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Leading robotics VCs talk about where theyre investing

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The Valley’s affinity for robotics shows no signs of cooling. Technical enhancements through innovations like AI/ML, compute power and big data utilization continue to drive new performance milestones, efficiencies and use cases.

Despite the old saying, “hardware is hard,” investment in the robotics space continues to expand. Money is pouring in across robotics’ billion-dollar sub verticals, including industrial and labor automation, drone delivery, machine vision and a wide range of others.

According to data from Pitchbook and Crunchbase, 2018 saw new highs for the number of venture deals and total invested capital in the space, with roughly $5 billion in investment coming from nearly 400 deals. With robotics well on its way to again set new investment peaks in 2019, we asked 13 leading VCs who work at firms spanning early to growth stages to share what’s exciting them most and where they see opportunity in the sector:

Participants discuss the compelling business models for robotics startups (such as “Robots as a Service”), current valuations, growth tactics and key robotics KPIs, while also diving into key trends in industrial automation, human replacement, transportation, climate change, and the evolving regulatory environment.

Shahin Farshchi, Lux Capital

Which trends are you most excited in robotics from an investing perspective?

The opportunity to unlock human superpowers:

  • Increase productivity to enhance creativity leading to new products and businesses.
  • Automating dangerous tasks and eliminating undesirable, dangerous jobs in mining, manufacturing, and shipping/logistics.
  • Making the most deadly mode of transport: driving, 100% safe.

How much time are you spending on robotics right now? Is the market under-heated, overheated, or just right?

  • Three-quarters of the new opportunities I look at involve some sort of automation.
  • The market for robot startups attempting direct human labor replacement, floor-sweeping, and dumb-waiter robots, and robotic lawnmowers and vacuums is OVER heated (too many startups).
  • The market for robot startups that assist human workers, increase human productivity, and automate undesirable human tasks is UNDER heated (not enough startups).

Are there startups that you wish you would see in the industry but don’t? Plus any other thoughts you want to share with TechCrunch readers.

I want to see more founders that are building robotics startups that:

  • Solve LATENT pain points in specific, well-understood industries (vs. building a cool robot that can do cool things).
  • Focus on increasing HUMAN productivity (vs. trying to replace humans).
  • Are solving for building interesting BUSINESSES (vs. emphasizing cool robots).

Kelly Chen, DCVC

Three years ago, the most compelling companies to us in the industrial space were in software. We now spend significantly more time in verticalized AI and hardware. Robotic companies we find most exciting today are addressing key driver areas of (1) high labor turnover and shortage and (2) new research around generalization on the software side. For many years, we have seen some pretty impressive science projects out of labs, but once you take these into the real world, they fail. In these changing environmental conditions, it’s crucial that robots work effectively in-the-wild at speeds and economics that make sense. This is an extremely difficult combination of problems, and we’re now finally seeing it happen. A few verticals we believe will experience a significant overhaul in the next 5 years include logistics, waste, micro-fulfillment, and construction.

With this shift in robotic capability, we’re also seeing a shift in customer sentiment. Companies who are used to buying outright machines are now more willing to explore RaaS (Robot as a Service) models for compelling robotic solutions – and that repeat revenue model has opened the door for some formerly enterprise software-only investors. On the other hand, companies exploring robotics in place of tasks with high labor shortages, such as trucking or agriculture, are more willing to explore per hour or per unit pick models.

Adoption won’t be overnight, but in the medium term, we are very enthusiastic about the ways robotics will transform industries. We do believe investing in this space requires the right technical know-how and network to evaluate and support companies, so momentum investors looking to dip their hand into a hot space may be disappointed.

Rob Coneybeer, Shasta Ventures

We’re entering the early stages of the golden age of robotics. Robotics is already a huge, multibillion-dollar market – but today that market is dominated by industrial robotics, such as welding and assembly robots found on automotive assembly lines around the world. These robots repeat basic tasks, over and over, and are usually separated by caged walls from humans for safety. However, this is rapidly changing. Advances in perception, driven by deep learning, machine vision and inexpensive, high-performance cameras allow robots to safely navigate the real world, escape the manufacturing cages, and closely interact with humans.

