Tag: EC Robotics

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Pitch Deck Teardown: ANYbotics’ $50M Series B deck

A couple of weeks ago, Brian wrote about ANYbotics’ $50 million Series B fundraise, which made me realize it’s been a hot minute since I’ve done a robotics teardown. That changes today, since ANYbotics was kind enough to share its pitch deck so we could take a closer look at the highs and lows of four-legged ‘bots.

Since the startup claims it has $150 million in preorders/reservations from gas, oil and chemical companies, and the fact that this is a growth round, I know this is going to be a traction-forward pitch. But there are many ways to weave that narrative. Let’s see how ANYbotics decided to carve that particular turkey.

We’re looking for more unique pitch decks to tear down, so if you want to submit your own, here’s how you can do that. 

Slides in this deck

ANYbotics sent through a lightly redacted deck that only blurs customer logos and financials. Here are the slides:

  1. Cover slide
  2. Mission slide
  3. Problem slide
  4. Why now slide
  5. State of the industry slide
  6. Company history slide
  7. Product slide
  8. Solution slide
  9. Value proposition slide
  10.   Traction slide [redacted]
  11.   Market size and market projections slide
  12.   Technology slide 1
  13.   Technology slide 2
  14.   Team slide
  15.   Competitive landscape
  16.   Go to market slide
  17.   Financials slide [redacted]
  18.   Testimonials slide [redacted]
  19.   Thank you slide

Three things to love

ANYbotics is a pretty cool company, and I’m always curious how any robotics company tells its story vis-a-vis the goliath in the room: Boston Dynamics is the name that usually springs to mind when it comes to four-legged robots. ANYbotics does a great job on some fronts, though.

Here are three things I loved about the pitch.

A logical evolution

[Slide 4] Nothing is inevitable, but this is a very compelling story. Image Credits: ANYbotics

Experienced robotics investors won’t truly need this slide, but ANYbotics is shrewd to include it. Investment decisions are rarely made in a vacuum, and in a VC firm, a broader partnership usually must be convinced of the viability of an investment. Slides like this can do a lot of the heavy lifting when it comes to telling the story.

This slide tells investors something they already know: Manufacturing robots have been around for a long time, warehousing robots are just finding their stride, and the market is ready for the next step of the evolution. Framing the story of robotics as a journey from structured tasks, towards structured environments and then towards structured problems was an elegant choice, and by outlining the history, the company is already hinting at the problem space and the benefits to customers. It’s a pretty subtle and masterful stroke of storytelling.

Startups should learn from this to contextualize their product in the market. Why are you doing what you do? What came before? How can you extrapolate existing markets and products to show how your company can be successful? Is there any way you can tell the story of your market like ANYbotics did here?

Showing the breadth of opportunities

[Slide 9] That’s a lot of use cases. Image Credits: ANYbotics

If this slide had shown up in an early-stage deck, I’d have lambasted the company for a complete lack of focus. But this isn’t a pre-product company hand-waving and saying, “Eh, there’s tons of opportunities, I guess.” This is a company raising $50 million to spur growth. Assuming ANYbotics has a solid go-to-market strategy for each of these value propositions, this slide communicates the utility of autonomous, all-purpose robots that can be used in a ton of situations where not employing a robot can be costly, pose safety risks, or both.

Also: Including the value propositions in the slide helps bring the size of the market to life and illustrate some of the growth opportunities.

I’d have loved to see a slide about the pipeline for selling to these customers to go with this one, but it’s possible that some of that information is on the redacted slides. But as a startup, if you’re saying pretty much everyone could be your customer, you’d best be prepared to back it up and explain how you’re going to reach “everyone.”

IT’S OVER NINE THOUSAND

Forgive the meme, but I wanted to share this heavily redacted slide and what I noticed:

[Slide 10] Expo-bloody-nential for the win. Image Credits: ANYbotics

As expected, ANYbotics raised this growth round based on beefy traction. Look at the monthly and total operating income graph on the top right: Over the course of its history, the company has seen fits and bursts of sales and income, but things went a little silly in the last 20% of the graph.

