F-Prime Capital has released its State of Robotics report, which it says provides “comprehensive insight into investment trends and exits”.
Over the past five years, 1,250 robotics companies have generated $20 billion+ of mergers and acquisitions, $15 billon of market cap across public companies, and $100 billion+ of unrealized value from private unicorns alone.
2022 saw a significant pull back in valuations for robotics companies as investors focused on higher revenue predictability and increased capital efficiency, though many companies were able to retain premium valuation multiples.
The report analyzes which companies should be classified as “robotics” and what use case they are pursuing.
Sanjay Aggarwal, venture partner at F-Prime Capital, says: “We’ve seen an incredible evolution of business models and investment dynamics in robotics, which has been difficult to define within traditional VC (venture capital) deal databases.
“The emergence of autonomous vehicles has been the catalyst for a new generation of engineers and entrepreneurs who are building the next generation of robotics companies, which are solving real-world problems.
“The growing number of opportunities, quality of entrepreneurs and market leaders in the industry are making robotics an attractive sector for VC investment.
“We’re excited to present our first State of Robotics report, providing valuable insight into investment trends and exits, and a glimpse into the future of the robotics industry.”
According to the report, the last five years saw $90 billion invested in startups across the global robotics industry, representing roughly 10 percent of overall VC investments in technology. Western markets, including the US, Europe, and Israel represent 70 percent of overall investment.
The report identifies three primary categories of robotics investments:
- Vertical Robotics (use-case specific, industrial-focused): One of the more exciting trends in the industry has been the growth of Vertical Robotics, with the sector defying the overall VC market by growing again in 2022. Vertical Robotics focuses on very specific use cases across a range of industries, including logistics, medicine, defense, and manufacturing.
- Autonomous Vehicles (public roads only): The major driver of investment has been for AV companies, with more than 50 percent of investments flowing to AV in most years. However, with the sharp pullback of investments in 2022, AV was particularly impacted as investors began to question the path to commercialization for many of these companies.
- Enabling Systems (hardware and software components for developing complete solutions): Rapid evolution of the building blocks for robotics enables start-ups to leverage off-the-shelf hardware, while innovating with modern advances in computer vision and machine learning. Rapid prototyping enabled by 3D printing also helps accelerate product development cycles.
The report also highlights Asia as an end-user market and an early adopter of robotics. For example, many companies focused on logistics robotics have found success selling in Japan. Meanwhile, several Chinese automotive OEMs are already rolling out LiDAR on production vehicles.