Leading robotics VCs talk about where they’re investing
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 Capital
- Kelly Chen, DCVC
- Rob Coneybeer, Shasta Ventures
- Aaron Jacobson, NEA
- Eric Migicovsky, Y Combinator
- Helen Liang, FoundersX Ventures
- Andrew Byrnes, Micron Ventures
- Ludovic Copéré Sony Innovation Fund
- Costantino Mariella, Sony Innovation Fund
- Cyril Ebersweiler, SOSV & HAX
- Peter Barrett, Playground Global
- Bruce Leak, Playground Global
- Jim Adler, Toyota AI Ventures
Participants 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 Capital
Which 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, DCVC
Three 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 shif