Robots and the related technology is such a hot market right now. IDC projects the market for robotics and related technology and services to reach over $207 billion by 2021, a CAGR of 22% from 2016-2021. The bright future of this market is not going unnoticed by the venture capital community that has continued to inject cash into this growing market.
The latest announcement in the space comes from Locus Robotics that has announced a $25 million B round of funding bringing its cash raised to over $33 million. Funding has been flowing tremendously well into the robotics market over the past several years.
The above graphic represents venture capital injected into the robotics market (source: therobotreport.com). This kind of investment activity indicates several points worth looking at:
- Market Readiness - Across many industries companies are looking to robots to automate business processes. Everything from automating movement relative to the picking process in fulfillment to mopping floors in retail stores (Walmart just announced the deployment of robots to do just this).
- Technology Maturity - Robotic technology has been in use for several decades, in certain industries. What we are seeing now is the emergence of more capable robotic devices that can perform a wider variety of functions for an organization across a much wider range of industries. Robots are no longer contained to industrial manufacturing, they are becoming useful in logistics and distribution, retail, hospitality, healthcare, even physical security.
- Related Technology - Maturity of robotic technology must also consider things like artificial intelligence, IoT, improved mobility, and improved analytics among other things. As the broader technology market continues to improve, the improved technology is being layered on top of robotic applications helping to propel the robotics market into new and expanded use case opportunities.
- Digital Transformation (DX) - Tightly aligned to the previous point, organizations across industries are engaging in an aggressive effort to digitize their business. This point covers a lot of areas, including robots. Think of robots as a connected 'thing'. Now think about the value to your business that you might receive from being able to capture data related to the movement, handling, and execution of business processes that have historically been dull, dirty, dangerous, and manual. The data capture element related to business process execution and the ability to analyze previously manual processes is quickly becoming a part of many organizations DX efforts.
- The Cool Factor - Lets face it, robots are cool. For many, myself included, infatuation with robots began at an early age. Robots have been used in entertainment as a way to project a future where people interact with robots, which is pretty cool. Well, this has become a reality. Vendors in this space have delivered collaborative robots that are able to safely work alongside and in collaboration with humans in many instances, turning the cool factor into realizable value.
These points, as well as a sound future for robotic technology built on use case realization and expanding opportunities, is helping to make the case for venture capitalists to invest in the market for robotics. When thinking about these investments, it is not just about the investment in the robot manufacturers either. Companies that make autonomous navigation systems, motion control, vision systems, robot operating systems, analytic engines aligned to robots, etc. are all seeing an uptick in capital investment.
It will be interesting to see how much venture capital ends up being invested in this market in 2017, although it would be surprising to see growth at the scale which we have seen over the past two years. Regardless, the amount of money going into the field of robotics helps to make the case that the market is on the cusp of the robotic revolution.