Venture Capital (VC) Funding for Robotics in 2011

Venture Capital Funding

I've been tracking venture capital (VC) funding of robotics companies for the better part of two years.  Based on my (limited) data, VC funding in robotics exceeded $160 Million for 2011.  This is just a rounding error compared to VC funding of Internet (web-based) companies, which hit a decade-long high of $6.9 Billion in 2011.  My hope is that robotics will get more love in the next year(s), but getting VC funding for robotics is a decidedly tough nut to crack.  Robotics companies have large capital requirements for robot hardware, few potential acquirers, and almost no "Google-scale" breakout success stories (ie. IPOs).  I mean, c'mon... one of the best known robotics companies, iRobot, has a market cap of just $700 Million.  This makes robotics a difficult sell to your typical VC firm.  My hope is that this list can give others courage to pursue "swing for the fences" type projects along with a source for robotics-friendly VC firms.

I certainly do not guarantee the completeness of this list.  If I forgot something, be sure to ping me (preferably in the comments) and I'll add it.  Further, if you come across any newer VC funding announcements related to robotics, be sure to contact me so that I can add it to next year's list!

Anyway, here is the summary of venture capital funding for robotics in 2011:  

Restoration Robotics

 

$43.0 Million

RedZone Robotics

 

$25.0 Million

Liquid Robotics

 

$22.0 Million

Aldebaran

 

$13.0 Million

Medrobotics

 

$11.7 Million

Tibion

 

$10.2 Million

MakerBot Industries

 

$10.0 Million

Harvest Automation

 

$7.8 Million

Orbotix

 

$5.0 Million

ThinkLABS

 

$5.0 Million

Precise Path Robotics

 

$4.5 Million

VGo Communications

 

$4.3 Million

Aethon

 

$1.7 Million

CyPhy Works

 

$1.2 Million

   

------------------

   

> $160 Million**

 

** If you read the comments below, you'll see that I missed (at least!) $33.6 Million worth of VC funding in 2011.

 

 

Restoration Robotics ($41 Million and $2 Million)

 

Restoration Robotics is an interesting robotics company -- they make an image-guided hair transplant robot, called ARTAS.  ARTAS received FDA approval in April 2011, which precipitated an initial cash infusion of around $2 Million in June followed by massive third round of funding (Round C) of $41 Million in August, bringing their 2011 funding total to $43 Million.   For those in the know, hair loss (ie. male pattern baldness) is a lucrative market.  By some measures, it's a $1 Billion per year industry, and Restoration Robotics is hoping to capture a significant chunk through automation.  

To quote,  "[Restoration Robotics' ARTAS is an] interactive, computer assisted system that uses an image-guided robotic arm to enhance the quality of hair follicle harvesting for the benefit of physicians and their patients."   I have to say... I find the videos somewhat disturbing (see below).  But then again... For now, I have a full head of hair.  For how long, who knows?  Both of my grandfathers were virtually bald, and embraced it proudly.

 

<-- Click HERE to Show / Hide Video -->

 

 

 

RedZone Robotics ($25 Million)

 

RedZone Robotics Logo

RedZone Robotics solves real, dirty problems using robots (that's a big complement!).  They're famous for their Solo sewer inspection robots (see video below), and were a spinoff from Carnegie Mellon University back in 1987.  In September 2011, they raised $25 Million in funding.  

For anyone else who is keeping score, RedZone closed another $8.5 Million round in February 2012 too.  Looks like they're making good use of the burgeoning funding environment.

 

<-- Click HERE to Show / Hide Video -->

 

 

 

Liquid Robotics ($22 Million)

 

Liquid Robotics

In June 2011, Liquid Robotics raised $22 Million in a fourth round of funding (Round D) from oil services company Schlumberger and VantagePoint Venture Partners at an estimated value of $70 Million.  According to the NYT, this brings the company's total venture funding to around $40 Million.

