Robco Ties $14M Lead to Sequoia to Bring Modular Robots to Industrial SMBs TechCrunch

Robco Ties $14M Lead to Sequoia to Bring Modular Robots to Industrial SMBs TechCrunch

After years of outsourcing and manufacturing offshore to countries with cheaper labor and larger production ecosystems, the United States and Europe are on a mission to bring some of that manufacturing work back to their shores. Today, a startup that it thinks can help with this shift is announcing some funding. robko, a Munich-based startup that has built a platform to design low-cost modular robots for small and medium industrial companies, has raised €13 million (near $13.8 million). The round — a Series A — is led by Sequoia, with Kindred Capital, Promus Ventures, Torsten Reil, Christian Reber and Daniel Dines all also investing.

Robco CEO Roman Hölzel who co-founded the company with Paul Maroldt and Constantin Dresel said the plan will be to invest money in expanding existing unit capabilities and continue adding more customers to its modular units. The “bots as a service” model.

Robco’s current offering is built around three components focused on lathe turning, laser drilling, and palletizing, with its business model reliant on customers asking for what they need, which in turn is delivered as a service to them – the robots themselves aren’t bought and stay on the company’s balance sheet. Robco with the idea that it can be replenished and reused for other customers when needed. The plan is to bring in more modules in milling and quality inspection, and also look at further geographic expansion, for example into the US market.

Even with hundreds of millions of dollars poured into a variety of industrial automation and robotics companies over recent years, Robco believes it has found a niche in the market by focusing on challenging tasks and building cost-effective solutions to address the needs of smaller manufacturers. In short, small and medium-sized businesses may need to increase productivity at times, but—either because of economies of need, labor shortages, or both—are unable to hire people to fill those jobs on a permanent basis. This, he said, is an area that those who make larger machines for larger industrial customers have not done.

“When we think about the market, we think there are two categories that dominate the market,” Holtzel said in an interview. “One is component manufacturers, and the other is a fragmented market of system integrators who build costly, craftsman-like robots where you pay $250,000 per solution. No company has crossed the gap to [provide] Great, fun technology that can be deployed in days or months. We do not sell bots or software. We mainly provide automation service, solve a concrete problem.”

Höltzl describes the traditional approach to hiring machine operators as the “classic status quo” — something he saw firsthand in his parents’ small factory, which inspired the founding of the company in 2020 — and not, as you might have thought, Covid-19 and the pressure it has put on in-person work, on Although that certainly gave him a strong current to generate interest and eventually sell his ideas in the market. One reason was that many factors had to lay off their staff instead of just furloughing their staff and then when it came time to go back online they couldn’t complete tasks and some of their very expensive manufacturing machines remained vacant and that was before considering holidays Weekends and evenings when the staff there weren’t working. He cites statistics that say there are about 2 million vacancies in Europe, with labor costs increasing by 6.6% annually on average.

The cost comparison with using a Robco bot is a big deal: Today, he said, the company typically charges $1,000 a month, with costs changing based on the length of engagement (costs drop if contracts are longer), with total fees rising to $4,000. / month depending on the complexity of what the customer needs. He said typical deployments start at 10 modular machines.

This is coming off at scale, he noted, with strong triple-digit revenue growth, “exciting unit economics,” and so far four patents on its hardware and technology from a founding team that grew out of a large research university and is therefore grounded in artificial intelligence and engineering expertise. – All the details that would attract investors like Sequoia only has relatively recently It has really doubled down in Europe with a shiny new office in London, but like others in the venture capital world, they are facing huge pressure around existing portfolio companies and how to weather the big storms that have hit the tech sector.

All of this means investing wiser, perhaps less exuberantly, which likely means sticking more strictly to theses about reaping returns and less about exploring interesting ideas.

Robco’s approach is unique [in the SMB manufacturing space] Because what they do is a bit like Lego. “They take a modular approach,” said Luciana Alexandru, who led the investment in Sequoia. “Whatever your use case is, you tell them what machine you need and they create the right format. Implementation times are short, a day or two. Then they create a software platform where you put modules together to create a digital twin. Then configuration and control is easy — something that was Previously required more technical expertise or external consultants.

She believes this is a huge gap that still needs to be addressed in the market, where 70% of manufacturers’ tasks for SMEs can be automated. “This is not a surgical robot, but something that can perform repetitive tasks that occur in manufacturing.” In that respect, interestingly, there’s a correlation between what a company like Robco seeks to fix and what a company like UiPath (a huge investment in Lixandru’s past, and in part how it established its name in VC) that focuses on robotic process automation, on the managerial end for business management.

“This company has come so far so far by so little,” she added, making one of the other big signals investors especially rely on these days, noting that Robco raised “only $2 million prior to this, [and] They have real customers, with a bunch of bots already deployed. We have a lot of data and evidence that it works. I am skeptical of 99% of bots [pitches] And I can see how difficult it is to build a market around it, but we see the “why now” here and that’s why we think it’s going to take off. “

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