The Robots Are Still Rising, Albeit With Less Funding

Every so often, a startup comes along hawking a product that elicits the reaction: “I want that.”

The latest exemplar of this is Matic, developer of an AI-enabled robot capable of vacuuming and mopping on demand, detecting messes and skirting clutter.

As it solicits reservations for its bot, the Silicon Valley company, founded by a pair of dads with a distaste for cleaning, is also drawing interest from investors. Matic closed on a $24 million Series A round last week from backers including former GitHub CEO Nat Friedman, and Stripe founders John and Patrick Collison.

The financing marks a bright spot amid a somewhat toned-down period for robotics startup funding. Investment in the space is down sharply from the 2021 peak, in line with overall trends for global venture funding. For perspective we chart funding for the past six calendar years below.

Funding for U.S. robotics startups, meanwhile, shows a similar pattern:

Still relatively strong, thanks to AI

Relatively speaking, however, robotics remains a popular sector for venture dealmaking. While total funding is lower, the percentage of venture capital going to startups in the space hasn’t changed much since the peak.

Investors’ embrace of artificial intelligence factors into much of the robotics-related dealmaking. While this isn’t a new trend, it appears increasingly commonplace for funding recipients to cite AI as a core enabling technology.

This extends to early stage, where we’re seeing quite a few good-sized rounds for robotics startups with an emphasis on AI. That indicates investors envision potential for the creation of a new generation of unicorns in the space.

One of the biggest early-stage rounds went to Figure, which describes itself as an “AI robotics company bringing a general purpose humanoid to life.” The Sunnyvale, California-based company landed a $70 million Series A  in April, followed by a $9 million investment from Intel Capital in July.

There were some sizable Series B rounds for fulfillment bots as well. Nimble Robotics, a developer of AI-powered robots capable of autonomously fulfilling e-commerce orders, secured $65 million in a March financing. And Fulfil, focused on grocery e-commerce automation, bagged $60 million in February.

Meanwhile at Series C, Emeryville, California-based Covariant snagged $75 million in April, bringing its total funding to date to $222 million. The 6-year-old startup works at the intersection of AI and robotics, with a particular focus on warehouse automation.

Per Covariant CEO and co-founder Peter Chen, the use of robotics in industry and other applications has been “historically confined to executing repetitive movements based on programmed instructions.” In this emerging era of AI robotics, however, robots can have “the capability to comprehend their surroundings, make informed decisions, and adapt their actions according to changing circumstances.”

Familiar names at later stage

While a younger generation of AI-focused robotics startups scales up at seed through Series C, an older cohort of familiar names continues to snap up funding at later stages.

Two of this year’s largest later-stage funding recipients are drone companies Zipline and Skydio, which picked up rounds of $330 million and $230 million, respectively. Zipline is 12 years old, while Skydio was founded in 2014.

Another well-known startup that secured a big round was Elon Musk’s Neuralink, which plans to use a surgical robot to implant its devices in human brains. The company  closed on a $280 million Series D in August.

The largest round, however, went to Seoul-based autonomous mobility firm 42dot, which raised a corporate round worth approximately $787 million in May.

Rooting for the robots

Science fiction has produced all types of dystopian, distant future scenarios in which rooting for the robots works out very badly for humanity. In the more immediate future, meanwhile, there are also pressing concerns about the bot revolution, such as accelerated job losses due to automation (commonly a good thing in the long term, but often painful in the short term).

Somehow, however, many of us seem willing to accept a small risk of catastrophe in exchange for, say, a robot capable of picking up our dirty socks and putting them in a laundry basket.

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Illustration: Dom Guzman