You have strong traction and a way to continue that traction. Where do I send my investment check?

I would have told this story differently. Instead of cramming this slide with logos and sales partners, I’d have featured the sales order history up front and backed it up with some way of showing that the exponential growth isn’t a fluke, but the result of a repeatable sales approach.

When you tell the story that way, it almost doesn’t matter what the rest of the deck says. You have strong traction and a way to continue that traction. I expect that ANYbotics goes into more detail on this front on slide 16, and if I were a potential investor, I’d find myself asking a very important question: Where do I send my investment check?

In the rest of this teardown, we’ll take a look at three things ANYbotics could have improved or done differently, along with the company’s full pitch deck!

Three things that could be improved

An important part of raising growth funding is showing how you’re going to achieve that growth. Unfortunately, and perhaps understandably, the company redacted some of the slides that help us get the full picture of that growth (slide 17, in particular). Still, reading between and around the lines, I can spot some things that might benefit from a tune-up.

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5 lessons robotics founders can learn from the AV industry

Sanjay Aggarwal Contributor
Sanjay Aggarwal is a venture partner at F-Prime Capital focused on frontier technology investment opportunities.

Throughout the late 2010s and early 2020s, the autonomous vehicle industry captured the imagination of the startup community and the public. However, the category’s meteoric rise preceded an even more meteoric fall over the last 18 to 24 months. From 2018 to 2021, investments in the AV sector across the U.S. and Europe increased by nearly 2.5x, eventually peaking at close to $10 billion in 2021. Then, in 2022, investments fell to $4 billion, with 2023 likely to see further precipitous declines.

Meanwhile, the broader robotics ecosystem has continued to flourish, with companies focused on mostly industrial “vertical” use cases now commanding the bulk of investment dollars. In 2022, these companies attracted $7 billion in investments, defying the broader slowdown in VC investment by growing 15% over the previous year.

We recently analyzed the trends shaping the industry in our State of Robotics report, and identified five lessons that the next generation of robotics founders can take from the successes and failures of the AV industry.

in 2022 ,vertical robotics attracted the most investment dollars.

F-Prime State of Robotics Report. Image Credits: F-Prime Capital

VC excitement for hardware businesses is higher than ever

In the U.S. and Europe, more than $60 billion have been invested in robotics and AV alone over five years, with the AV sector leading the way. AI is making hardware much smarter, which is enabling companies to generate the kind of high-margin recurring revenues typically associated with software businesses.

AI also creates opportunities to disrupt traditional industries with massive addressable markets. For example, across the logistics ecosystem, AV companies such as Aurora are disrupting the trucking industry, while companies like Locus and RightHand Robotics (an F-Prime portfolio company) are transforming how fulfillment operations are done.

For founders, this surge in interest means there are more robotics investors than ever, ranging from newcomers in the category to those with an extensive track record in the space. Even top-tier investors such as Sequoia and Andreessen Horowitz are starting to make investments in the category, an encouraging bellwether for overall VC interest in robotics.

Nevertheless, hardware-oriented investments are not the right fit for all investors, and it’s best to seek out those who have made a commitment to robotics and understand what it takes to be successful.

You must eventually build a real business

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Europe could be on the cusp of a golden era in robotics. Here’s why

Robin Godenrath Contributor
Robin Godenrath is founding partner and managing director at Picus Capital. His focus is early-stage technology investments, particularly in HR tech, robotics, and healthcare industries.
Alex Rohregger Contributor
Alex Rohregger is an Investor at Picus Capital. His focus is on early-stage robotics, AI, and DevTool investments.

The United States and China have long been ahead of the pack when it comes to robotics funding. However, data from 2022 is showing that these innovation hubs may have some serious competition as the investment landscape in Europe is starting to outstrip robotics’ biggest players.

