June 15, 2024 in Artificial Intelligence

Insights into Robotics & Automation Investment Trends Emerging in 2024

Startup funding in robotics, automation, and computer vision companies recovered significantly over the last 12 weeks, with a total of $748.9 million being secured by US-based companies, according to announced fundraising events on Crunchbase. That's an increase of 190.5% compared to the previous 12-week period ending on November 14, where $257.8 million was secured.

Over the same period, the broader interest rate environment slightly improved, with 1- and 10-year Treasury yields declining by .25% and .41% respectively.

Announced fundraising amounts have now recovered beyond the heights of the first half of 2023, primarily driven by large Series C and D rounds, along with significant investment across the entire range of Series rounds measured.

Notable Raises in the Past 3 Months

In the first half of 2023, large investments into iRobot and UVeye, at $200 million and $100 million respectively, contributed to totals of around $500 million raised per 12 week window.

For the 12 weeks ending on February 6th 2024, delivery and logistics operations were a major focus. GreyOrange, developers of a robotic automation platform focused on warehouse operations, closed a $135 million Series D, pushing their total raised to over $428 million.

Starship and Elroy Air also secured large venture capital investments. Starship, makers of autonomous ground-based delivery robots with a focus on local delivery, announced a $90 million funding round, along with completion of their six millionth autonomous delivery. On the other end of the delivery spectrum, Elroy Air, which is developing an autonomous eVTOL air cargo platform, secured a $48.9 million round.

Another notable category includes agriculture, with significant rounds raised by Burro, Agtonomoy, and Farm-ng. While these individual investments are smaller, they represent a significant continuation of activity focused on agriculture and food-focused automation, which ranges from farm to kitchen-centric approaches. Part of the interest in this niche may be driven by the high turnover and significant shortage of workers, particularly in food prep, with the U.S Chamber of Commerce finding that food services experienced a consistent quit rate of above 4% for the last 4 years.

Funding Trends from 2023

While there is a large amount of variability over these shorter time windows, some trends from the last year are clear.

Early 2023 was dominated by large, later series rounds, with $501 of the $538 million raised coming from post-seed rounds.

Mid 2023 saw the dominance of post-IPO debt and equity raises, along with high-value Series A raises; meanwhile, late 2023 saw many seed funding events.

The most recent 12 weeks saw a continuation of the elevated level of funding activity, with 30 events recorded. The previous period was particularly active, with 33 events. Meanwhile, early 2023 was averaging 25 events per 12 week period.

Companies developing systems, AMRs, unmanned vehicles for air or sea, and appliance-style automation systems were all well represented in the last few months.

Potential Future Factors

Looking forward, 2023’s reduced level of M&A and IPO activities creates the potential for a rebound in exits and a corresponding replenishment of the capital pool.

Hot fields, like generative AI, may see an increased level of caution from investors as Gartner’s “Peak of Inflated Expectations” may already be passing. First-movers like the developer of ChatGPT, OpenAi, are facing multiple lawsuits for copyright issues, while the broader industry is facing calls for both self and government-led regulation.

Record valuations for large companies like Microsoft, Apple, NVIDIA, and Google can also reaffirm the opportunity for acquisitions as a viable exit option, even if anti-trust enforcement continues to present obstacles to some merger efforts.

Lastly, the ever-present geo-political risks feel particularly relevant this year, with wars and simmering regional conflicts already impacting significant trade routes.

On the political side, 7 of the 10 most populous countries on earth are holding elections, with nearly half the world’s population residing in a country that will hold an election. This includes the US, as well as Mexico, which has just overtaken China as America’s largest trading partner; additional important elections include South Korea, Taiwan, and India.

Meanwhile, Fed policymakers are providing no indication of a rush to rate cuts in the near term, particularly after a surprise uptick in consumer prices for January. Any interest rate cuts would have a positive impact on investment in the automation space but are now less likely in the near term. Lower borrowing costs, more positive investor sentiment, and higher valuations on the back of a lower discount rate would all create a more favorable environment for venture capital investments.

Leave a Reply

Your email address will not be published. Required fields are marked *

By browsing this website, you agree to our privacy policy.
I Agree