions, it’s crucial that robots work effectively in-the-wild at speeds and economics that make sense
This is an extremely difficult combination of problems, and we’re now finally seeing it happen
A few verticals we believe will experience a significant overhaul in the next 5 years include logistics, waste, micro-fulfillment, and
construction.With this shift in robotic capability, we’re also seeing a shift in customer sentiment
Companies who are used to buying outright machines are now more willing to explore RaaS (Robot as a Service) models for compelling robotic
solutions – and that repeat revenue model has opened the door for some formerly enterprise software-only investors
On the other hand, companies exploring robotics in place of tasks with high labor shortages, such as trucking or agriculture, are more
willing to explore per hour or per unit pick models.Adoption won’t be overnight, but in the medium term, we are very enthusiastic about
the ways robotics will transform industries
We do believe investing in this space requires the right technical know-how and network to evaluate and support companies, so momentum
investors looking to dip their hand into a hot space may be disappointed.Rob Coneybeer, Shasta VenturesWe’re entering the early stages of
the golden age of robotics
Robotics is already a huge, multibillion-dollar market – but today that market is dominated by industrial robotics, such as welding and
assembly robots found on automotive assembly lines around the world
These robots repeat basic tasks, over and over, and are usually separated by caged walls from humans for safety
However, this is rapidly changing
Advances in perception, driven by deep learning, machine vision and inexpensive, high-performance cameras allow robots to safely navigate
the real world, escape the manufacturing cages, and closely interact with humans.I think the biggest opportunities in robotics are those
which attack enormous markets where it’s difficult to hire and retain labor
One great example is long-haul trucking
Highway driving represents one of the easiest problems for autonomous vehicles, since the lanes tend to be well-marked, the roads have
gentle curves, and all traffic runs in the same direction
In the United States alone, long haul trucking is a multi-hundred billion dollar market every year
The customer set is remarkably scalable with standard trailer sizes and requirements for shipping freight
Yet at the same time, trucking companies have trouble hiring and retaining drivers
It’s the perfect recipe for robotic opportunity.I’m intrigued by agricultural robots
I’ve seen dozens of companies attacking every part of the farming equation – from field clearing and preparation, to seeding, to
weeding, applying fertilizer, and eventually harvesting
I think there’s a lot of value to be “harvested” here by robots, especially since seasonal field labor is becoming harder to find and
One enormous challenge in this market, however, is that growing seasons mean that the robotic machinery has a lot of downtime and the cost
of equipment isn’t as easily amortized in other markets with higher utilization
The other big challenge is that fields are very, very tough on hardware and electronics due to environmental conditions like rain, dust and
mud.There are a ton of important problems to be solved in robotics
The biggest open challenges in my mind are locomotion and grasping
Specifically, I think that for in-building applications, robots need to be able to do all the thing which humans can do – specifically
opening and closing doors, climbing stairs, and picking items off of shelves and putting them down gently
Plenty of startups have tackled subsets of these problems, but to date no one has built a generalized solution
To be fair, to get to parity with humans on generalized locomotion and grasping, it’s probably going to take another several
decades.Overall, I feel like the funding environment for robotics is about right, with a handful of overfunded areas (like autonomous
I think that the most overlooked near-term opportunity in robotics is teleoperation
Specifically, pairing fully automated robotic operations with occasional human remote operation of individual robots
Starship Technologies is a perfect example of this
Starship is actively deploying local delivery robots around the world today
Their first major deployment is at George Mason University in Virginia
They have nearly 50 active robots delivering food around the campus
They’re autonomous most of the time, but when they encounter a problem or obstacle they can’t solve, a human operator in a teleoperation
center manually controls the robot remotely
Starship tracks and prioritizes these problems for engineers to solve, and slowly incrementally reduces the number of problems the robots
I think people view robotics as a “zero or one” solution when in fact there’s a world where humans and robots work together for a long