The quest for technological supremacy has often been seen as a two-horse race between the U.S. and China. Over the years, we’ve only seen this investment tug-of-war intensify as both economies have vied for dominion to become an innovation superpower. Whilst in the past robotics has seen a similar dynamic, based on 2022 data, investors are starting to place their bets on an up-and-coming contender: Europe.

In 2022, nearly $8.5 billion in funding flowed into robotics companies worldwide — a staggering 42% less than the year prior – in line with the overall global downturn in VC investment. Yet despite the change in economic situation, with total USD investment volume into robotics falling by over 50% for both the U.S. and China between 2021 and 2022, Europe has seen a far more modest decline, only dropping 5% in the same period. Although it’s still early, we’re convinced it’s just the beginning of how Europe is finally beginning to find its place within the modern robotics ecosystem.

Europe emerges as a serious contender with a strong rate of growth

Whilst in the past robotics has seen a similar dynamic, based on 2022 data, investors are starting to place their bets on an up-and-coming contender: Europe.

When we compare Europe’s rate of growth in investment volume within robotics to the U.S. and Chinese markets, we observe a few key trends driving the continent’s recent power play in the robotics market.

With a CAGR of 28% in the period from 2018 to 2022, Europe is already surging ahead compared to global growth figures at 2%. This growth is primarily being led by Germany, which has seen a 77% growth spurt of investment volumes into the robotic space.

Close neighbor France has seen a 54% increase in robotic investment amounts. Meanwhile, robotics powerhouses China and the U.S. have experienced a decline in growth, with robotics investment falling 5% and 2% respectively since 2018.

China and the U.S. experience a 60% slow-down in growth/late-stage funding

To better understand these market shifts, we need to take a deep dive into the funding landscape and explore the state of play by funding rounds.

Slicing our data into grants, early-stage (pre-seed to Series A) and growth/late stage (Series B and onwards), we observed a major slow-down across U.S. and China robotics funding across growth and late-stage investment rounds.

Both the U.S. and China saw a decline of growth/late-stage robotic investment volume by 60% compared to 2021. Meanwhile, looking at the European market, the total investment volume for growth and late-stage deals was only slightly less than those of 2021.

Surprisingly, China has seen an 4% uptick in early-stage investments, whilst Europe and U.S. followed a similar downward trend – a potential sign for new ventures brewing. The trends in the growth/late -stage funding environments, accounting for the lion’s share in terms of investment volume, helps understand the relative stability in Europe.

Comparison in investment volume between 2021 and 2022 across geographies.

Comparison in investment volume between 2021 and 2022 across geographies. Image: Picus Capital with data from Crunchbase

Under the surface, 2022 saw more European robotic firms consistently raise capital — 20 growth/late-stage rounds — and fewer outliers driving investment volume. By comparison, European robotics investments in 2021 were more prominently driven by outliers across 13 growth/late-stage rounds with an average round size of $108M USD. Meanwhile, the U.S. and China have seen a decline across a number of deals and mean & median investment amounts.

Growth/late-stage funding is complex. Nevertheless, we think that one dynamic influencing the change in investment volume discrepancy between U.S., China, and Europe is the shift in priorities for growth and late-stage funds – from growth to profitability. The continued funding into European robotic companies at these stages indicate that these companies are able to meet growth stage criteria better than U.S. companies. This is what we believe will also continue to be relevant throughout 2023.

Europe could be on the cusp of a golden era in robotics. Here’s why by Walter Thompson originally published on TechCrunch

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13 VCs talk about the state of robotics investing in 2023

Robotics is a fascinating topic. It can be frustrating, too. When I started covering the space nearly 15 years ago, there was a sense that something big was looming, just over the horizon. But roboticists are a pragmatic bunch, offering projects for adoption more than a decade into the future.

There were times in the intervening years when it felt like those goal posts were being pushed back. This stuff is extremely hard to get right, and it’s even harder to make systems robust and repeatable at scale.

