Issue #22 - The Future of Manufacturing
👋 Welcome to Issue #22 👋
Topics this time: a framework for your early enterprise traction, trends in robotics, a few acquisitions and a big update on my landscape.
Update on the Newsletter: I started this newsletter two years ago and wanted to thank you for your continuous support and all the feedback I have received until today. As you can imagine it costs a lot of time to curate the content and write the newsletter every month so I decided that I will do it less frequently and only write the newsletter once per quarter going forward. Thanks for being with me so far and I hope you will stick with me in the future! 🙏🙏🙏
From Mailchimp to Substack: You might also recognize that I moved from Mailchimp to Substack. This gives me the opportunity to list all my previous Newsletters as blog posts here so you can always read through the previous issues. Let me know if you have any feedback.
Disclaimer: thoughts and opinions expressed in the newsletter are my own.
What I've enjoyed reading
#EarlyEnterpriseTraction#
📝 From my discussions with founders who are selling to large corporates, I realized that it’s often not very easy to communicate the traction with other stakeholders such as investors if there is not much data yet. In the last couple of months, I worked with a bunch of founders on how we can make it easier to report their early enterprise traction. The result of these discussions is a framework that covers essential questions which you need to have answers to and a framework for how you can report your early enterprise traction (check it out here!).
#Robotics#
🤖 According to TechCrunch, investments in the robotics space continue to expand and 2018 has been a record year when it comes to total invested capital ($5bn) and the number of deals (nearly 400). They also put together a summary of what's exciting in the robotics space and the most interesting opportunities by 13 leading VCs in the space such as Lux Capital or DCVC. My favorite is the one from Shahin at Lux where he also highlights to "focus on increasing HUMAN productivity (vs. trying to replace humans)" - I cannot agree more (see my post here).
#EnterpriseSales#
📦 Navigating through complex Enterprise Sales processes is very challenging, especially if you have to do it for the first time. Sarah from Dawn Capital has put together a comprehensive list of resources to demystify the process of selling enterprise software - from sales-specific reads to pricing and hiring. I highly recommend reading these resources.
#DigitalTransformation#
📟 UVC Partners, Cherry Ventures and Matthias Hilpert conducted an interesting study about corporate innovation of German Dax companies. The main findings are:
German DAX Corporates invested EUR 404bn or on average 3.3% of revenue in Innovation
96% Internal Innovation (R&D): EUR 388bn
Only 4% External Innovation (M&A, Corporate Venture Capital, and Acceleration): EUR 16bn
... whereas the US and China peer’s investments in External Innovation are 2x and 12x higher compared to DAX30:
US peer´s share of External Innovation is almost 9% and
China peer´s share is over 50% of overall investments into Innovation
As the numbers show, German DAX companies underinvest in external innovation. To me, this is no surprise but it would be great to see if the development would go in the right direction - especially on the M&A side.
About industrial Startups and Companies
#FromServiceToSaaS#
📈 This is an interesting breakdown of PTC's revenue and the switch to SaaS:
2014: $27M SaaS revenue
2019: $668M SaaS revenue
SaaS revenue went from 2% to 50% of revenue
That resulted in 4x the valuation since then, SaaS ftw!
#Acquisition#
🤑 Xometry, the US-based marketplace for on-demand manufacturing is making a stronger push towards Europe by acquiring its Munich-based counterpart Shift. The terms are not disclosed and the acquisition comes only one year after Shift raised its seed round from Cherry Ventures. The acquisition itself does not come very surprising since Xometry was quite vocal that it would like to conquer Europe with the help of an acquisition. Just recently Xometryraised $5M from Robert Bosch Venture Capital and the Shift founders will now be heading up Xometry’s newly formed European business.
#Fundraising#
🤑 Augury, a company that provides predictive maintenance solutions, added an $8M check from Qualcomm to its $25M Series C that it raised in January this year led by Insight Partners. The company focuses on machine health monitoring and recently acquired the ML startup Alluvium to strengthen its industrial data stream platform. The numbers the company claims are pretty impressive, i.e. they are "able to reduce breakdowns by 75%, increase uptime by 45%, and lower asset costs by 30% by spotting the earliest signs of breakage". This might be a good reason why they count companies such as Johnson Controls and Grundfos as customers.
#Acquisition#
📡 Siemens tries to strengthen its factory automation unit by acquiring the edge computing platform Pixeom. Pixeom's technology can analyze data locally at the machine-level and only send relevant data to higher-level edge management systems. With this move, Siemens makes another step into its digital enterprise portfolio after acquiring the low-code IIoT platform Mendix earlier this year.
#Fundraising#
📊 The manufacturing analytics company Bigfinite just closed a $15M Series B led by Atlantic Bridge and Honeywell Ventures. Bigfinite's twist is that they focus on regulated industries and help pharmaceutical and biotech companies to optimize their manufacturing processes.
Additional thoughts on recent development
Take-aways from 2019#summary#
As you can see below, I just finished the latest iteration of my Industry 4.0 landscape. Reflecting the year and looking back, I think the main takeaways for 2019 are:
A significant number of companies shut down in 2019, I had to remove quite a lot of logos, especially in robotics.
There have been a few M&A activities: e.g. Shopify acquired 6 River Systems, Xometry acquired Shift, PTC acquired OnShape. Too little from industrial corporates.
The biggest relative increase in the number of companies has been in Shopfloor Workflow / App Plattform.
Breakout companies this year have been Samsara and Augury among others.
The EU ecosystem is still behind the US when it comes to bigger funding rounds.
Industrial Landscape #landscape#
There are now in total 330+ companies in the landscape:
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