RBR50 robotics firms accounted for the top four positions and seven out of fourteen overall in annual Venture Capital sweepstakes for 2011, as reported by Travis Deyle in Hizook. With a total of $164.4 million invested in robotics ventures in 2011, seven of the RBR50 accounted for $117.5?over 70 percent of the total (see chart).
By comparison, the more mature and vastly prolific Internet industry (one of the largest single economies in the world) reaped $6.9 billion in VC deals.
Specifically, cites GigaOm, ?997 VC deals in Internet-specific companies over the course of 2011, an increase of 68 percent in dollars and 24 percent in deals from the previous year, when $4.1 billion went into 807 deals. Internet companies accounted for 24 percent of all VC investments in 2011, compared to 18 percent in 2010.?
VC deals in robotics may seem anemic when stacked against the Internet?s billions, but much of today?s robotics is still young, still mostly in niche mode, and still in waiting for the killer app or killer something that will bust the technology loose.
As Hizook?s Deyle puts it, “Getting VC funding for robotics is a decidedly tough nut to crack. Robotics companies have large capital requirements for robot hardware, few potential acquirers, and almost no “Google-scale” breakout success stories (ie. IPOs).”
Given that David and Goliath scenario, robotics nevertheless pulled in $164.4 million, certainly nothing to sneer at. Fourteen in the robotics domain have what most VC?s are looking for, mainly: a unique product that?s market ready or near-market ready in a growing market segment where quite possibly an IPO or acquisition is not far off.
Joe Jones, co-founder and CTO at Harvest Automation?and co-inventor of the Roomba?has a PowerPoint slide in his kit that shows Boot Hill filled with headstones all inscribed with RIP. He says it?s a graveyard for robots, ones that had no obvious utility beyond being just a robot. His heedful advice: before building any robot, first find an industry or work flow where a robot can make a difference.
Joe and Harvest CEO Charles Grinnell never realized that there was a $17 billion industry out there with no robotic presence, yet sorely needed one: the greenhouse/nursery industry. They built a robot to meet a nursery work flow need and then found a VC group very interested in that specific solution?with $7.8 million for Harvest?s robots.
For roboticists gearing up for the 2012 VC season, remember Joe?s Boot Hill.
Okay, so for 2011, VCs made an investment in the outcomes of what?
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