But the beginning of the pandemic offered what truly felt like a tangible shift. As everyone not deemed an essential worker was told to stay home, businesses were faced with a problem: how to keep the lights on. Another related problem emerged, as well: how to deliver goods at scale to people who can’t — or don’t want to — leave their homes.

What many outside the sector perhaps didn’t recognize is that the solutions were already here. Amazon’s unending drive to outflank the rest of the world birthed an industry with its 2012 acquisition of Kiva. In March 2020, companies like Locus, 6 River Systems and Fetch were happy to jump in and help warehouses automate.

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Investments began flooding into robotics around this time. Most warehouses aren’t automated, so there’s tremendous room for growth. Categories like construction, agriculture and health care, among others, were very much looking to automate. Robotics was in a nice little bubble when the VC slowdown began, as well, though not even it was immune.

Slowed investments have been compounded by continued economic woes and the recent bank collapses have further shaken confidence. Robotics has always been a tricky sector for investors, after all: It requires a lot of money and continued commitment to bring things to market at scale. Anyone looking to make a quick buck should avoid the category at all costs.

In spite of all that, however, robotics remains vibrant and exciting, and it unquestionably has a bright future of exponential growth ahead. No one can accuse the category of being a hype bubble. It hasn’t entered the hype cycle the way things like crypto and generative AI have.

And there’s not a lot of gray area here. That’s something roboticists love about robots: They work or they don’t. What’s been continually and increasingly proven is that they absolutely do.

It’s been a few years since we conducted a robotics investor survey, but the time in between has arguably been the most important years for the sector. We spoke to 13 of the top robotics VCs to discuss where the category is and what the future looks like.

We spoke with:

Milo Werner, general partner, The Engine

How is robotics investing different than in previous years? What role have the pandemic, slowing economy and recent bank crisis had on your investments?

Robotics innovation had somewhat plateaued: Capability to innovate was heavily based on a startup’s ability to raise capital. The more money, the better the robotics; think Boston Dynamics. But with the growth of multi-modal AI models, we see a huge opportunity for robotics to become multipurpose because these models enable common sense and require little training. The best example of this is Google’s PaLM-E, which is a generalist robot that takes verbal commands. This is just the tip of the spear and generalist robots are going to become much more common.

What is the next big robotics success story after warehouse/fulfillment?

Basically everything around you will become a robot. The simplest example is autonomous vehicles. These are very advanced robots and have been open to riders since 2018. The labor shortages are going to drive significant growth in the service sectors including cleaning, food and care services.

While there are already automated single-purpose solutions in these areas, more general purpose robots are going to start to take front stage in the next decade.

What categories are the most underserved by robotics startups? What would you like to see more of?

I’d love to see more robots in the home. I think there is a real opportunity for a general purpose robot that supports in the kitchen. Where is the Instant Pot of stir fry?

How essential is DARPA/defense funding to the category in 2023?

Public sector support will be very important. The private sector is the fastest way to scale, but it is directionless. The public sector is great at providing direction and focus.

Can/will robotics play a fundamental role in addressing climate change?

Absolutely. You’re already seeing robotics implementations across agriculture, ranging from robots that assist with crop maintenance, supplement workforce to address labor shortages, and offer tools and processes that are self-sustained from the sun and don’t require recharging.

Another area robotics are helping with climate change is in enabling more accurate, cleaner trash and recycling streams. Robots are automating our grid and today, in essence, our entire energy supply can essentially be thought of as a giant robot: integrating and decentralizing power generation and moving quickly to intelligent automated controls.

Will robotics and automation replace human jobs in the long run?

Yes, absolutely, but it’s more freeing humans from work than replacing them. We should look at this with excitement. The harder challenge is going to be steering that productivity in a positive direction. I’d love to see us really embrace spending time building a positive global community with prosperity across the planet

What are your feelings on the RaaS (robotics as a service) model for monetizing robots?

