🌐 The Industrial Transition, August 2024
Hi all, and welcome to the 80+ people who signed up for the REALTECH Conference.👋
If you’re reading this you’re either doing so from your vacation or you’re one of the hardcore pushing through the summer lull. Regardless, it’s a packed edition with more large funding rounds in robotics, a notable computer vision model release from Meta and a brief on how physical infrastructure has become a key target for nation-state cyber attacks. So grab a drink, sit down and enjoy.
📢 PSAs
REALTECH Conference - Rebuilding our critical industries
We are hosting the fifth edition of the REALTECH Conference on September 20th in London. We have an awesome line-up of speakers including Matt Clifford, Taavet Hinrikus, James Wise, Jenny Read, Freya Pratty and 10+ others - Full speaker list here
This last week, we have added several new speakers, including Joe Griston (CEO of Generative Engineering and ex-CPO at Arrival), Aaron Neale (ex-CPO at Improbable) and Florian Doumenc (CEO of Trout Software). With more to be announced in the coming weeks 👀
We have most of the tickets allocated so far, apply here if you’d like to join.
🍹This newsletter will be adjourning for August. Unfortunately, I won’t be sipping cocktails on the beach but will put the finishing touches on the REALTECH Conference program.
🦾 Manufacturing and Robotics
Humanoids in action - logistics provider GXO has signed a multi-year agreement with Agility Robotics, for the use of their Digit humanoid inside their facility. The robot picks up totes from 6 River Systems‘ Chuck autonomous mobile robots (AMRs) and places the totes onto conveyors. Notably, Agility is providing the humanoids under a Robotics-as-a-service (RaaS) contract with GXO paying for robots at $30/hr fully loaded (installation+on-going support and maintenance), which equates to around $60k - $75k per annum (assuming normal working hours). This is an order of magnitude more expensive than a simple, specialised conveyor system.
A few things: 1) The purported advantage of a humanoid, is to have an on-demand workforce, capable of a multitude of tasks versus a fixed, high throughput robotic cell 2) RaaS enables customers to spend Opex (instead of Capex), lowering the upfront investment and risk needed to deploy robots. Either way, the current economics do not make sense for an isolated task, there is an element of innovation theatre at play here.
The humanoid naysayers will say “Use a specialised robotic cell, optimised to complete that task”. However, note that the deployment humanoids' in commercial settings can be counted on one hand. This deployment, whilst not economically sound, is a stepping stone to increased humanoid utility. There are two ways to drive customer ROI here; decreasing the BOM costs and/or increasing capabilities and throughout. With the latter being the humanoids’ key competitive differentiation and path to winning.
Meta’s Segment Anything Model 2 (SAM2). Meta has released a comprehensive update to their Segment Anything Model, a leading image and object segmentation model. The new model, SAM2, will have a sizeable impact on computer vision and robotics, due to some notable capabilities such as:
Tracking and memory attention mechanism: the model uses a transformer with memory across frames. Special "object pointer" tokens are stored in a "memory bank" FIFO queue of recent and prompted frames. This allows advanced tracking of objects across scenes and easily deals with occlusions. This is a similar capability to CUTIE which was presented at this year’s CVPR
Unified Video and Image capabilities: SAM’s Image segmentation capabilities have been extended to real-time video. SAM2 uses a streaming memory architecture that processes video frames one at a time, allowing for real-time, interactive applications
Edge capabilities and segmentation of unfamiliar videos: The model is capable of zero-shot generalization. This means it can segment objects, images, and videos from domains not seen during training, allowing for versatility in real-world, edge use cases
The model is likely to have big implications for robotics and embodied AI - as real-time and edge capabilities mean vastly improved object tracking, scene understanding, and interaction with dynamic environments. For example, this could enable on-edge navigation for drones operating in offline or GPS-denied environments. Meta has open-sourced SAM2 under Apache 2.0 and its accompanying SA-V dataset of 50k videos.
