Issue #21 - The Future of Manufacturing
Topics this time: another big acquisition, many new funding rounds, the manufacturing workforce, and cross-cultural understanding on the shopfloor.
👋 Welcome to Issue #21 👋
Topics this time: another big acquisition, many new funding rounds, the manufacturing workforce, and cross-cultural understanding on the shopfloor.
I'll give an updated presentation about the Future of Manufacturing at the Smart Manufacturing Roundtable hosted by GP Bullhound in Berlin in case you are invited (check out their report about manufacturing). If not, I'll also be at Slush in case you are there and want to discuss all things manufacturing.
As always, I hope you enjoy reading this and any feedback is much appreciated!
Disclaimer: thoughts and opinions expressed in the newsletter are my own.
What I've enjoyed reading
#factories#
🏭 Some of you might have seen the Netflix documentary "American Factory". In short, it's mostly about a shuttered General Motors plant in Ohio that was re-opened into a Chinese-owned glass factor and describes the cultural differences and relationships between the American factory workers and Chinese mid-level factory managers. If you don't feel like watching it, here is an interesting article by the Harvard Business Review about the struggles to find cross-cultural understanding and to teach workers difficult skills between Chinese-owned factories in different geographies (US, Africa). It also underlines how physically challenging and hard the work environment in a factory is and that manufacturing is a learnable industry. To increase the productivity of employees, you have to (continuously) teach and train them. The author thinks that manufacturing jobs can offer "relatively good alternatives to trying to precariously eke out a living in the informal sector" in Africa, I'd agree with that.
#workforce#
👩🏭 Nicolas from The Family has a different opinion on jobs in manufacturing. In his recent Newsletter, he argues that the obsession of creating good jobs in manufacturing is a "dead end" because, with all the automation and robotics, manufacturing cannot create as many jobs as the sector did in the past. Simply put, manufacturing does not matter as much as it used to be according to him - it's a provocative piece. One of the main points he is making is that politicians should focus on generating an economic surplus despite any industry focus, especially because today's working class is in proximity services and not manufacturing.
#logistics#
📦 The growth of the Chinese robotics company Geek+ is pretty impressive - within four years, the company has deployed more than 7,000 robots. The company offers four different artificial intelligence-powered robots from picking, moving, sorting to forklift systems. Due to that growth, Geek+ is building a new facility, designed with an annual production output in excess of 10,000 robots. Here is a picture of the moving robots that look quite similar to Kiva Systems:
#communication#
⚒️ With more than 10 million daily active users Slack has grown rapidly in the last few years especially within office workers - but why should factory workers not also benefit from it? The build-to-order server hardware manufacturer MBX Systems is using Slack both for internal communication but also external collaboration with its customers. To keep the overview, they are making use of the channel functions as a workspace for particular projects or areas of business. Ongoing communication and transparency with its customers enhance trust and satisfaction which is a big topic in hardware manufacturing. If you are coming from the software world you might wonder why I highlight this because in the tech world this is the standard but the de-facto standard in factories is still pen and paper.
About industrial Startups and Companies
#acquisition#
📈 Probably the biggest news of the last weeks has been OnShape's acquisition by PTC. What stands out here is the price - PTC is paying a whopping $470M. In a nutshell, OnShape is building cloud-based CAD software and got started by the former founders of Solidworks (acquired by Dassault for $360M). The company previously raised $170M from investors such as Andreessen Horowitz and NEA. There are a lot of rumors about the revenue and customer base and whatever is true, I think it's pretty clear that PTC paid a very high revenue multiple (>>10). I discussed the acquisition also with Istvan, CEO of Shapr3D, and he made it pretty clear why none of the other incumbents have been as interested as PTC in acquiring OnShape:
Autodesk has Fusion360, which is directly competing with it.
Dassault’s SolidWorks business is doing good, wouldn’t make much sense for them to acquire a competitor.
Siemens a bit harder to say but according to a few insiders they were not interested.
#fundraising#
🤑 Speaking of CAD - Colab is another interesting company in the CAD area that just came out of the YCombinator program. They're building a platform for engineering design and manufacturing collaboration where people can do collaborative reviews and issue tracking, After YC, they raised a $2.7M seed round from Spider Capital, Liquid 2, and FundersClub. Here is a screenshot of the product from their homepage:
#fundraising#
🤑 We're often looking at what happens inside a factory but there is also a very big opportunity in the after-market. This month Speedinvest and Fly Ventures announced their investment in Munich-based Remberg. Andreas from Speedinvestsummarizes their investment thesis in this blog post. In a nutshell, manufacturers use Remberg to gain transparency of their installed base — including assets that will be sold in the future as well as their installed base. Thereby, they gain actionable insights and move to a data-driven, proactive aftermarket. In turn, operators receive easy access to a mobile-first solution for aftermarket demands.
#fundraising#
👩💻 Besides Remberg, another Munich-based industrial startup could secure a fresh injection of capital.ProGlove, a provider of industrial wearables, raised $40M led by Summit Partners. In particular, ProGlove is known for its scanner glove that helps workers in warehouses and factories to improve the efficiency and effectiveness of scanning processes. ProGlove counts many big well-known logos such as Audi, BMW, Bosch, and Daimler to its customer base that is 500 organizations strong. The main benefit for these companies is that ProGlove reduces the scanning time by up to 4 seconds per scan that represents an improvement in scanning efficiency of as much as 50 percent for some of their customers. Here is a video of how the glove works.
#fundraising#
👩💻 I'm following Osaro that is building AI-based solutions for industrial robots for a while already. Now the company closed a $16M Series B funding round led by King River Capital. Over the last years, Osaro has developed software to automate piece-picking on a wide array of commodity hardware and robotic arms. The flagship product is called Pick and is designed for 1 million+ SKU inventories. Osaro plans to increase its deployments in many markets including Germany so you might see its Software running on robots in Europe as well.
#Assemblyline#
🏎️ To finish this section, here is a short video about the Tesla assembly line.
Additional thoughts on recent development
Startups by former employees of German industrial companies#entrepreneurship#
I recently took a closer look again at employees of German industrial companies who left to start their own business. I think it's one of the most interesting trends at the moment and good to see that this slowly materializes. Here is an updated overview:
Industrial Landscape #landscape#
There are now in total 300+ companies in the landscape (and 20+ on the waitlist):
Again, Thanks to everybody for supporting this newsletter and for sending me interesting links. As always, any input, shares, and feedback are always warmly welcome 🙏
Robin