Issue #51 - The Future of Manufacturing
Topics this time: vertical integration, why now moment in manufacturing, recent development in AI and robotics, and lots of new funding rounds in Q3 2024.
👋 Welcome to Issue #51 👋
Hey there!
you have probably noticed that my past two Newsletters were slightly different. I’ve published my Interview with Randy Altschuler (Co-Founder and CEO Xometry) and my Interview with Manuel Bönisch (Co-Founder and prev. CSO at ProGlove). There are more interviews on its way but this Newsletter is again a traditional update about what happened in Q3.
I’m currently spending time on trying to understand the impact of AI on our industry (Palantir is great at marketing it). There is a lot of enthusiasm but I have not seen real numbers where AI could already proof its potential ($$$ cost savings). If you have any data on this, please message me.
Enjoy reading - and as always, I appreciate any kind of feedback.
Robin
Got a friend or colleague interested in manufacturing? Help me spread the word by sharing the newsletter if you like it!
I. What I’ve enjoyed reading 👇
🤝 Vertical Integrators - the integration is the innovation
Packy McCormick has written a post why he believes that some of the biggest future companies will be "Vertical Integrators" – businesses that combine several proven technologies to build better products (see graphic below). Instead of focusing on one thing, these companies control the whole system. SpaceX is one example since SpaceX builds rockets and handles everything from launch to landing. The post compares this to older "Aggregators" like Google or Uber, which grew by connecting people and services rather than owning or creating the supply. The key idea is that solving big physical problems will require building and controlling complex systems from scratch.
🫰 A good time to invest in Industrial Tech!?
I’ve read several articles from investors on their believes that now is a great time to invest in Industrial Tech. The General Catalyst team has written about its thesis on “resilience” that includes applications in AI, Robotics and Energy to “help industrial incumbents in Europe modernize, boost efficiency, and become more competitive in the upcoming years”. NGP Capital is convinced that it is “the most exciting time to invest in Industrial Tech in decades”. While at the same time, Ironspring Ventures has launched a new $100M fund to invest in industrial startups. I’ll expect an active Q4.
🤖 The rise of industrial robots in the world
The adoption for mobile robots in warehouses for tasks like moving goods and helping workers has increase a lot in the past few years. While sales of mobile robots are growing, some companies are still slow to adopt them according to this report. The main bottleneck is that it takes a long time to see the benefits and often 2-3 years for ROI payback.
With rising wages and aging population, industrial robots are also more common on Chinese factory floors. While Japanese and European robotic makers are still playing a role there, China wants to double down on its own robotic production. This is important since 52% of all industrial robots in the world were installed in China in 2022. One thing is clear - the number of industrial robots will increase drastically, the question is only how fast and where.
🤖 A general purpose robotics platform
AI is advancing quickly, but robots performing physical actions haven't kept up due to challenges like cost and task complexity. Recently, however, there's been a big increase in research, funding, and talent focused on robotics, pushing the field forward. Oliver Hsu from investor a16z believes that this progress could soon lead to general-purpose robots, making it easier for more developers to create innovations in robotics. Below is an overview how the functional market structure for a new robotics could look like:
👀 Deep Tech Hardware Napkin
Inspired by P9 Capital’s SaaS Funding Napkin, First Momentum Ventures has created a fundraising framework for Deep Tech Hardware startups. They have surveyed 30 Deep Tech VCs from 8 countries who contributed over 100 data points (and validated by ca. 1000 data points from Dealroom). The napkin below is a result of that and you can read more on their findings here.
II. About industrial Startups and Companies
🤑 Skild has raised a $300M Series A led by Lightspeed
Skild AI, a robotics company founded in 2023, has raised a massive $300M Series A funding, valuing the company at $1.5bn. They are developing a general-purpose AI model for robots, enabling them to handle tasks like manipulation, locomotion, and navigation in real-world environments. Their technology could help solve labor shortages by making robots more adaptable and useful in industries like healthcare, manufacturing, and construction. The company’s goal is to build artificial general intelligence (AGI) for the physical world - a very bold vision.