Liquid robotics makes "Wave Gliders" -- each robot costs upwards of $200k-500k along with $1k-3k per day to operate.  Still, they offer a solid value proposition compared to $50k-100k per day for ship-based operations.  Liquid Robotics made headlines through recent efforts to autonomously traverse the Pacific Ocean.  They also managed to woo James Gosling (Java's inventor) away from Google; he provides this video on his blog:

 

<-- Click HERE to Show / Hide Video -->

 

 

 

Aldebaran ($13 Million)

 

The French company, Aldebaran Robotics, is known world-wide for their Nao humanoid robot.  In June, they raised a C round of VC funding led by Intel Capital (the investment arm of the world's largest chipmaker) -- to the tune of $13 Million.  

This kinda makes sense... the Nao gained significant market share when it became the standard platform for RoboCup's humanoid league.  According to Frank Tobe's conversations at IROS this year, they've now deployed more than 1500 Nao's, which (at upwards of $15k each) means they have lifetime revenues in excess of $22 Million.  However... I'm not sure how big the market is for Nao-type humanoids -- they must have some plan to expand their business.  So, what do they plan to do with those funds...?  

Well, in recent months Aldebaran purchased Karotz -- an internet-connected "desktop companion robot."  Frankly, I don't understand this move; I'm not sure what Karotz will add to Aldebaran's existing efforts.  Plus, they just announced a new, bigger humanoid (143cm tall), named Romeo.  Given the number of existing full-scale robots on the market (ie. PR2, Meka Robotics, etc.) and the even more limited customer pool for such robots, I really don't understand this move either.  In short, I have no clue what they're doing / planning...

 

 

 

Medrobotics ($11.7 Million)

 

MedRobotics Logo

In November 2011, Medrobotics raised a $11.7 Million series C round, bringing its total to $28.3 Million since it was spun out of Carnegie Mellon University back in 2005.  Medrobotics was originally founded by CMU robotics professor, Howie Choset (and company) to commercialize their "highly actuated, multi-link robots" (aka, snake-like robots) for surgical applications, like flexible imaging inside the body.  

 

 

 

Tibion ($10.2 Million)

 

Tibion Logo

Tibion makes bionic legs (exoskeletons) for stroke patient rehabilitation.  They recently received $10.2 Million to scale up their operation -- to make a battery-swappable version and to focus on sales and marketing.  

I know that there are a number of other prominent exoskeleton systems... from Ekso BionicsLockheed's HULCCyberdyne's HALPanasonic's Power Loader, etc etc.  Not all of these are medical devices... but robots for stroke rehabilitation is an old and successful field.  Frankly, I'm not familiar enough with the space to enumerate Tibion's distinguishing characteristics...

 

 

 

MakerBot Industries ($10 Million)

 

MakerBot Logo

MakerBot is awesome.  MakerBot's sells desktop 3D printers for around $1000.  This is about 20-30 times cheaper than most industrial 3D printers (eg. by Dimension).  This is a big deal.  3D printers (a robot in their own right) are a mainstay of robotics labs, since they let designers rapidly prototype complex or one-off parts.  After posting more than $10 Million in sales over 3 years and rapidly expanding its user base, MakerBot raised a $10 Million round in 2011.  

Honestly, if I had the money (or the clout), I would have invested in MakerBot.  It's a no-brainer.  Heck, I plan to buy one of the printers for my home lab... as soon as I have some spare time or start working on a project that needs some 3D printed parts.  But there's no sense in buying one now.  They just keep getting more-and-more capable, like the latest dual-head MakerBot Replicator (see video below).

MakerBot (and its ilk) are spawning entirely new businesses too -- like crowd-sharing and crowd-sourcing 3D designs via Thingiverse and Shapeways.  You'll find plenty of designs to print, including robots, on these sites.  In fact, Shapeways managed to raise $5.1 Million in 2011 too!