It’s just a financing question. It’s just another way to get paid for the value you are delivering. Think of Peloton: People rent them, and for no better description, it’s an exercise robot.

Following the lead of robot vacuums, how long will it take before additional home robot categories go truly mainstream?

This is closer than you think. Now that safety concerns have been addressed, adoption will be driven by cost, usefulness and value creation.

Abe Murray, managing partner, Alley Robotics Ventures

How is robotics investing different than in previous years? What role have the pandemic, slowing economy and recent bank crisis had on your investments?

We are one year into our robotics investing journey; the new normal is all I know. Certainly valuations have come down alongside tech valuations, and the end of ZIRP is having a broad impact on venture investing. However, we remain unwaveringly optimistic about robotics in the long term.

13 VCs talk about the state of robotics investing in 2023 by Brian Heater originally published on TechCrunch

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Blinded by the speed of change

My grandfather lived through an incredible period of technological change. He saw the invention of the automobile, the airplane and the rocket. He lived through the dawn of the atomic age and the mainframe computer. He didn’t live long enough to see the PC or the impact it would have on my professional life, but he was around for the creation of a lot of the technology that laid the foundation for what’s happening today.

I’ve been at this for a long time myself. I remember working on an early IBM PC. Later, I accessed the text-based internet via a 300 baud modem. I can recall the earliest days of the world wide web.

My first cell phone was a Motorola brick phone. My first iPhone was the 3. Bottom line is I’ve seen a lot of technological change, and I’ve never seen anything like we’re seeing these past months, weeks and days.

Consider for a moment that ChatGPT 3.5 took the world by storm in December. Last week, while I was on vacation, OpenAI released ChatGPT 4, which OpenAI unabashedly called “state of the art.” This week, we saw the announcement of plug-ins for the internet itself and useful tools like Expedia, WolframAlpha and so many others, suddenly accelerating generative AI in new and exciting directions.

All of this is happening with stunning speed. It feels like we’re living through an inflection point, much like we saw with the first IBM PC, the internet, the web, the iPhone. But this moment of change is happening so fast, we’ve barely got time to process the latest twist before the next iteration comes flying down the chute.

And like those moments we saw with the advent of personal computing, connected computing and mobile computing, you know that something huge is happening, but it’s not clear yet what it will become. At the moment, we know that there is an exciting new technology that can change the way we interact with computers, but we aren’t clear yet how that will play out, any more than we knew how the web or smartphones would transform our lives in ways we really couldn’t imagine in the earliest days.

On a panel last week led by Docker CEO Scott Johnston, Ilan Rabinovich, SVP of product and community at Datadog, talked about the similarities between what we’re seeing now and the early days of the internet.

Blinded by the speed of change by Ron Miller originally published on TechCrunch

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Is generative AI really ready for the enterprise?

OpenAI released ChatGPT just a few short months ago, and it’s fair to say that it took the world by storm: It has over 100 million active users already. No wonder, when it can generate human-like, grammatically correct responses. Related technologies can also produce artwork and code by entering a description of what you want, and the tech produces it.

You can even interact with the AI after your initial question, so if you don’t like the output you got or need clarification, you can ask additional questions or make adjustments to your picture or code, so it more closely matches your vision. All of this happens instantly without the help of a subject expert, an artist or a coder.

But none of this comes without issues, which include the sourcing of the data used to train the underlying AI model, the currency of that training data, a lack of permissions to use the source data, bias in the model and, perhaps most importantly, the accuracy of the responses, which are sometimes laughably wrong.

None of this has stopped enterprise software companies from taking the generative AI plunge. These companies see massive commercial potential and a lot of enthusiasm from users and they clearly don’t want to get left behind.