🤑 Guidewheel has raised a $31M Series B led by Decarbonization Partners
Guidewheel has raised a $31M Series B to scale its AI-powered platform that connects factory machines to boost efficiency and reduce energy use. Their non-invasive sensors track real-time machine data, helping manufacturers like General Motors and Johnson & Johnson increase production and meet sustainability goals. The funding will accelerate product development and customer support as Guidewheel aims to help factories reach peak sustainable performance.
🤑 Graymatter has raised a $45M Series B led by Wellington Management
GrayMatter, another robotics startup, has raised $45M a Series B funding, bringing its total funding to $70M. The company’s AI-powered robots use "physics-informed AI" to self-program and handle complex, variable manufacturing tasks like sanding and polishing. Their robots work faster and more efficiently than manual labor, reducing production time and waste for industries such as aerospace, automotive, and metal fabrication.
💰 Nano Dimensions to acquire Desktop Metal
Nano Dimension is set to acquire Desktop Metal in an all-cash deal, offering $5.50 per share, which could drop to $4.07 per share due to adjustments like transaction costs. This acquisition values Desktop Metal at $183M or potentially only $135M. The merger aims to combine both companies' strengths in 3D printing and digital manufacturing, covering metal, electronics, polymers, and ceramics. The deal is subject to regulatory approvals and Desktop Metal shareholder consent. It’s worth noting that Desktop Metal went public by way of SPAC at a valuation of $1.8bn in 2020, see its investor presentation from back then.
⛔ Shut down of robotics startups
Ready robotics has shut down after a funding round fell through. The company aimed to create a universal OS for robots, but competition from existing robotic manufacturers' operating systems made it difficult to succeed. The company had pivoted to a palletizing system, but it wasn't as effective as hoped. Ready Robotics is one of several robotics startups that have recently closed due to challenges in the robotics market including Bossa Nova Robotics and Dextrous Robotics. While I often highlight funding rounds, there are no guarantee for success.
III. Additional funding news in short 👇
👉 Bright Machines (US): has raised a $106M Series C that included Nvidia and Microsoft as investors for its full-stack automation solutions. Read more…
👉 Standard Bots (US): has raised a $63M round led by General Catalyst for its AI-powered robots. Read more…
👉 Cartken (US/DE): has raised a $10M round led by 468 Capital for its AI-powered robotics technology that automates the transportation of goods both indoors and outdoors. Read more…
👉 Inbolt (FR): has raised a €15M round led by Exor Ventures for its real-time robot guidance solutions. Read more…
👉 Datch (US): has raised a $10M Series A led by Blackhorn Ventures for its AI-powered voice assistants for industrial companies. Read more…
👉 Seeq (US): has raised a $50M Series D led by Sixth Street Growth for its industrial analytics solution. Read more…
👉 Cerrion (CH): has raised a $5M round led by Goat Capital for its AI-powered video platform to monitor critical production areas, learn normal processes, and detect deviations in real-time. Read more…
👉 Seegrid (US): has raised a $50M Series D led by Giant Eagle Incorporated and G2 Venture Partners for its autonomous mobile robots. Read more…
👉 Forterra (US): has raised a $75M Series B led by Moore Strategic Ventures, XYZ Venture Capital, and Hedosophia for its autonomous driving system for defense and industrial customers. Read more…
👉 Reshape Automation (US): has raised a $5M Seed round led by Ironspring Ventures for its end-to-end operational efficiency platform. Read more…
IV. Additional content and the I4.0 Landscape
My Industry 4.0 Landscape
I’ve updated the landscape in January this year and will do another update at the end of the year. There are ca. 600 active startups in my Industry 4.0 landscape. Click on the link for a larger version. If you think there is something missing, then please let me know.
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