 

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Harvest Automation ($7.8 Million)

 

Harvest Automation Logo

In November, Harvest Automation raised $7.8 Million in series B funding.   Currently, Harvest seems to be focusing on greenhouse / nursery automation by building $25k-50k "plant transporters" (see video below).   This seems like a good first application.  The pots are relatively standard, so the manipulation requirements (degrees of freedom) are relatively low.  This should let the company focus on creating a viable business rather than worrying about how to incorporate expensive robot arms.  

Agricultural robotics is an interesting field.  On one hand, the market size is absolutely huge.  On the other, the rigors of farm work are extreme (hardware maintenance is tough!) and the laborers that these robots supplant are cheap (and way more dexterous).  So... while more advanced applications (ie. fruit-picking robots) may be on the horizon, it seems Harvest Automation might be on to something...

 

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Orbotix ($5 Million)

 

Orbotix gained a lot of attention in January 2011 when they demonstrated their smartphone-controlled ball robot named Sphero (at CES).  In April 2011, they managed to raise $5 Million in Series B funding to properly mass-produce their robot.  (Un)fortunately, the demand for Sphero was so great that they missed their 2011 holiday ship date for pre-orders.  But I believe they're now available and shipping.

Sphero is interesting to me... mostly because it is such a straight forward idea that was executed well.  Conceptually, it is little more than a ball robot with inductive wireless charging and a bluetooth connection (ie. like other smartphone / iphone controlled robots).  I guess the startup adage is true: It's all about execution.

 

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ThinkLABS ($5 Million)

 

ThinkLabs Logo

ThinkLabs is a robotics education company out of India.  It was founded by IIT-Bombay alumni, and currently serves something like 23 universities (31,000) students in India.  In May 2011, they raised $5 Million in venture capital funding.  We frequently hear about robotics companies from the US, Europe, and the "big three" in Asia (Japan, Korea, and China), so it's nice to see competition emerging elsewhere.

 

 

 

Precise Path Robotics ($4.5 Million)

 

Precise Path Robotics Logo

Precise Path Robotics doesn't make your typical lawn mowing robots.  They make big lawn mowing robots to maintain golf courses (see video below).  I must say, I'm not familiar with this market segment (golf? yuk!).  But the 32,000 golf courses worldwide must be a big enough niche.  In August 2011, PrecisePath raised $4.5 Million in VC funding.

 

<-- Click HERE to Show / Hide Video -->

 

 

 

VGo Communications ($4.3 Million)

 

Hizook has covered the VGo telepresence robot a couple of times.  In May, they raised $4.3 Million to (hopefully) produce a mass-market VGo.  At IROS, I had occasion to speak with VGo COO and co-founder, Tom Ryden, in the hallway before his talk... he told me that (economies of scale permitting), the VGo could retail for little more than a high-end desktop PC (ie. say, $2,000?).  That's a pretty exciting possibility, especially if the interfaces are seamless (ie. if they can overcome wireless connectivity and latency challenges).

By now, we're all familiar with the premise of telepresence robots: save on physical travel costs by using a remote, robot surrogate.   But VGo has some stiff competition: RoboDynamics' TiLR, Suitable Technologies (formerly Willow Garage's Texai), InTouch Health (with their recent iRobot partnership), and the QB from Anybots.  The next few months / years are going to be interesting...

 

 

 

Aethon ($1.7 Million)

 

Aethon Logo

There's a special place in my heart for Aethon.  They developed the TUG robot for hospital logistics (asset tracking and recovery, medication delivery, etc).  But more importantly, the TUG robot uses long-range (UHF) RFID tags to perform its magic.  In other words, their product is closely related to my PhD dissertation research (article forthcoming, but for now check out Medication Delivery using UHF RFID on CNN).

They raised a small $1.7 Million round in the middle of 2011, and this has me concerned!  According to reports from 2008, they were already funded to the tune of $36.8 Million -- back when they raised their "possibly last round of funding" of $14 Million.  What happened?  I thought they were actively deploying to hospitals and had their business plan down.  Hopefully it was just a strategic partnership rather than a severe down round...

