Discover more from The Future of Manufacturing
Issue #36 - The Future of Manufacturing
Topics this time: the hiring and talent crunch in automotive, made-to-order electrical vehicles, a new Industry 4.0 unicorn on the horizon, and how to make engineering teams more collaborative.
👋 Welcome to Issue #36 👋
Looking back at the last few weeks, the chip shortage has been one of the most discussed topics in the industry. Similarly, (German) people in the automotive industry have been quite surprised by Tesla's Elon Musk dialing into Volkswagen executive conference. On the startup side, the investment activity has slowed down a little bit after a very hectic summer but you will find a number of new investment round further down in this newsletter.
Enjoy reading - and as always, sharing and feedback is a gift 🙏
I. Courses and our Community
👩🎓 Manufacturing Masterclass (in German): we’re teaming up with Axel Springer hy for a German version of the Digital Manufacturing Masterclass. This online course is specifically made for German speakers and will start on the 9th of November 2021. We have an amazing list of experts in this course from companies such as Trumpf, Zeiss, Bosch, Lufthansa, including Christoph Keese 👉 Register now - and even better, students get a 90% discount (make sure to select “student” when registering).
👪 Future of Manufacturing Community: Our community has crossed 200 people just recently. 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 us. Join the waitlist here and follow us on LinkedIn to stay up-to-date.
🏭 Community session: we’re hosting a community event about Scaling AI-powered health & safety solutions for factories together with Sercan (CEO & Co-founder at Intenseye) on the 8th of November. We’ll discuss topic such as how to use AI in a manufacturing environment, land & expand sales strategies for industrial startups, and their journey from Istanbul to New York. Sign-up here.
II. Work with us
🚀 To grow our team, we’re hiring for the following roles:
Get in touch if you would like to work with us. More to come soon!
Got a friend or colleague interested in the future of manufacturing? Help me spread the word by sharing the newsletter if you like it!
III. What I’ve enjoyed reading 👇
👩🏭 Delay in shift to electric vehicles could cost Volkswagen 30,000 jobs
Tesla has pushed Volkswagen to speed up its transformation to electric vehicles. The peak capacity for Berlin Factory will be from 5,000 to 10,000 cars a week, which is more than 2X of Germany battery EV production in 2020. The German auto industry could lose 100,000 by 2025 as a result of electrification as it requires fewer workers than an internal combustion engine car.
Herbert Diess, the CEO of Volkswagen, told a supervisory board that the company could lose 30,000 jobs if it transitioned too slowly to EVs. However, the worker’s council and the union from Lower-Saxony (Volkswagen’s second-largest shareholders) stated the job cut is “absurd and baseless” and “out of the question”. Diess was also called out for having “neither empathy nor sensitivity for the situation of the workforce” by Daniela Cavallo, the council’s lead representative.
The delay of Volkswagen’s EV transition shows in three areas:
Late in the Game Volkswagen’s largest plant with 50,000 employees will not produce any EVs until 2026 with “Project Trinity”
Low Efficiency Tesla aims to produce 500,000 cars with 12,000 employees. Volkswagen has produced 700.000 cars with 25.000 employees
Slow to Market The company could add Car charging and energy business to existing IPO plans for the battery division by 2024
👩🏭 Battery giants face skills gap that could jam electric highway
The South Korean battery giants LGES, SK On, and Samsung SDI, all face a skills shortage as they can’t find enough technicians with the training needed to match the exponential growth in the battery sector.
Global battery sector has grown 2X over the past five years and will be 3X in size to almost $90 billion by 2025. Re-/up-skilling is needed as the battery industry needs 800,000 new workers by 2025, by the EU's European Battery Alliance planning group.
Competition for talents is strong between domestic and international competitors, including CATL from China, Panasonic from Japan, and Northvolt from Sweden.
LGES collaborates with prestigious Korean University to launch a new Battery-smart factory department to guarantee jobs for graduates. Executives have been flying to the U.S schools to lead recruiting events. Battery specialists in South Korea can earn up to $85,000 a year, almost 3X of the average annual salary.
Despite the growing skill gap, LGES plans to raise the capacity from 115 gigawatt-hours(GWh) to 430 by 2025 that could power 7.2 million EVs. SK Innovation aims to 5X their production capacity to 220 GWh by 2025 and plan to invest $11.4 billion with Ford to build three factory plants in the U.S.
🤖 Companies lean on automation tech amid hiring crunch
One-third of C-suite executives are turning to automation to contend with hiring shortages. Companies are assessing where automation technology can knock off redundant tasks, an area where they've already found early success, according to Mike Hughes, managing partner at West Monroe. Examples include data preparation or vendor payments.
Walmart said it was opening six new “Walmart Academies'' to upskill supply chain workers. Nike in 2020 developed more than 200 robots in a collaboration with Geek+ to meet the rapid growth in e-commerce while mitigating labor shortages and high labor wages.
