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Private Investing in RoboticsOpportunities for Advanced Robotics and Intelligent Systems

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Background and ContextHardware and Software Enabling Technologies • 15 years investing $200M in early-stage enabling technologies for institutional

investors in IT, Communications. Invested in hardware, software, and services

Robotics Research• 3 years visiting robotics research labs, incumbent OEMs, startups, systems

integrators and customers• Observed enormous requirements gap between structured and unstructured

environments, and the new capabilities implied by new enabling technologies

Strategic Robotics Fund:• $100M fund combining elements of traditional and corporate venture investing,

focused on next-generation robotics and enabling technologies that address unstructured environments

• Approach: Hybrid fund structure leverages strengths of both traditional and corporate venture investing

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Traditional Robotics vs. Intelligent Systems

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Opportunity

• Advance robotics and intelligent systems can address new markets that haven’t benefited from traditional robotic automation because of unstructured operating environments

• The operating environments are characterized by dynamic physical and business environments. Systems must be situationally aware, adaptable.

• New enabling technologies will allow advanced robotics to take on these unstructured environments

• Many of these innovations will also benefit traditional robotics applications (i.e., “backwards compatible”)

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Dynamic Innovation in Each Key Capability of Traditional Robotics

Sense Think

Act Collaborate / Cooperate

• Better, cheaper sensors (e.g. Kinect, flash LIDAR) and processors

• More sensor types, better signal processing and advances in sensor fusion

• Cognitive robotics can tackle unstructured situations without prior programming

• Shifting to Cloud Computing frees up processor, minimizes size, power and weight

• New manipulators and soft materials offer greater versatility

• Micro-robots collectively building macro-scale objects

• Ubiquitous comms allow robust realtime cooperation

• Emergent collaborative behaviors from swarms of robots

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Retail / Supply Chain Kiva Systems autonomous robots deliver

inventory to workers instead of the reverse

Acquired by Amazon for $775M in 2012

Agriculture New startups include 3D Robotics, Harvest

Automation, Blue River Technologies

Agriculture to be $16B market by 2020

Transportation Autonomous vehicles will deliver powerful benefits for safety, efficiency, and to the

environment

Industrial / Manufacturing Adaptive morphologies (like this snake bot)

allow automation of workflow that previously required human attention

Intelligent Systems Address Needs in Unstructured Environments Traditional and New Markets

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Traditional Automation vs. Intelligent Systems

Traditional automation has been responsible for great improvements in manufacturing but it has stark limitations that curtail its addressable markets.

Automation is … but also Intelligent Systems are

• fast• precise• predictable• able to do one task, or set

of tasks, extremely well• good at tasks that are

“dull, dirty, or dangerous” … as long as they take place in structured environments

• immobile• largely unaware of its

environments• unable to easily react to

changes in its environment

• not functionally versatile• unable to work near

humans• largely unable to

collaborate with humans

• often mobile• functionally versatile • able to learn • able to work safely with

humans• able to communicate and

cooperate with each other• able to adapt to changing

physical environments• able to adapt to changing

business environments

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New Applications and Markets• Energy

• Improved sensing• Inspect/survey• production automation

• Healthcare• surgical and logistics• pharmacy• rehabilitative• devices and diagnostics

• Logistics• assistive exoskeletons• palletize/depalletize, pick/pack• delivery

• Agriculture • data collection• watering / pruning / weeding • pest reduction

• Construction• assistive exoskeletons• layout marking• precision fabrication• contour crafting

• Facilities maintenance• inventory• cleaning• security

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Favorable Macro Trends: Rising Labor Costs, Falling Robot Unit Costs

• Favorable demographics• Aging populations mean

fewer workers• Rising incomes mean remaining

workers less willing to do dull, dangerous, dirty work — and demand more for doing it

• Robotics: increasing functionality, decreasing cost • Robotic componentry riding

favorable cost curves• Software enabling greater

capability• Short-lifecycle products require production lines that deliver high quality, accuracy,

consistency but are also highly adaptable

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Favorable Macro Trends: Large Players From Outside Robotics Making First Moves

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Private Investing in Robotics: Opportunities for Advanced Robotics and Intelligent Systems

Randy CastlemanManaging PartnerStrategic Robotics Fundrcastleman@strategicroboticsfund.com