Issue #33 - The Future of Manufacturing
Topics this time: movement in the cloud MES market, automotive OEMs own software schools, developer tools for robotics, and a few more funding rounds.
👋 Welcome to Issue #33 👋
An Update on Courses & Community:
👩🎓 Our cohort-based courses: Our first course about Digital transformation in manufacturing #01 was a great success (NPS: 78). Thanks again to everybody who participated and contributed to the course.
We’re already working on launching new courses and will launch our Digital transformation in manufacturing #02 course again this October. More info on that soon but let me know if you are interested since we have limited capacity.
👪 Future of Manufacturing Community: We have 160+ members in our community, the waitlist is growing and we will invite more people over the next months. As a reminder, this community is designed for people who work on the digital transformation in manufacturing, coordinate and drive digitization projects, and scout new ideas. Please note, building a diverse community is a key priority for me.
Got a friend or colleague interested in the future of manufacturing? Help me spread the word by sharing the newsletter if you like it!
I. What I’ve enjoyed reading 👇
👩🏭 Rockwell acquired Plex Systems for $2.22bn.
Rockwell has made a strong push into the MES market by acquiring Plex Systems for $2.22bn. Plex has developed a multi-tenant SaaS manufacturing platform that helps companies to connect, automate, track, and analyze their manufacturing operations.
Plex Systems got started in 1995 already and counts more than 700 manufacturing companies to its customer base. Before selling to Rockwell, the company was in the hands of Francisco Partners, a global investment firm.
Personal opinion: I expect to see a lot of movement in the MES market in the next years to come. First, the big automation providers such as Siemens, Rockwell, Honeywell, etc. push into the market. Second, there are a bunch of new players emerging such as Factory Four and Tulip. They might not position themselves as an MES but offer some of the MES elements. Third, lots of (smaller) manufacturing companies do not even have an MES today and are an interesting target market for flexible plug'n'play solutions.
🏭 How Arrival has built a whole new production line.
Arrival is a UK-based company that got started in 2015 with a mission to build affordable, electric commercial vehicles such as vans and buses. However. the biggest barrier for new entrants are the penomenal costs that come with starting an automotive company and building an assembly line. Arrival tries to solve that by building microfactory cells and removing the steel press and the paint shop from the process entirely. To run a production line, the company expects to to use around 20 cells. Instead of steel, Arrival is using proprietary composite material. This long portrait about Arrival is a great and inspiring story about a young company that wants to change how commercial vehicles get built.
Most automotive OEMs such as Tesla, Daimler, and Volkswagen are also working on electric commercial vehicles. However, this does not stop Arrival of having racked up $1.2 billion in orders until today.
👩🚀 Automotive OEMs are building their own software schools.
To manage the transformation to becoming a software-enabled car company, Volkswagen has started to build its own training program for IT specialists called Faculty 73. The first 100 participants started the training in early 2019. Since then, Faculty 73 is offering 100 spots each year to applicants. Volkswagen needs thousands of software developers in the years to come so 100 spots per year is a drop in the ocean but a step in the right direction.
After watching from the sidelines for a few years, Mercedes-Benz just announced that they are also going to build their own software school similar to Faculty 73 (article in German). Will we see now every automotive OEM building its own software school? They all need the talent but I doubt that the massive investment to build an own academy will pay off. Rather than building their own schools, they should partner with some of the emerging software boot camps and other education providers. Volkswagen took the lead here again by partnering with Ecole42.
🏭 Siemens Mobility won $3.4bn in contracts from Amtrak.
Amtrak, the US National Railroad Passenger Corporation, has awared Siemens to design, manufacture and technically support 73 multi-powered trains. The contract is worth $3.4bn and the first trains will be delivered in 2024 after being manufactured in California. The trains will be equipped with remote monitoring and fully integrated digital diagnostics solutions which I expect is going to be the standard for every new train coming from Siemens. This fits well to Siemens stronger push into software that its new CEO Roland Busch recently underline. It’s also another example that hardware and software will come from the same provider which I guess will be similar for machine OEMs. The only caveat is that Siemens has already built software in the past compared to many machine OEMs.
🤖 Amazon and Alibaba are deploying new robots.
Both Amazon and Alibaba have each unveiled new robots they have been working on. Amazon wil deploy its autonomous guided carts it was been developing in its research labs in Boston and North Italy later this year. At the same time, Alibaba's logistics arm Cainiao Network will deploy 1,000 robots for delivering packages after very positive test results (150 packages a day, 98% customer satisfaction rate).
With the strong growth in e-commerce and rising demand for automation solutions, industrial robots have seen a big order increase as shown in the article:
If you want to see how Alibaba’s logistics robots work, watch the video below:
II. About industrial Startups and Companies 👇
🤑 Viam raised a $12M seed round led by USV.