I think the biggest opportunities in robotics are those which attack enormous markets where it’s difficult to hire and retain labor. One great example is long-haul trucking. Highway driving represents one of the easiest problems for autonomous vehicles, since the lanes tend to be well-marked, the roads have gentle curves, and all traffic runs in the same direction. In the United States alone, long haul trucking is a multi-hundred billion dollar market every year. The customer set is remarkably scalable with standard trailer sizes and requirements for shipping freight. Yet at the same time, trucking companies have trouble hiring and retaining drivers. It’s the perfect recipe for robotic opportunity.

I’m intrigued by agricultural robots. I’ve seen dozens of companies attacking every part of the farming equation – from field clearing and preparation, to seeding, to weeding, applying fertilizer, and eventually harvesting. I think there’s a lot of value to be “harvested” here by robots, especially since seasonal field labor is becoming harder to find and increasingly expensive. One enormous challenge in this market, however, is that growing seasons mean that the robotic machinery has a lot of downtime and the cost of equipment isn’t as easily amortized in other markets with higher utilization. The other big challenge is that fields are very, very tough on hardware and electronics due to environmental conditions like rain, dust and mud.

There are a ton of important problems to be solved in robotics. The biggest open challenges in my mind are locomotion and grasping. Specifically, I think that for in-building applications, robots need to be able to do all the thing which humans can do – specifically opening and closing doors, climbing stairs, and picking items off of shelves and putting them down gently. Plenty of startups have tackled subsets of these problems, but to date no one has built a generalized solution. To be fair, to get to parity with humans on generalized locomotion and grasping, it’s probably going to take another several decades.

Overall, I feel like the funding environment for robotics is about right, with a handful of overfunded areas (like autonomous passenger vehicles). I think that the most overlooked near-term opportunity in robotics is teleoperation. Specifically, pairing fully automated robotic operations with occasional human remote operation of individual robots. Starship Technologies is a perfect example of this. Starship is actively deploying local delivery robots around the world today. Their first major deployment is at George Mason University in Virginia. They have nearly 50 active robots delivering food around the campus. They’re autonomous most of the time, but when they encounter a problem or obstacle they can’t solve, a human operator in a teleoperation center manually controls the robot remotely. At the same time. Starship tracks and prioritizes these problems for engineers to solve, and slowly incrementally reduces the number of problems the robots can’t solve on their own. I think people view robotics as a “zero or one” solution when in fact there’s a world where humans and robots work together for a long time.

Read more: https://techcrunch.com/2019/11/26/leading-robotics-vcs-talk-about-where-theyre-investing/

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Karmas new electric hinge-winged hypercar concept goes 0 to 60 mph in 1.9 seconds

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Karma Automotive took the wraps off Tuesday of a new electric concept car called the SC2 that produces a heart-thumping 1,100 horsepower and can travel from 0 to 60 miles per hour in 1.9 seconds.

The concept is a showpiece and an integral part of the Chinese-backed California-based startup’s new strategy to become a technology and design incubator that supplies other automakers.

Karma Automotive also unveiled Tuesday at Automobility LA, the press and trade days of the LA Auto Show, a performance variant of its Revero GT. The new Revero GTS is similar to the Revero GT, but boasts more performance and several other new interior and tech touches.

Meanwhile, the SC2 — with its eye-popping looks and performance specs — is meant to be show what Karma can do, not necessarily what it will do.

Karma CEO Lance Zhou called the SC2 a “signpost” to the company’s future as a technology-driven brand. It also previews the company’s future design language.

“Our open platform serves as a test bed for new technologies and partnerships, where we are to provide engineering, design, technology and customization resources others,” Zhao said.

The nuts and bolts

The battery-electric concept has front and rear mounted twin electric motors that deliver 800 kW peak power, with 10,500 pound-feet wheel torque and 350 miles of pure electric range. The I-shaped 120 kilowatt-hour battery is housed in the center tunnel beneath the dashboard and seats.

The vehicle has carbon ceramic breaks, a push-rod operated racing suspension and a Karma torque vectoring gearbox.

The hinge-winged doors aren’t the only flashy or tech-forward features. The concept has long-range radars, cameras, and FMCW lidar sensors in a nod towards an autonomous driving future.

Karma

Drivers will theoretically (this is a concept after all) enter the vehicle through fingerprint and facial recognition sensors. Inside the vehicle, there are biometric seats and 3D audio to create individual sound zones for driver and passenger. Electro chromatic glass shifts from clear to opaque for privacy and light sensitivity.