Salesforce, Forethought and Thoughtspot all recently announced betas of their own flavors of generative AI. Salesforce is adding generative AI across the platform. Forethought is aiming at chatbots and Thoughtspot wants to use AI for data querying. Each company took the base technology and added some algorithmic boosters to tune the tech for their platform’s unique requirements.

Microsoft also announced that its OpenAI service aimed at enterprise users on Azure is generally available as a managed service.

Throughout this year you can expect to see many more companies joining in, but the limitations are real, which makes us wonder: Is the technology — as early and raw as it is, no matter how cool it looks on its face — really enterprise ready?

Is generative AI really ready for the enterprise? by Ron Miller originally published on TechCrunch

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At Upfront Summit 2023, AI is the omnipresent celebrity

A marching band, a red carpet and a DJ who codes her beats are all things you can get before coffee (and a business card) at the Upfront Summit, one of venture’s most awaited conferences. But not even a marching band couldn’t pull focus away from the true star of the show: AI.

Upfront Summit founder Mark Suster and partners Kerry Bennett and Kobie Fuller even performed a sketch centered around AI. The takeaway? AI is a tempting sector to invest in, but it’s too still early to trust blindly.

This isn’t new; hyped-up technologies often get outsized interest. But the atmosphere is different from what it was in 2021 when investors were throwing billions of dollars at 15-minute grocery delivery companies and web3. Venture dry powder is locked up, deals are getting done slower, and some investors are still licking their wounds from the downturn thus far.

AI is feeling it. According to a TechCrunch analysis of PitchBook data, “generative AI companies aren’t going to even set a local quarterly maximum for fundraising in Q1 2023.” Understanding how recently humbled check-writers are thinking about AI will help tech better understand how to execute moonshot visions.

At Upfront Summit 2023, AI is the omnipresent celebrity by Natasha Mascarenhas originally published on TechCrunch

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Will AI receive the same celebrity-fueled hype as crypto once did? It’s complicated

When the crypto world was at its latest peak, celebrities quickly joined the gold rush. Tom Brady started a buzzy NFT business for athletes and entertainers with backing from a16z and Kleiner Perkins, among others. Reese Witherspoon said crypto is here to stay, encouraging “more women to be a part of the conversation.” And Paris Hilton, a longtime crypto enthusiast, reportedly named two of her newest pets “Crypto Hilton” and “Ether Reum.”

As crypto has sputtered and struggled in recent months, the spotlight is now on AI. Will celebrities follow venture’s newest hype train? Buzzy products spun out from OpenAI, such as ChatGPT and GPT-3, are helping to land billions in VC interest. But core differences between AI and crypto may mean that influencers turned venture capitalists may not be as eager to jump.

But does AI even need celebrities touting its many applications?

Will AI receive the same celebrity-fueled hype as crypto once did? It’s complicated by Natasha Mascarenhas originally published on TechCrunch

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A VC’s perspective on deep tech fundraising in Q1 2023

Karthee Madasamy Contributor
Karthee Madasamy is the managing partner at MFV Partners, a deep tech-focused venture firm.

Like nearly every other sector, deep tech faced significant headwinds in 2022. As interest rates skyrocketed, deep tech deals, which inherently take more capital than other kinds of software businesses, became less attractive to many VCs and their LPs than lower-risk investments.

For instance, even though quantum computing suddenly became popular in the public markets as D-Wave, Rigetti and IonQ listed in the last year, private investment declined significantly — the sector received just over $600 million in venture capital in 2022, down from $800 million in 2021, according to Crunchbase.

Seasoned investors and operators in different segments of deep tech have been adapting to these changes in real time as the cheap money days dwindle in the rearview. For instance, in this environment, space tech startups would never have been able to raise the kind of money they did in 2021 to be able to deploy the technologies they’re working on today. As Delian Asparouhov, a principal at Founders Fund and the founder of Varda Space Industries, shared last month, it would be impossible to raise the $42 million his startup did in 2021 for its space factory “idea” in today’s market climate.