Building robots is still really difficult compared to modern software development. Viam wants to make building robots much easier and to do so, the company has raised a $12M seed round led by Albert Wenger from USV. Albert describes Viam’s goal in his funding announcement as the following:
Their goal is to make building and programming a robot as simple as assembling web services. To this end, they are developing a series of core components, such as object recognition, navigation, and gripping. In addition, VIAM is making available an online testbed where new robot applications can be tested in an on-demand fashion available to any developer (instead of requiring costly upfront acquisition of robot hardware).
It’s noteworthy that the company got started by Eliot Horowitz, the former co-founder and CTO of MongoDB where USV was also the first investor. If you’re interested to follow Viam’s progress, you can follow their IG account.
🤖 Foxglove studio launched a visualization & debugging tool for robotics.
In recent years we began to see more developer tools specifically built for the manufacturing and robotics industry. A new company I came across is Foxglove studio, started by ex-employees from Coinbase and Cruise. The product helps developers to build rich visualizations and customizable panels to quickly understand what your robot is doing. The demo of the product looks impressive, make sure to check out the video below:
🤑 MachineMetrics raised a $20M Series B led by Teradyne.
To streamline machine data collection and production analytics, MachineMetrics has raised a $20M Series B led by the industrial automation and robotics company Teradyne. The company will use the funding to scale the company’s sales and marketing activities as well as to expand its partner ecosystem.
US-based MachineMetrics has nearly doubled its revenue in the past 12 months, employs roughly 50 people, and has raised a total of nearly $38M to date.
🤑 Crate.io raised $10M in additional funding.
Crate.io, the company behind CrateDB - a fully open source time series SQL database - has raised $10M in additional funding from existing investors such as Draper Esprit, Vito Ventures, and Flatz & Partners AG. This brings its total funding to approximately $31M. The company recently launched CrateDB Edge to run CrateDB at customers’ remote and offline locations and also offers a fully managed CrateDB-as-a-service solution.
💰 BMW iVentures focuses completely on sustainability with Fund II.
The VC-arm of BMW Group, BMW iVentures, has announced its second venture fund. The new $300M fund will focus on investments centered around sustainability in transportation, manufacturing, and supply chain. With its first fund of $525M, BMW iVentures has already made a number of investments in companies such as Xometry (manufacturing-as-a-service), DesktopMetal (3D printing), and Plus One Robotics (robotics). The fund is investing globally with offices in the San Francisco and Munich. BMW’s strong focus on sustainability is also visible if you take a look at the BMW Group Report 2020.
🤖 Zebra Technologies is about to acquire Fetch Robotics.
Zebra Technologies, a provider of various automation solutions, is set to acquire Fetch Robotics, a provider of autonomous mobile robots (AMRs). Fetch Robotics’ AMRs are used in fulfillment centers and distribution centers to optimize picking and automate manual material movement. Zebra’s venture arm had previously invested $15M in Fetch Robotics and will acquire the company for around $290M. The acquisition will help Zebra Technologies to bring advanced robotics solutions to its customers and accelerate growth in its intelligent industrial automation segment.
For those who want to better understand the difference between autonomous mobile robots (AMRs) and automated guided vehicles (AGVs), I can recommend this post by Jonathan Dworski.
III. Additional funding news in short 👇
👉 Esper (US): the IoT DevOps platform has raised a $30M Series B led by Scale Venture Partners. Read more…
👉 Claroty (US): the industrial cybersecurity company has raised $140M Series D co-led by Bessemer Venture Partners and 40 North. Read more…
👉 Zipline (US): the drone delivery company has raised $250M. Read more…
👉 Feelit (Israel): the predictive maintenance solution provider has raised an undisclosed sum from Continental. Read more…
IV. Additional content and the I40 Landscape 👇
Different pricing strategies in manufacturing
There was a recent discussion in our Future of Manufacturing Community about different pricing strategies for software offerings - besides subscription-based pricing - such as credits or usage-based pricing (“pay-per-use”). Especially pay-per-use pricing has been discussed in the past few years (e.g. Trumpf announced their pay-per-part business model last year).
However, based on our discussion, the feedback on alternative pricing models was quite negative. Everybody who participated in the discussion has faced similar challenges:
Decision makers are trying to plan and budget for SaaS products, therefore favoring the 'flatrate model'
Buyers do not want to be told they have a “limit” (if you sell them “credits”)
Pay-per-use does not work if you don't have the product to support a robust accounting / tracking methodology
The associated costs for a pay-per-use model are very hard to forecast
At least based on our discussion, I do not see emerging business models such as pay-per-use successfully implemented in the manufacturing industry in the short-term. Happy to get convinced if you think differently.
Industry 4.0 Map - Reinventing the Factory Stack
🆕 New milestone reached: there are now more than 500 industrial startups in the landscape after updating it in early July.
Thanks to everybody for supporting this newsletter! Comments, questions, or additional thoughts? Send me a note 🙏