Reliving the drive

Karma also showed a feature that lets drivers re-live their street-racing adventures through a simulation. A triple high definition camera under the windshield and frequency-modulated
continuous wave lidar sensors capture of the car in motion. At the same time, software captures in real-time all of the turns, braking and acceleration of driving.

After the drive, an adaptive laser projector replays the journey while the vehicle is parked. A mounted smartphone acts as the cabin’s rear-view mirror and turns it into a driving simulator where the user can re-experience their drive and fine-tune their skills.

And of course, drivers can then share that experience with others or stream drivers’ routes from
around the world within their own vehicles.

SC2’s technology can be integrated into a variety of future vehicles, according to Andreas Thurner, Karma’s vp of global design and architecture.

And that’s the whole point of this exercise. It’s unlikely that the SC2 will ever be made as a production vehicle. But the tech and design features in it could live on.

Karma Automotive’s roots began with Fisker Automotive, the startup led by Henrik Fisker that ended in bankruptcy in 2013. China’s Wanxiang Group purchased what was left of Fisker in 2014 and Karma Automotive was born.

Karma hasn’t had the smoothest of resurrections. The company’s first effort, known as the Revero, wasn’t received warmly. The Revero GT has been an improved effort. However, that hasn’t relieved the pressure.

The company laid off about 200 workers this month from its Irvine, Calif. headquarters following a restructuring that will focus on licensing its technology to other carmakers. The company’s assembly plant is in Moreno Valley, Calif.

This new incubator effort is an effort to bring some stability to the company and help it offset the capitally intensive business of designing and producing its own cars.

Read more: https://techcrunch.com/2019/11/19/karmas-new-electric-hinge-winged-hypercar-concept-goes-0-to-60-mph-in-1-9-seconds/

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The Station: Canoo hits the road, Coup shutters and Samsung shifts

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Welcome back to The Station, the go-to newsletter for keeping up to date on what the heck is going on in the world of transportation. I’m your host, Kirsten Korosec, senior transportation reporter at TechCrunch.

Portions of the newsletter are published as an article on the main site after it has been emailed to subscribers (that’s what you’re reading now). The Station is emailed every Saturday morning. To get everything, you have to sign up. And it’s free. To subscribe, go to our newsletters page and click on The Station.

We love tips and feedback. Please reach out anytime and tell us what you love and don’t love so much. Email me at kirsten.korosec@techcrunch.com to share thoughts, opinions or tips or send a direct message to @kirstenkorosec.

Micromobbin’

the

Shared mopeds might be popular, but that doesn’t mean companies operating these services are guaranteed to succeed. This week, TechCrunch reporter Romain Dillet reported that Coup, a wholly owned subsidiary of Bosch that operates an electric moped scooter-sharing service in Berlin, Paris and Madrid, is shutting down.

The closure might surprise some, considering Coup has brand recognition and, according to the company, a loyal customer base that uses its services. That’s not enough to be a profitable enterprise. Coup said that operating the service is “economically unsustainable” in the long term.

Meanwhile, TechCrunch reporter Manish Singh learned from two sources familiar with the deal that Bangalore-based startup Bounce has raised about $150 million as part of an ongoing financing round led by existing investors Eduardo Saverin’s B Capital and Accel Partners India. Bounce, formerly known as Metro Bikes, operates more than 17,000 electric and gasoline scooters in three dozen cities in India.

The new round values the startup “well over $500 million,” the people said, requesting anonymity. This is a significant increase since the year-old startup’s Series C financing round, which closed in June, when it was worth a little more than $200 million.

Bounce, which is known for its cheap rental costs, along with competitors Vugo and Yulu, is trying to carve market share away from ride-hailing companies like Uber . The big attraction isn’t necessarily price, either. Traffic congestion is prompting people to turn to two wheels, giving Bounce and others a boost.

Subscriptions are so hot right now

the

Remember Canoo, the Los Angeles startup that revealed a minibus-type electric vehicle a few months back? We have an update. In short, the company’s rapid ramp continues to accelerate despite some legal headwinds.

Canoo is taking an interesting approach to EVs. It aims to offer a “subscription only” electric vehicle in the U.S. and China.

