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As we move through 2020, a number of technologies are bracing for continued turmoil and uncertainty in the wake of COVID-19. However, the robotics industry, despite facing its own challenges, received record investment in 2019. Last year, 397 investment and acquisition deals involving robotics and robot-related companies were completed — 320 investments and 77 acquisitions. The total yearly value of all private sector deals was a staggering US$46 billion.

If 2019 was a challenging year for robotics when it came to manufacturing and the global economy, the funding environment is the strongest it has ever been. In the midst of the COVID-19 pandemic, the robotics ecosystem is in a strong position to weather economic hardship and retains significant backing from outside investors.

A Closer Look at the Numbers

Of the $46 billion spend, a total of US$17.8 billion went to acquisitions and a further US$29 billion went into investments. The lion's share of investment funding focused on autonomous passenger vehicles (APV’s), surgical robotics, and warehouse automation, comprising 82% of total investments. The health sector is especially well-placed to benefit from private investment. 

The majority of the near $US18 billion in acquistion capital is located in the United States, and accelerating, with more companies seeing robotics as essential to securing long-term revenue growth and transitioning from mature industries with limited scope for the future. Infrared camera developer FLIR and electronic systems tester Teradyne are two companies following this trend.

The United States and China account for 89% of all investment value, in terms of companies located in their various tech clusters. California hosts 77 robotics vendors that were invested in, while the rest of the United States had 88 companies. Other countries with considerable investment included Canada, Israel, Japan, and the UK.

The funding environment for the drone industry is not as friendly as it once was, following a number of commercial failures (Airware) and the monopolization of consumer drones by DJI. That said, buoyed by interest in counter-drone technology and a healthy demand from defense and civil bodies, 2019 saw the drone and Unmanned Underwater Vehicle (UUV) industry close out with 15 investments totaling US$293 million and 8 acquisitions worth US$791 million.

The mobile robotics space, led by the autonomous passenger vehicle developers, reached an enormous US$12.4 billion in investment across 84 deals, more than any other subcategory. Mobile robot developers also saw US$1.1 billion in acquisition value with 10 deals. With the scaling up of robotics outside their traditional applications in discrete and process manufacturing, there is significant investment into companies enabling robotics through adjacent technologies like sensors, processors, software, and vision systems, as well as with vendors offering system integration and services for robotics. Adjacent technology companies saw US$3.6 billion in investment across 113 deals and US$8.5 billion in capital spent across 30 acquisitions.

Notable Companies

Despite not having commercialized their technology, autonomous passenger vehicle developers like Waymo, Cruise, Zoox and company have continued to amass enormous funding from the corporate and VC world. Surgical robots also received huge funding, and have already been commercialized to a considerable extent, with Intuitive Surgical selling over 5,000 Da Vinci robot systems to date. The localization of funds to a few specific sectors is down both to the anticipated effect of the technology and the relative market power of major auto manufacturers like Toyota, health companies like Johnson & Johnson, and Amazon.

There were a number of standout investors, including VC entities like the Founder’s Fund, Andreessen Horowitz, and GGV Capital. But standing out from all others, SoftBank and its vision fund has become synonymous with large-scale investments in the robotics space, and 2019 was no different, as the Japanese conglomerate invested in part of the US$1.15 billion round for Cruise, invested US$1 billion into Uber’s advanced technologies division, made a further US$940 million contribution to last-mile delivery robot maker Nuro, and provided US$300 million in funding to cloud robotics vendor CloudMinds. In early 2020, the company invested even further with US$ 263 million in logistics vendor Berkshire Grey and US$ 32 million in mobile service robot developer Bear Robotics.

Despite the scale of funding in 2019 growing considerably from the previous year, the impact of COVID-19 will likely mean it will be more challenging for many vendors to attract funding as investors wait to assess the likely scale of the economic downturn. Markets with an easy route commercialization, like surgical robots and warehouse automation, could benefit out of the crisis. At the same time, the autonomous passenger vehicle market could be adversely affected due to lack of business-readiness, though this has not prevented big investments in APV developers like Pony AI and Waymo in the first quarter. Prior to the pandemic’s massive impact became clear, 2020 was already shaping up to be a strong year for robotics investment, with autonomous forklift and tow tractor developers Seegrid and Vecna already receiving funding.

Looking Ahead

COVID-19 has upended the global economy and placed over a quarter of the world’s population under quarantine. Manufacturing and industrial production has plummeted in the world’s major economies, affecting the robotics industry profoundly. But while this catastrophic and disruptive event will hit many vulnerable startups and highly exposed companies in the robotics space, it will also provide huge opportunity to roboticists who can prove their solutions are valuable to public response and to dealing with the economic recovery. As the year progresses and a global recovery begins to unfold, these investments and acquisitions will continue to propel revenue and innovation for the robotics industry.

ABI Research's Industrial, Collaborative and Commercial robotic technologies service focuses on technologies that interact and augment human workforce in line with ongoing industrial transformation. Special focus is dedicated to innovation spanning the entire technology supply chain from discrete advances in mechatronics, sensors, processing, and robotic soft­ware to the long-term impact of strategic technologies like machine learning, machine vision, 5G, AR/VR, edge computing, and distributed computing. The service assesses key market transformations and maps spheres of influence within the value chain. It quantifies market opportunities of robotics and enabling technologies across various end-markets and use-cases.