 

 

 

CyPhy Works ($1.2 Million)

 

CyPhy Works is something of a curiosity too...  This stealth-mode startup was founded in 2008 (originally named Droid Works) by Helen Greiner -- the iRobot co-founder who resigned as iRobot's Chairman of the Board to become CyPhy Works' CEO.   This year, they took in $1.2 Million of venture funding.  Combined with a $1.8 Million venture round in 2010 and a $2.4 Million NIST grant in 2008, that brings their funding to at least $5.4 Million. Being in stealth mode, there is (naturally) very little information about the company's products / game plan.  However, from that NIST grant in 2008, we know that they were planning to build UAV's to inspect civil infrastructure (ie. bridges, roadways, dams, etc).  

Assuming their business plan has remained unchanged, CyPhy Works is sitting at a precipice.  The technology in this space has matured super rapidly -- literally thousands of individuals are flying their own UAV's for "remote monitoring" -- so their competitive advantage (might be) eroding away rapidly.  Plus, based on conversations with Chris Anderson (DIY Drones CEO), regulation is currently a massive burden for UAV operations; in the United States the FAA currently requires flight plans for any (commercial) UAV flights.  But the regulation burden might be changing... in which case, the commercial landscape will explode.  If CyPhy Works is positioned properly (ie. figured out the business side), they can just jump off the cliff and fly above everyone else.  Personally... I wouldn't count Helen out.  Not only is she my academic relative (both descended from Rod Brooks), but she's also incredibly smart and connected.  

 

 

 

Final comments:

 

For reasons that (should) become abundantly clear in the next year, I have a keen interest in the business side of robotics now that I'm post-PhD.  To that end...  I plan to write a series of other articles (time permitting) about possible ways to fund your robot projects.  On the horizon: angel investors, crowd-sourced funding, SBIR / STTR, licensing, bootstrapping, etc.

 

Comments

Thanks for a interesting list, it will be interesting to see the trend for 2012.

This is another one: Fits.me

Hi,I am a founder of an education-robot company in Shanghai China. I am very interested in  your news about robot, so would you please send your new messages to my email huzuo@126.com. Thanks!

Joy Hu

Great article.   ISRG has a market cap of 20B.  Kind of shows why the biggest VC is in similar kind of thing.

—Anonymous

Excellent article sir. Hopefully, the VC firms shall notice the stark difference and choose to invest more in hardware-based startups and companies.

—Shashank Kulkarni

 

@Anonymous, thanks!  I missed that one (see list below).

@Per, I already had Fits.me recorded for 2012's list.  You'll notice that their funding round (undisclosed amount?) was not announced until February 2012.

@Everyone else... It seems that I missed a number of funding events.  Someone pointed out to me that I should have just searched Xconomy for "robot."   That leads to the following list of missed events:

  • RoboteX raised $2 Million
  • Harvest Automation raised two rounds in 2011.  I mentioned the $7.8 Million round in November 2011, but missed the $2.5 Million round in July 2011.
  • MedRobotics also raised two rounds in 2011.  I mentioned the one for $11.7 Million in December 2011, but missed the one for $6.6 Million in March 2011 when the company was still called "CardioRobotics."
  • Liquid Robotics also raised two rounds in 2011.  I mentioned the $22 Million round in June 2011, but I missed the $18 Million round from January 2011.
  • As mentioned by Anonymous in the comments, Prioria Robotics raised $4.5 Million.

 

It seems like there were a lot more follow-on rounds that I initially reported.  That's pretty curious, since web startups only tend to raise funding every 12-18 months (based on my entrepreneurship readings) whereas these robotics companies raised new funds after just 6-8 months. 

As you can see, I missed (at least!) $33.6 Million in my initial list.  I will expand the original post to include these missed events.  I'll try to add the new companies' bio sketches over the next few days during some free time.

—Travis Deyle

Hardware based startup are always cash hungry and it is often difficult for VCs to get multiples at the exit. Anyway, one of the promising robotic markets is mowing. Still a niche, the growth figures are impressive (~30%). It think the product is at least complementary as it offers new possibilities like night mowing, fleet mowing, etc.

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