The company began life as Evelozcity in late 2017 after ex-BMW executives Stefan Krause and Ulrich Kranz left Faraday Future amid an internal power struggle. Evelozcity rebranded as Canoo in spring 2019 and unveiled its prototype electric vehicle several months later.

Now, the company is beta testing its EV on public roads. Canoo tells me that its focus is to validate the powertrain, steer-by-wire system, battery, chassis and body structure.

Canoo is building a fleet of more than 30 beta vehicles for various types of testing. The bulk of the beta testing is expected to take place over the next six months in various locations, including near Canoo’s Torrance, Calif. headquarters, Toyota’s Arizona proving grounds and on public roads in Ohio.

Canoo said it’s also conducting hot and cold testing, as well as focusing on the advanced driver assistance system in various locations.

Canoo

A subscription reboot

Automakers including Audi, Porsche and Volkswagen have been testing subscription programs with mixed success. Now, one failed pilot is coming back.

At an event in Los Angeles, GM’s Chief Marketing Officer Deborah Wahl said the subscription service Book by Cadillac will return next year. GM’s luxury brand Cadillac will pilot the next-generation of the subscription service in San Francisco starting in the first quarter of 2020.

“We learned a lot from the first pilot… first, it verified that there is no longer a one-size-fits-all solution to personal transportation,” Wahl said at the event. “Second, we learned that the BOOK model is enormously effective as a conquest mechanism: 70% of BOOK subscribers were new to Cadillac.”

Moving forward, Cadillac plans to integrate the subscription service into the retail dealer network, Wahl said.

A little bird

blinky

We hear a lot. But we’re not selfish. Let’s share.

Samsung appears to be yet another company stepping back from a pursuit of full autonomy and refocusing efforts and investments toward advanced driver assistance technology. At least for now.

Several years ago, Samsung was all in on autonomous vehicle technology. At CES in 2018, the company introduced its new Samsung DRVLINE platform — an “open, modular, and scalable hardware and software-based platform” for the autonomous driving market. But Samsung is changing up its strategy.

The DRVLINE/Smart Machines team based out of its Samsung Strategy and Innovation Center has been shuttered, a source with direct knowledge of the events told me. This move also includes closing offices in Germany.

Let’s get wonky

the

The U.S. Federal Communications Commission is keen to change how the 5.9 GHz band is used, and that matters for connected car technology and the eventual deployment of autonomous vehicles.

For the unfamiliar, the 5.9 GHz band has been reserved for the past two decades to be used by the Dedicated Short Range Communications, a service in the Intelligent Transportation System that was designed to enable vehicle communication. (ITS is a joint operation that overlaps five offices under the Department of Transportation.)

In the FCC’s view, the DSRC service has evolved slowly and has not been widely deployed. The commission issued this month a Notice of Proposed Rulemaking to take, what it calls “a fresh and comprehensive look” at the 5.9 GHz band rules and propose changes to how the spectrum is used.

The upshot: The FCC wants to carve up the band. The commission proposed dedicating the upper 30 megahertz of the 5.9 GHz band to meet current and future needs for transportation and vehicle safety-related communications, while repurposing the lower 45 megahertz of the band for unlicensed operations, like Wi-Fi.

Perhaps the most interesting piece of this proposed change is the FCC’s views on DSRC and what sounds like a strong endorsement for Cellular Vehicle to Everything (C-V2X). The FCC wants to revise the rules and give C-V2X the upper 20 megahertz of the band reserved for vehicle communications. The commission plans to seek comment on whether this segment of the spectrum should be reserved for DSRC or C-V2X systems.

C-V2X, which the 5G Automotive Association supports, would use standard cellular protocols to provide direct communications between vehicles, as well as infrastructure like traffic signals. But here’s the thing: C-V2X is incompatible with DSRC-based operations.

It’s pretty clear which way the FCC is leaning. In a speech November 20, FCC Chairman Ajit Pai said he believes the government “should encourage the expansion and evolution of this new vehicle-safety technology.” Pai insists that the FCC is not “closing the door” on DSRC, but instead allowing for both.

“So moving forward, let’s resist the notion that we have to choose between automotive safety and Wi-Fi,” Pai said in his speech. “My proposal would do far more for both automotive safety and Wi-Fi than the status quo.”

