Better technology and the need to pay higher wages to humans have resulted in increased sales of robots to large corporations across America. But few of those automations turn into smaller factories, which are wary of high upfront costs and lack robotic engineering talent.
Venture capitalists are therefore supporting a new financial model: renting robots, installing and maintaining them, billing factories by the hour or month, reducing risks and up-front costs.
Saman Farid, a former venture capitalist who has invested in robots for over a decade and has seen the challenges of installing robots in factories, created Formic Technologies Rent-a-robot with support from Lux Capital and Initialized Capital, one of the first investors in self-driving. tech startup Cruise.
Initiated Capital partner Garry Tan sees a confluence of cheaper and better computer vision and artificial intelligence technologies, low interest rates and the threat of US-China tensions in supply chains fueling interest in bot subscriptions.
“It’s at the center of three of the biggest megatrends that drive all of society today,” Tan said.
Techs and small business owners don’t always understand each other, a dilemma that led an industry group, the Association for Manufacturing Technology, to set up an office in San Francisco a few years ago to bring the two together.
The rental model places a large part of the financial burden on robot startups that carry the risk of a manufacturer losing a contract or modifying a product. Small factories often have small runs of more suitable products that are not worth a robot. And Silicon Valley Robotics, an industry group supporting robot startups, says funding has been a challenge in the past.
Still, some top investors are on board.
Tiger Global, the biggest funder of tech startups this year, has supported three robot companies offering a seven-month subscription.
Melvin the robot
Bob Albert, whose family owns Polar Hardware Manufacturing, a 105-year-old metal stamping plant in Chicago, bought the Formic land to pay less than $ 10 an hour for a robot, compared to more than $ 20 in the hour for its average human worker. This month he saw a robot arm pick up a metal bar from a trash can, spin it, and place it in an older machine that folded it into a 42-inch doorknob.
“If the robot works really well, we’ll use it a lot,” said Albert, pleased with the early results. “And if that doesn’t work, neither of us is doing very well. We have less skin in the game and they have a little skin in the game.
Westec Plastics Corp, a family-owned plastic molding plant in Livermore, Calif., Got its first robot in January 2020 and now has three – named Melvin, Nancy and Kim – from Rapid Robotics which charges $ 3,750 per month per robot. the first year and $ 2,100 from the second year.
“Melvin is running around the clock, all three shifts, and that has replaced three full operators,” President Tammy Barras said, adding that she saves about $ 60,000 in labor costs per year with just one. robot. “We had to increase our salaries quite significantly this year because of what’s going on in the world. And luckily, Melvin didn’t increase his rate of pay. He’s not asking for a raise.
Barras, who has 102 employees, says robots cannot replace humans today because they can only perform simple, repetitive tasks, like picking up a round plastic cylinder and putting the company logo on it. good side.
Jordan Kretchmer, co-founder and CEO of Rapid Robotics, said he encountered some skepticism. “A lot of times we have walked in and there is a graveyard of robots that they bought in the past,” he said. But he added that “robots can be easy and they work when they’re in the hands of the right people.”