Venture capital firms are eager to allocate money into robotics firms in a wide range of industries from shipping to healthcare as more automation became a focus during the global pandemic.
In 2021, funding globally for robotics and drone companies rose to $14.9 billion, according to PitchBook.
The amount of funding raised for robotics in 2022 has been steady. By January, VCs allocated $560 million of funding into robotics startups, excluding the round for Wandelbots, a German industrial robotics company that raised $84 million for its Series C round in January. The funding for the company’s no-code platform came from U.S. investor Insight Partners, which led the round and was also supported by its existing backers - Microsoft (MSFT) - Get Microsoft Corporation Report, 83North, Next47, Paua, Atlantic Labs and EQT.
The potential for growth in the robotics industry is immense as more automation is sought, Angelo Zino, an equity analyst at CFRA, a New York-based investment research company, told TheStreet.
Factory automation is a large aspect as new capabilities arise for both the industrial and consumer sectors, he said.
“It’s a fast growing market,” Zino said. “Clearly there is an explosion going on with IoT and robotics is included in that spectrum. There is greater automation across everything we do.”
The growth of AI being used in tech and products is leading the market since there has been a lot of change in all end markets, he said.
“The third paradigm shift of AI started four years ago and drives the tech market,” Zino said. “This AI phase is much bigger than first two phases of the PC and mobile devices.”
Software has been a critical component of improving the functionality of robots.
“A big reason we’re going to see a big explosion in the robotics arena is the emergence of AI and all the work being done on the software side of things,” Zino said. “This is a massive holy grail for the tech industry of the next 20 to 30 years.”
Investors are attracted to the robotics industry because the growth potential “becomes enormous,” he said. “The cost of creating these types of devices have become a reality and are not as expensive.”
Robots for Nursing Shortages
Improved artificial intelligence has yielded the use of more robotics in various industries, which has been critical in industries such as nursing that have experienced massive staffing shortages because of Covid-19 and burnout.
Diligent Robotics, an Austin, Texas-based startup founded by two women, raised over $30 million in April. The funding will be used to deal with supply chain issues and hire more employees to deploy Moxi, a collaborative robot. Tiger Global and the company’s existing investors True Ventures, DNX Venture, Ubiquity Ventures, E14 Fund, Next Coast Ventures, Boom Capital and Gaingels also participated, along with a new investor, Cedars-Sinai Health Ventures.
This new round of funding will help the company scale to meet the increasing demand for its healthcare service robot, said Andrea Thomaz, co-founder of Diligent Robotics.
Moxi, which debuted in 2018, works with clinical staff with routine tasks such as bringing supplies, medications or lab samples. The company started its commercial deployments in 2020 and has worked with several hospital systems, including Mary Washington Healthcare in Fredericksburg, Virginia, which purchased more robots after its initial trial phase in December.
“Right away we could see the impact Moxi made on the efficiency of our staff and how morale immediately increased,” said Cody Blankenship, vice president performance improvement at Mary Washington Healthcare. “We were so impressed with what Moxi took off our team's hands, we chose to add even more robots to our fleet."
Cedars-Sinai in Los Angeles said the robot has given healthcare workers more time to treat patients.
"Diligent Robotics' participation in the Cedars-Sinai Accelerator program led to the exploration of our team testing this solution with our clinical teams," said David Marshall, chief nursing executive at Cedars-Sinai. "Using the robot to relieve front-line health care workers from point-to-point delivery and retrieval tasks has been successful in our original launch.”
The company’s total funding is just under $50 million.
"Robotic automation technology will be the key to optimizing efficiency and productivity in health care operations," said Connie Lee, a partner at Tiger Global.
Shipping Industry Uses Automation For Cleaning
Neptune Robotics is working to solve the shipping industry’s issue of cleaning the hulls of its container ships and raised $17.25 million in funding led by Sequoia China, along with participation from Matrix Partners China and SOSV Investments. The company uses data and AI to produce insights on the performance of shipping containers and vessels and is already working with companies in Hong Kong and China.
The company, founded by Elizabeth Chan, Kate Hongqian Ma and Jacky Im, plans to use the funding to expand to Asia, along with Europe and the U.S. and hire more employees, including engineers and marine biologists, CEO Elizabeth Chan told TechCrunch.
The build up of microorganisms such as algae and barnacles on a ship can increase the amount of fuel used by 15% and lower efficiency.
“We were immediately impressed with their focus and drive to solve emissions in marine logistics – an area often overlooked in the climate tech space,” SOSV/HAX’s Duncan Turner said. “Unlike many other climate tech companies, Neptune can immediately make a meaningful climate impact (and they have already started).”
Smaller Robots Used in Recycling
Glacier, a San Francisco-based recycling robotics startup, raised $4.5 million from New Enterprise Associates and well-known executives, former GE CEO Jeff Immelt, former Uber CPO Manik Gupta and Climate Tech VC co-founder, Sophie Purdom.
The company had been working in stealth mode since 2019, but recently launched its first commercial system at a Los Angeles facility with a robot that is able to sort eight commodity types across two sort lines, “which no other robotic sorter can do,” founder Rebecca Hu wrote in a Medium post.
“We’re also developing best-in-class computer vision to identify everything in our waste stream, from broad categories like PET plastic, to highly specific items like cat food tins,” she wrote. “We now have an extraordinary degree of insight into what exactly is in our trash. Our aim is to equip every participant in the recycling industry with this data intelligence.”
Glacier said its robots are half the cost compared to other recycling facilities because they are customized and are 20% cheaper to install. The robots are also much smaller and only need three feet of length for the conveyor compared to traditional models that seek 9–12 feet.
The funding will be used to hire more employees and focus on creating real-time waste intelligence for facilities and municipalities.