Odense, Denmark, is a triple threat as it develops robotics, aerial drones, and healthcare systems in a thriving community. A network of organizations is working to help connect companies with robotics funding. Can the Danish city be the European capital for robotics startups and a model for incubators?
The three organizations are the Odense Robotics startup hub, the UAS Denmark network for testing unmanned aircraft systems, and the Odense Health cluster for healthcare innovation. Each one connects academic and private researchers, investors, and government authorities, as well as robotics suppliers, international partners, integrators, and end users.
“We can document €3 million [$3.34 million] in funding entering companies in the robotics environment in Odense within the past 12 months,” said Michael Hansen, an investment manager at Invest in Odense. “We have a minimum of €1 million to €2 million [$1.1 million to $2.2 million] more coming in the near future.”
“About 15 to 18 companies have received funding, mostly but not all startups,” he told Robotics Business Review. “We’ve started from the bottom up, interviewing companies. We’ve helped two-thirds of companies get venture capital/private funding.”
The robotics funding is from a combination of private angel investors, “soft funding” (money without equity), and a private fund worth approximately 100 million Danish krone (€14 million or $15 million), according to Hansen. Some of that investment is coming from business angels already in the robotics industry.
A governmental fund is also investing in two companies, he said. At this past spring’s RoboBusiness Europe in Odense, the two judges for the Pitchfire competition came from local investment funds.
“UR got us some attention,” said Hansen, alluding to the success of collaborative robotics maker Universal Robots A/S.
How to learn about robotics funding
“We get CEOs and investors to talk to each other about what they’re doing and why,” Hansen explained. “It can be very difficult — a company should always talk to several investors.”
“In addition, all of a company’s founders need to agree on direction, and they need to be united in negotiations,” he added. “There are often multiple rounds of venture capital, but investors are waiting for breakthroughs.”
“The process [of obtaining robotics funding] isn’t typically part of a technical education; it’s more in the area of entrepreneurship,” he said. “[Robotics developers] learn when they enter the startup hub and meet with business developers. They then develop a strategy for an investment plan at that point, including a plan for exit as well.”
“We have three or four business developers working inside Odense,” he added. “We are planning to offer master classes in fundraising to all our companies.”
Building a robotics funding network
“We’ve developed an investor platform connecting funding with companies,” Hansen said. “When companies are getting close to reaching out for external funding, they contact us.”
How is Odense’s investor platform different?
“The investors on our platform have said they have all invested or will invest in three verticals — healthcare; smaller, flexible industrial robots; and drones,” Hansen said. “There’s some automotive as well, but the main focus is on collaborative robots.”
Invest in Odense has built its platform to tap into regional robotics networks, monitor costs, and connect angel investors with businesses.
“We’re building up our CRM [customer relationship management] system in the moment,” said Hansen.
Hansen’s team helps develop a business plan and investor pitch, and it’s working hard to get all investors on its robotics funding platform, national as well as international.
“Only a few people are working on the investor platform, but there’s the possibility of hiring consultants with specialties in business development and fundraising to help companies get ready for funding,” he said.
“We’re a small, agile organization that can add resources as needed,” Hansen said. “If we’re not flexible, we couldn’t be this unique or fast.”
More on European Robotics:
- How Will the ‘Brexit’ Affect U.K. Industrial Automation?
- EU Proposes to Tax Robots as ‘Electronic Persons’
- Dutch Agriculture Grows Influence With Robots
- Assistive Robots Showcased at RoboBusiness Europe
- Accenture to Invest €500,000 in RoboValley for Robotics Innovations
- Denmark Is Driven to Lead European Robotics
- Horizon 2020 Update: European Robotics Projects Proliferate
Expectations in the U.S. vs. Europe
“The development of companies is always an issue — typically, they need sales to justify a private investment,” Hansen said. “When a Danish company can get 1 million euros in Denmark, then it’s possible to raise €10 million or $11 million in the U.S.”
“The level of risk is lower — it’s sometimes easier to get funding in the U.S.,” he said. “We work closely with strategic partners in the U.S. to learn the Silicon Valley way of pitch training.”
“On the other hand, most of the hardware tech startups in our cluster are striving for their first sales within 12 to 18 months of starting,” Hansen added. “They are really focused on the customers’ needs and are able to generate turnover side by side with early-stage investments to accelerate their growth.”
Not only are Danish companies seeking funding in the U.S.; they’re also interested in hitting the American market earlier, “so funding and their go-to-market strategy go hand in hand,” Hansen explained.
By contrast, there is a lot of European Union robotics funding, including public or soft funding, but it’s more complicated to get, he said.
“Besides all the local and national funding, we’re working on two funding bridges — to China and the U.S. — for venture capital to be interested in companies in Odense,” said Hansen.
He noted that Odense was expecting three Chinese delegations within a few months, as well as two U.S. venture funds.