Read more: https://techcrunch.com/2019/12/02/the-station-canoo-hits-the-road-coup-shutters-and-samsung-shifts/

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Recycling robots raise millions from top venture firms to rescue an industry in turmoil

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The problem of how to find the potential treasure trove hidden in millions of pounds of trash is getting a high-tech answer as investors funnel $16 million into the recycling robots built by Denver-based AMP Robotics.

For recyclers, the commercialization of robots tackling industry problems couldn’t come at a better time. Their once-stable business has been turned on its head by trade wars and low unemployment.

Recycling businesses used to be able to rely on China to buy up any waste stream (no matter the quality of the material). However, about two years ago, China decided it would no longer serve as the world’s garbage dump and put strict standards in place for the kinds of raw materials it would be willing to receive from other countries. The result has been higher costs at recycling facilities, which actually are now required to sort their garbage more effectively.

At the same time, low unemployment rates are putting the squeeze on labor availability at facilities where humans are basically required to hand-sort garbage into recyclable materials and trash.

Given the economic reality, recyclers are turning to AMP’s technology — a combination of computer vision, machine learning and robotic automation to improve efficiencies at their facilities.

trash

Photo courtesy of Flickr/Abulla Al Muhairi

That’s what attracted Sequoia Capital to lead the company’s latest investment round — a $16 million Series A investment the company will use to expand its manufacturing capacity and boost growth as it looks to expand into international markets.

“We are excited to partner with AMP because their technology is changing the economics of the recycling
industry,” said Shaun Maguire, partner at Sequoia, in a statement. “Over the last few years, the industry has had their margins squeezed by labor shortages and low commodity prices. The end result is an industry proactively searching for cost-saving alternatives and added opportunities to increase revenue by capturing more high-value recyclables, and AMP is emerging as the leading solution.”

The funding will be used to “broaden the scope of what we’re going after,” says chief executive Matanya Horowitz. Beyond reducing sorting costs and improving the quality of the materials that recycling facilities can ship to buyers, the company’s computer vision technologies can actually help identify branded packaging and be used by companies to improve their own product life cycle management.

“We can identify… whether it’s a Coke or Pepsi can or a Starbucks cup,” says Horowitz. “So that people can help design their product for circularity… we’re building out our reporting capabilities and that, to them, is something that is of high interest.”

That combination of robotics, computer vision and machine learning has potential applications beyond the recycling industry as well, according to Horowitz. Automotive scrap and construction waste are other areas where the company has seen interest for its combination of software and hardware.

Meanwhile, the core business of recycling is picking up. In October, the company completed the installation of 14 robots at Single Stream Recyclers in Florida. It’s the largest single deployment of robots in the recycling industry and the robots, which can sort and pick twice as fast as people with higher degrees of accuracy, are installed at sorting lines for plastics, cartons, fiber and metals, the company said.

AMP’s business has two separate revenue streams — a robotics as a service offering and a direct sales option — and the company has made other installations at sites in California, Colorado, Indiana, Minnesota, New York, Pennsylvania, Texas, Virginia and Wisconsin.

The traction the company is seeing in its core business was validating for early investors like BV, Closed Loop Partners, Congruent Ventures and Sidewalk Infrastructure Partners, the Alphabet subsidiary’s new spin-out that invests in technologies to support new infrastructure projects.

For Mike DeLucia, the Sidewalk Infrastructure Partners principal who led the company’s investment into AMP Robotics, the deal is indicative of where his firm will look to commit capital going forward.

“It’s a technology that enables physical assets to operate more efficiently,” he says. “Our goal is to find the technologies that enable really exciting infrastructure projects, back them and work with them to deliver projects in the physical world.”

Investors like DeLucia and Abe Yokell, from the investment firm Congruent Ventures, think that recycling is just the beginning. Applications abound for AMP Robotic’s machine learning and computer vision technologies in areas far beyond the recycling center.

“When you think about how technology is able to impact the built environment, one area is machine vision,” says Yokell. “[Machine learning] neural nets can apply to real-world environments, and that stuff has gotten cheaper and easier to deploy.”

Read more: https://techcrunch.com/2019/11/14/recycling-robots-raise-millions-from-top-venture-firms-to-rescue-an-industry-in-turmoil/

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