🇬🇧 UK Robotics research, heaven and hell - a tumultuous month for UK robotics research as Imperial College’s Dyson Robotics Lab was disbanded. The announcement came via the Labs’ PI Stephen James on Twitter. The lab was initiated two years ago by consumer hardware entrepreneur James Dyson, who previously donated £5m to Imperial.
In more positive news, Jenny Read from the Advanced Research and Invention Agency (ARIA) announced their Robot Dexterity programme which ‘aims to transform robotic capabilities and unlock a step change in human productivity’. The program is backed by £57m and is focused on massively improving robotic dexterity by funding research - which encompasses challenges in hardware, control and coupling sensors and computation at the edge. It is one of a multitude of programmes launched so far by the UK’s new research agency. Jenny will also be moderating a panel at this year’s REALTECH Conference.
🤖 Ex-Tesla Optimus head launches startup, and the prevalence of early-stage robotics mega rounds - Myrta is a warehouse automation company started in 2022 by Chris Walti, the ex-head of Tesla’s Optimus robotics division. Myrta is pioneering a solution for warehouse automation, using a matrix structure to lift pallets of up to 1,300kg in three dimensions. Myrta just came out of stealth announcing $78m of total funding, encapsulating both Series A and B funding rounds.
We’ve observed a huge increase in the number of sizeable funding rounds in robotics and AI, in advance of meaningful product-market fit (PMF). Rounds such as Skild AI’s $300m Series A, Physical Intelligence’s $70m seed round and ex-Cruise CEO, Kyle Vogt’s, Bot Company raking in $150m at day zero.
A few things are at play here, namely the combination of excess capital in early-stage VC colliding with a limited set of qualified founders using transformers and end-to-end learning to build ‘foundational models’ for robotics. The promise is generalisable robotics which will automate and disrupt the manual labour market. AI’s ‘Cambrian explosion’ has accelerated intelligence capabilities. However, it will not improve the complexities of implementing real-world technologies within high-criticality operational domains such as factories, warehouses and the home.
The historical evidence for the success of startups that raised large-scale funding rounds pre-PMF is limited and rare. A common refrain is that capital needs to be unlocked in lockstep with technological and commercial progress, creating healthy constraints along the way (“necessity is the mother of all invention”). Some will succeed, and no doubt this will be a net positive for robotics talent and technology. However, expect a large-scale evisceration of early-stage capital chasing too few commercial opportunities within the next 2-4 years. This harkens to similar overfunding dynamics we’re seeing in broader AI infrastructure funding, which Sequoia recently dubbed the “AIs $600bn [revenue] question”.
🌐Tech Geopolitics
❄️ Cold war, heats up with increasing nation-state cyber attacks on critical infrastructure - the number of attacks by China and Russia on Western infrastructure is increasing by 50% per annum. We previously reported on China’s attack on US utilities in 2023, similarly last month Kansas had its water supply hacked. The US’ General Timothy Haugh, the head of U.S. Cyber Command and the NSA recently reported large-scale cyber attacks on the 160,000 US companies which service the US military apparatus. These attacks show no signs of stopping. We’ve seen notable attacks in Europe also, such as on German defence manufacturer Rheinmetall in May. This has prompted in the last few weeks, NATO countries to agree upon a centralised cyber defence centre to be located in Belgium.
The attack surface for industrial companies has been widening, ss many are transitioning from on-prem to cloud, and connecting disparate IT and OT networks. The increase in connectivity are creating hard to secure vulnerabilities in physical infrastructure. As we saw in Ukraine, with cyber-attacks from Russia starting as early as 2014, the cyber domain can be an early-warning system for escalating tensions between factions.
🇩🇪 Write up on SPRIND, Germany’s DARPA equivalent - there’s a new-ish federal technology research agency in town. SPRIND was established in 2019 to support and promote groundbreaking innovations in Germany, minus the bureaucracy. The agency is looking to support radical technological innovation within a few key missions - touching on compute, climate and biology. Science Business has a behind-the-scenes look at the agency here.