While some investors will continue to sit on the sidelines as we kick off 2023, it’s important to note that many funds are still sitting on amounts of dry powder like they’ve never had before. That doesn’t mean they or their LPs will be in a rush to deploy that capital, but money will be available to startups that can demonstrate current demand and are realistic about their valuations. As it becomes increasingly difficult to realize big exits in the years ahead, the technologies within deep tech that are transforming entire industries offer some of the only paths to “10x exits.”

These are positive signs for deep tech founders preparing to raise money this year. Another positive note is that some of the logic driving VCs to stay away from deep tech startups in down markets may be unfounded. Our team recently analyzed recent deep tech unicorns to understand how much money it took for them to get to the $1 billion mark. The results reinforced what we knew from experience: Deep tech startups’ capital and time requirements are on par with companies in other sectors. In fact, the median deep tech startup took $115 million and 5.2 years to become a unicorn.

While the space economy will continue to provide numerous opportunities to invest in atoms, there will also be an opportunity to invest in the bits moving atoms across our skies.

With that as a backdrop, let’s look at a few areas where deep tech will find interest from investors in 2023.

Startups moving beyond launch tech in space

While Delian noted correctly that funding for long-term “moon shots” will be tough to find in the current market, I still believe investors will look for startups that are closer to commercialization in the sector. To date, 99% of the total investment in the space tech market has gone to the satellite and launch industries. Now is the time to focus on moving objects around in space rather than just getting them there.

For instance, investors are increasingly interested in solutions that tackle astrodynamics or propulsion to guide the motion of satellites and other spacecraft — for example, AI startups working on ways to simulate scenarios and generate maneuver plans for operators so they can avoid space collisions. Investors are also interested in future machine learning and neural networks use cases for astrodynamics, such as orbit predictions and spacecraft flight modeling.

Space missions also call for hardened software and hardware. As we look toward edge solutions for space-bound vehicles and objects, startups that can create radiation-safe applications will be in demand. So while the space economy will continue to provide numerous opportunities to invest in atoms, there will also be an opportunity to invest in the bits moving atoms across our skies.

Deep tech riding climate’s regulatory wave

Software alone will never solve the multitude of issues contributing to our climate crisis. Hardware solutions and engineering-led innovations in deep tech are needed to solve our most significant climate challenges.

A VC’s perspective on deep tech fundraising in Q1 2023 by Ram Iyer originally published on TechCrunch

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Show, don’t tell: Tips for robotics startups raising a Series B during a downturn

Jason Schoettler Contributor
Jason Schoettler is co-founder and managing partner of Calibrate Ventures.

Raising a Series B for any startup is challenging right now, with many VCs pulling back on investments — funding for Series B rounds across all sectors fell 55% in August compared to a year earlier, for example.

But raising a Series B for a hardware startup can be even tougher. It has simply always been more difficult to get venture investors to fund a robotics project compared to a software-only venture, given robotics’ high capital requirements and the greater risk.

However, the climb uphill can get much easier if a robotics startup can showcase a solid business model, measurable metrics and a plan for the next 18 months. As an investor in AI and automation companies for over 20 years, I’ve backed dozens of robotics companies, and I continue to be bullish on the space.

You need to show that customers are deriving real value from your robots — saving time, money or both.

Here are several strategies founders can use to prepare their robotics companies for a successful Series B.

Show how your robot works

Robots are inherently visual (can anyone forget that video of Boston Dynamics robots dancing?) So when you pitch VCs on your automation company, it pays to demonstrate your robots in action.

If your robots are large installations in warehouses or on manufacturing lines, invite VCs to come to see them working. If they are small enough to transport, bring them with you to the pitch meeting. And always have high-quality video available to share on a computer or tablet during in-person pitches or online for virtual meetings. Seeing your product in action is critical to getting investors excited about it.

Show customer ROI

Show, don’t tell: Tips for robotics startups raising a Series B during a downturn by Ram Iyer originally published on TechCrunch