This is a guest post. The views expressed here are solely those of the author and do not represent positions of IEEE Spectrum or the IEEE.
Earlier this month I was in Denmark speaking at the R-18 robotics fair. Denmark is quite remarkable as, despite its size, it had two exits of robotics startups over US $100 million: Universal Robots and MiR, both acquired by U.S. electronics testing equipment maker Teradyne (currently valued around $7 billion).
The talk I gave covered our observations at HAX over the past five years from investing in over two dozen robotics startups, and meeting hundreds.
I started with a little robot-focused quiz. Let’s see how you fare!
1. Which is the #1 home robotics company in the world?
2. Which famous robot pet just got back on market?
3. Which robotics companies were acquired by SoftBank?
4. What are the world’s robot unicorns? (Private companies valued over $1 billion.)
05. Finally, as investors, the more important question for us is: Who are the next robot unicorns?
Easy? Let’s see!
1. Yes, it is iRobot.
Many got it right. Interestingly, the answer was different a few months ago, when China’s Ecovacs (the local “iRobot”) went public. Today, both have a market cap around $2.5 billion.
2. Of course it is Sony’s Aibo.
The previous versions, sold from 1999 and for seven years, sold 150,000 units. The new one sold about 10,000 units in three months, for about $3,000 each. It’s not a small number, but the price and utility remain in question.
One audience member remembered Aldebaran, the French company that gave us Pepper. While it is still the most sophisticated tablet holder in the PR world, Pepper is an indicatino that we are far from achieving the (antiquated?) vision of humanoid robots living with us. It is also telling that Boston Dynamics seems to still be struggling to find a market.
4. Robot unicorns? There are a few. Here are some examples (we are not counting electric cars nor space rockets here):
- Chinese startups have multiplied. These include Ninebot (Chinese owners of Segway and worth $1.5 billion), the drone champion DJI (worth an alleged $15 billion), and the little known UBTech, which makes STEM robots (estimated at $5 billion).
- Adding digital fabrication machines, there is Carbon 3D and Desktop Metal from the United States.
- Public companies don’t count but it’s still worth mentioning Japan’s Cyberdyne (an exoskeleton company worth $1.5 billion) and Germany’s Kuka (acquired by China’s appliances maker Midea for $4 billion).
5. Who the next unicorns are is harder to answer. See below for more.
Looking for the Next Robot Unicorns
It generally takes several years for a startup to reach unicorn status — all the more so in hardware, where atoms matter (no pun intended).
The big buzz these days is around autonomous vehicles. From cars it has spread to trucks, ships, forklifts, and more (including Elon Musk’s drone landing ships).
There is certainly more to do in this space but it has also become a very crowded field, with many car makers now battling it out or cooperating with tech giants.
So what are the areas with opportunities opened to startups? Fortunately, there are many!
Service Automation: From Tasks to Stores
Zume operates pizza trucks that cook on the go. The driver is still a human, but the pizzaiolo is a robot. They raised $48 million.
Spyce is a restaurant that cooks meal bowls. The robots even clean their cooking equipment. They raised $26 million.
BingoBox is an automated convenience store chain. A kind of supercharged Amazon Go, based in China. They raised $95 million.
GymBox, a self-service gym chain in China, reportedly raised over $30 million.
Consumer Robots? The Dream Is Still Far
While vacuum cleaners and lawnmowers have spread and gradually commoditized, the wave of home robots has suffered a low tide.
Jibo (which raised $72 million) and Kuri have suffered from the rise of voice A.I. devices by Amazon, Google, and others.
One sector that weathered the storm is STEM education, often thanks to the support of government or school budgets. In China in particular, the effort dotes many schools with hundreds of thousands to raise the next generation of innovators.
Buyers have also become more discerning beyond parental guilt or a school’s mandate: Keyi Tech won contracts with schools after robotics teachers noticed students learned a lot faster than with LEGO MindStorms, as they wasted no time on assembly and could focus on programming and animation.
We are also hopeful that robots combined with AI and machine learning will provide the ability to teach us. We made several investments in that direction.
Many of us were fed science-fiction full of humanoid robots. Yet, making a robot with two usable arms still costs thousands. Instead, robots are spreading via the enterprise and industry, completing complex, dull, dangerous, or dirty jobs in often — purposely — unremarkable ways.
One such example of robot “hidden in plain sight” is Avidbots. The HAX-funded and Ontario-based startup operates and sells robots for commercial cleaning. The most remarkable about their robots is not only how efficient they are, but also how little attention they draw.
Like many Canadian startups, Avidbots, now with close to 100 staff, benefited from lower talent costs and tax breaks. Those advantages are significant over Silicon Valley, where operating has become a challenge, from recruiting challenges to high running costs.
Our portfolio quickly added a series of other machines, such as Simbe Robotics (supermarket inventory, by former Willow Garage staff), Viabot (outdoor cleaning), Plecobot (window-cleaning for buildings), and Youibot (vehicle inspection for safety and customs).
Industry Is Transforming
In addition to modernizing with sensors, various industries are increasing their level of automation. When a robot offers positive ROI within 24 months it becomes a no-brainer.
Several startups have come to challenge the rise of cobots, often equipped with sensors or computer vision to perform advanced tasks, or exist alongside human workers (in this sector we invested in the China-based Elephant Robotics). When the cost is low, the key becomes customization and support. For this, being close to your customers becomes a tremendous advantage.
2. Desktop fabrication
I mentioned above Carbon 3D and Desktop Metal, but it doesn’t stop there: factory machines are shrinking in size and becoming smarter.
3. Human Augmentation
At the frontier between robotics and health are a number of companies, like exoskeleton companies Cyberdyne, Ekso Bionics, and ReWalk, but also novel approaches like Nuada, a HAX startup that makes a glove to provide assisted grip and avoid repetitive strain injuries.
Conclusion: Don’t Trust Mainstream Sci-Fi With Robots
William Gibson, the writer who coined “Cyberspace” back in 1982, said “it’s great when someone gets it right, but almost always it’s wrong.” Repeating the humanoid robot meme doesn’t make it more right.
What is happening, however, is that robots are spreading through the enterprise and industry, based on the old business principle known as “return on investment.” Rosie, C-3PO, the Terminator, and others can wait.