🏭 Foxconn launches three made-to-order electric vehicle concepts
Foxconn unveiled three EV concepts: Model C sedan, Model E sports-utility vehicle and the Model T commuter. Targeting EVs production is Foxconn’s source of growth beyond low-margin electronic assembly. It plans to build for automotive customers rather than sell under its own brand. Its development can be summarized as:
Production Plant secured: Ohio Auto Plant deal for US$280 million from embattled startup Lordstown
First Delivery planned: Yukon Motor from Taiwan as the first electric-car customer and first electric bus delivery in 2022
Strong Relationship with Apple: it’s noteworthy that Foxconn is the largest iPhone assembler, 50% of Foxconn’s annual sales are from Apple
IV. About industrial Startups and Companies
🤑 Augury Raises $180M to become one of the first Industry 4.0 unicorns.
The leading IoT and AI-driven Machine Health solution provider announced $180 million in new funding led by Baker Hughs with new investor SE Ventures from Schneider Electric. With this round, Augury has raised a total of $286 million and reached $1 billion in post-funding valuation.
Machine Health uses the Internet of Things and Artificial Intelligence to predict and prevent industrial machine failures and improve machine performance. Machine Health allows manufacturers to reduce downtime, increase production capacity and productivity, optimize the cost of industrial asset care and accelerate their digital transformation.
Augury’s customers include Colgate-Palmolive, PepsiCo, Hershey’s, ICL, and Roseburg. The company’s Machine Health solutions deliver an ROI of 3x-10x for customers, with programs paying for themselves within months.
🤑 Reliable Robotics has raised $100M from Coatue.
The California-based company develops autonomous cargo planes systems to allow licensed pilots to remotely supervise flights from the control center. The solution can bring the cost down and increase aircraft utilization, which has a similar business case to self-driving trucks. Now the company just raised $100M Series C led by Coatue.
Reliable Robotics has been working on automation systems for existing aircrafts and will use the funds to develop its first aircraft certification program. The main selling point is connecting regional and municipal airports across the country. The Federal Aviation Administration (FAA) has greenlit a number of authorizations for experimental unmanned aircraft.
🤑 CoLab has raised $17M led by Insight Partners.
The Newfoundland-based startup provides a web-based collaboration tool and issue-tracking platform for engineering teams. Founded in 2017, the platform allows manufacturing teams to easily share and review design files while getting feedback in real-time. After joining YCombinator two years ago (YC S19), the company just raised $17M led by Insight Partners.
The idea for CoLab originated while founders Adam Keating and Jeremy Andrews were building one of the world’s first hyperloop pods for SpaceX and working on the Model 3 program at Tesla. They say the teams that were building physical products were using tools 20 years behind teams that were building software products.
🤑 SimScale has raised 25M co-led by Draper Esprit and Insight Partners.
The Munich-based startup creates the world’s first SaaS application to offer engineering simulation across R&D stages and cycles, applications, and industries. The platform aims to remove the pain points of traditional and expensive computer-aided engineering (CAE) software. It has over 300,000 current users.
The company had raised €27M in its first Series C round in January 2020. With the current extension deal, the total amount of funding raised in this round is €52M. The company added computational fluid dynamics (CFD) offerings to its platform by forming a strategic partnership with Simerics.
🤑 Fabric has raised $200 Million led by Temasek.
Fabric offers fulfillment solutions for local and on-demand e-commerce by providing modular and software-led robotics with micro fulfillment centers. Temasek just led the $200M Series C to fuel Fabric’s growth.
To put things into perspective, Fabric rival Attabotics raised $25 Million in July 2020 and InVia Robotics last summer nabbed $20 Million. Softbank recently invested $2.8 billion in robotics and micro fulfillment company AutoStore. Supermarket chain Ocado deployed a robot that can grasp fragile objects without breaking them. And startup Exotec has detailed a system called Skypod that taps robots capable of moving in three dimensions.
🤑 Coboworx has raised €4.5M in seed financing
Coboworx (cutting edge robotics made in Germany) builds and commercializes do-it-yourself and process-ready robotics solutions, tailored for SMEs.
Coboworx also builds hardware to differentiate itself from other robotics software competitors. The underlying hardware today with its 30-year-old controller and interface is the bottleneck to prevent software from reaching their full potential. Coboworx built an open tech-stack that allows the entire ecosystem of software companies to build on top. Paua Ventures took part in the recent €4.5M round and you can read more about their investment thesis here.
🤖 ABB acquires ASTI Mobile Robotics for $190 million.
ASTI is a Spanish developer of autonomous mobile robots (AMRs) founded in 1982. The headquarters in Burgos, Spain will become ABB’s AMR business headquarters.
ABB said the acquisition will expand its product family into AMRs and beyond industrial and collaborative robot arms. ASTI solutions are currently selling at a revenue of $50M per year with a 30% annual growth rate. ASTI will now expand its reach from 20 companies to 53 companies worldwide, including China.
V. Additional funding news in short 👇
👉 There have been fewer funding rounds in the last couple of weeks so I decided to write longer about them above and leave this section out this time.
VI. Additional content and the I40 Landscape
Industry 4.0 Map - Reinventing the Factory Stack
There are now more than 500 industrial startups in the landscape after updating it in early July. Thanks again to nearly 100 people for attending our webinar about the landscape a couple of weeks ago. I promised some of you already that there will be another update before the end of the year.