SandboxQA release - drone navigation in GPS-denied environments is becoming a favourite topic of this newsletter, as defence forces increasingly become increasingly reliant on drones. Sandbox, have released AQNav, a navigation system that relies on AI, quantum sensors and the Earth’s magnetic field to navigate aircraft through GPS-denied environments. The magnetic navigation system, dubbed Assured Positioning Navigation and Timing (APNT) has use cases in defence and commercial aviation.
🌍 Climate Tech
Europe’s first clearing house for Sustainable Aviation Fuel (SAF) - Engineering firm Ricardo has been selected by the European Union Aviation Safety Agency (EASA) to lead a consortium to establish Europe’s first SAF Clearing House. This initiative aims to facilitate the scaling up of SAF production and deployment by creating a network of European and international testing facilities and providing guidance to fuel producers on meeting environmental and eligibility criteria. The SAF market has been plagued by a multitude of issues including shoddy unit economics driving a multitude of recent plant closures (Oceana Biofuels, Fulcrum BioEnergy, Shell among others) and a lack of consistency around fuel pathways and feedstocks, leading to a disjointed and unfocused market. In 2023, the EU mandated the ReFuelEU Aviation Regulation, which mandates increasing SAF production targets to 70% by 2050.
HSBC’s new climate-infrastructure financing unit - a favourite topic of this newsletter is First-of-a-Kind financing deals in climate. Complex, novel, risky and crucial to the transition - these deal structures are often the bane of scaling climate founders due to a lack of institutional investor depth and sophistication. HSBC has just announced a new climate-infrastructure unit focused on providing debt project financing solutions to projects, headed by former UK government minister Danny Alexander. It’s predicted that over $6tr is needed to finance the transition up to 2030, a clear commercial opportunity for large-scale financial institutions to capture.
💰Notable Funding Rounds
Waymo ($5bn) is an autonomous ride-sharing company, that is fully owned by Google parent company Alphabet, whi are providing an additional $5bn “over several years“
Helsing (€450m Series C) the European defence AI company raised from General Catalyst, with participation from Elad Gil, Accel, Saab, Lightspeed, Plural and Greenoaks
Applied Intuition ($300m secondary) the vehicle ADAS and simulation company held a secondary sale of shares at their Series E round valuation of $6bn
Altana ($200m Series C) is a supply chain management company, Thomas Tull’s US Innovative Technology Fund (USIT) led the round
Monarch Tractor ($133m Series C) the smart electric tractor producer raised from Astanor
Addionics ($39m Series B) is a UK-based manufacturer of cathode and anode current collectors for batteries, GM Ventures led the round
Standard Bots ($39m Series B) is a fully integrated hardware and software pick and place robotics company, the funding was led by General Catalyst
Libattion (€14m Series A) is a Swiss stationary energy storage company that use upcycled battery materials raised from A&G Energy Transition Tech Fund
Axle Energy ($9m seed) is an API for distributed energy assets, Accel led the round
Sojo Industries ($10m Series A) use robotics to lower costs and track products in food and beverage manufacturing, the round was led by Schreiber Ventures
Again ($43m Series A) uses CO2 to biomanufacture carbon-negative chemicals, the round was led by Google Ventures and HV Capital
Phaidra ($12m Series A) uses AI to optimise energy-intensive industrial operations such as data centre usage, Index Ventures led the round
Mantle ($20m Series C) is a metal 3D printing company, Schooner Ventures led the round
Cartken ($10m Series A) is an autonomous delivery robot with applications in last mile and factory logistics, the round was led by 468 Capital
Didero ($7m seed) is an AI-powered supplier management tool for procurement teams, the round was led by First Round Capital
Jacobi Robotics ($5m seed) is a software development platform for robotic motion planning, the round was led by Moxxie Ventures
Briefly Bio ($1.2m pre-seed) is building the Github for biology experiments, Compound led the round