“Our planet has not seen revolutionary breakthroughs in the offline world for many years.”
This is now changing, in part as the internet of things affects industry but also as robotics and three-dimension (3D)/addidative manufacturing – see Economist article – personalises production, even of food.
Global Corporate Venturing will look at 3D manufacturers, such as Netherlands-based healthcare company Philips’ spin-off Shapeways, in a forthcoming article (please let me know your thoughts). This weekly comment section, however, has previously analysed robotics after Japan-based Softbank took a majority stake in Intel Capital-backed Aldebaran but a congruence of events this past week means it is worth another look.
Dmitry Grishin, co-founder of Mail.Ru Group, the largest Russian-language internet company, supplied the quote in the first line of this comment at the launch of his $25m investment fund targeting personalized robots this past week. The new fund, Grishin Robotics, looks at how innovations in software, the internet and smartphones can be applied to robotics to make them more relevant for people, rather than just to manufacturers.
Although George Devol applied for the first robotics patents in 1954 (granted in 1961), most of the applications for their use since then have been for industrial use, such as in car plants, warehouses or oil and gas exploration, such as Saudi Aramco’s use of Resbot nano-robots in reservoirs and Liquid Robotics’ recent joint venture with oil services group Schlumberger to sell Wave Gliders to scout the oceans.
The global industrial robotics market was estimated by ReportsnReports.com to be worth $25.71bn in 2012 and expected to reach $32.8bn in 2017 at a 5% compound annual growth rate. Meanwhile, personal robots in all forms only sold about $570m in 2010, according to a Business Week news article (via Singularity University’s round-up), which added that some predicted service robot sales, such as IRobot’s Roomba vacuum cleaner, could increase to more than $18bn in the next three years.
In February, IRobot invested $6m in US-based telemedicine company InTouch Health as applications for robotics starts to cross more sectors and attract more money.
Last week, Rethink Robotics (formerly Heartland Robotics), founded by IRobot co-founder Rodney Brooks to develop a manufacturing robots, raised $30m in its series C round from venture capital firms Charles River Ventures, Highland Capital Partners, Sigma Partners and Draper Fisher Jurvetson, and Bezos Expeditions, the personal investment company of Jeff Bezos, founder online retailer Amazon.
Ironically, much of the recent VC interest in robotics has come from Amazon’s purchase of Kiva Systems, a maker of robots that service warehouses, including Amazon’s, for $775m in cash (see profile below). Brooks on the sidelines of the Thomson Reuters’ PartnerConnect conference earlier this year said he had received more calls in the week following Kiva’s sale ahead of its C round closing.
The blurring of interests between family offices, corporate venturing and VCs is creating long-term systemic change in industries and provides hope that entrepreneurial areas beyond consumer internet can be funded. However, it seems to be an area where corporate venturing (including private equity-backed portfolio companies worried about the disruption to their free cash flows) and long-term family offices might be better positioned to fund the robotics industry’s nascent development as it threatens to disrupt businesses outside most venture firms’ sphere of experience.
But the one area that seems resistant to using robots and algorithms appears to be venture investors themselves, according to Thomas Thurston, president and managing director of Growth Science International, in a guest comment for Global Corporate Venturing in 2010.
It could be their archaic reliance on gut instincts and recommendations from a coterie of peers will eventually be changed with robots replacing people in some areas but the process seems painfully slow when compared to how other industries have adapted. This is a pity given how poor most of their performances have been but an opportunity for those that do – it might even help when it comes to backing robotics start-ups themselves.