Even Amazon can’t quite figure out what Astro is for

Amazon’s cute little Astro robot has been scurrying its way around my apartment for the past few weeks. It has no arms to scratch its own head in confusion, but I am willing to do that for him. As part of Amazon’s Day 1 Editions program, the robot is a $1,000 invitation-only program with limited numbers of robots available, as the company is trying to get them into consumers’ hands with a question: How would you use this?

The company suggests that some use cases include home monitoring — an autonomous home-security system that can wander around from room to room. Astro has the ability to patrol a home with Ring Protect Pro, pop its periscope camera to see the counters, detect unidentified people when in “away mode,” send alerts when it hears sounds like glass breaking and more. You can also use it when you’re home — if you hear the dog barking at night, you can send Astro to see what’s happening without having to leave the cozy cocoon of your duvet-burrito.

The company also suggests that Astro might be a good solution for offering remote care. Your loved one can ask Astro to set and deliver reminders, or you can use Drop In to stay connected. Plus, Astro works with Alexa Together, which allows for remote care for aging loved ones, or for offering care for people who have mobility challenges or other disabilities.

Amazon also offers companionship as a potential use case — it suggests all the fun things Astro can do (things like “Astro beatbox,” or “what’s your favorite animal?” are top items, the company suggests), and it has other features that make it seem more like a pet than a Skynet-harboring robot of death and destruction.

The whole purpose of a Day 1 Edition product is for Amazon’s product teams to get their most ambitious projects into customers’ hands faster so they can provide feedback that, in this case, will help shape the Astro experience. It makes sense. Right now, Astro is a robust system and can handle a wide array of commands and tasks that customers are finding useful. The robot has a little carrying tray and a USB port for extensions that will give it any number of interesting new powers, extendable by hackers and tech-savvy users, much in the same way that someone can write and deploy an Alexa skill today.

Astro’s sensors mean it doesn’t bump into things too often. And the paint along the bottom of the chassis, and the scrapes on the walls of my apartment, indicate that Astro still has a little bit of learning to do on that front. Image Credits: Haje Kamps for TechCrunch

Personally, throughout my time with Astro, I thought the robot was adorable. The speakers are good, and it’s kinda fun to have a boombox trail around and play your tunes or podcasts as you are doing chores. As a piece of first-generation tech, it’s an impressive feat that has tremendous potential. But that alone isn’t enough to make a product. In a world where the environment is front of mind, we could do with fewer gadgets that will end up in landfills eventually, not more, and so I find myself wondering what this thing is for. I can imagine a number of niche use cases — including the ones listed above — but I keep being unclear on whether this is a device that needs to exist at all.

I spoke with Anthony Robson, the principal product manager for robotic technologies and consumer robotics at Amazon, to try to get to the bottom of things. It quickly became clear that Astro’s ambition is sky-high, and that the Amazon team doesn’t quite know which direction that ambition will take it. By design, it claims, which I have some respect for, but it seems weird to me to take a “let’s build it and see if they will come, and what they will use it for” approach.

Don’t misunderstand me; I do believe there are places and use cases where Amazon’s adorable little robot friend makes a lot of sense — but when I talk to startups day in and day out, it feels really jarring. I wouldn’t let a startup get away with a solution looking for a problem, and so it feels curious to be tempted to let Amazon — who really should know better — off the hook.

“This is the very first robot in a brand new category of robots. When we started this program, we were like, why not us? Why not Amazon? You know, we have this great ecosystem with Alex and the AI chops to be able to do this. Let’s do it, let’s learn from customers,” comments Robson. “We went out and did a lot of research around what kinds of things people could envision robots helping them in their home. The home monitoring capabilities were certainly the most popular thing people could envision. I’d love to be able to check if I left the stove on, or whether my back door is unlocked. I’d love to be able to check if I need to buy bananas because the fruit bowl is empty. I want to be able to check if the kids came home or to be notified when they come home. I want to be able to talk to them and find them in the house. So that was a very popular use case that people identified. There are a number of use cases.”

Astro Cargo Bay

Astro’s cargo bay is sizeable and has a USB-C port to extend its functionality further. An SDK to build software for Astro is in the works, Amazon suggests. Image Credits: Haje Kamps for TechCrunch

The ideas came fast and thick, and every time I found myself wondering; yes, but… Really? Would customers potentially pay $1,000 to solve this problem?

Of course, the additional flexibility of the Astro platform broadens the potential quite a bit.

“We insisted on having some level of extensibility. We’re gonna learn so much about every home — and every home is going to be different and have different needs. So we added a cargo bay area with a USB port, and asked the question ‘how can we extend this platform to do more things for more people?’ We didn’t envision at the beginning of this program that we would have a pet food dispenser at the launch event,” marvels Robson. “We have customers who are working in their home offices on either side of the house sending things to each other using their Astro. We are learning, we are listening and we are adapting. We’re going to extend Astro’s capabilities as we learn from customers.”

The product team does have a few things on its wish list that it wasn’t able to prioritize for launch for various reasons.

“There are a lot of things that, simply from a practical perspective, we couldn’t add. Astro doesn’t climb stairs, for example. The level of complexity that would add to the product would simply make it too costly, and make it so it’s not accessible to as many people as we would like,” explains Robson. “We had to make trade-offs like that. We would have liked the periscope camera to go that little bit higher. But we had to compromise and say, you know, this is just enough to see over the counters. That is perfect — that keeps the device small.”

The product team also suggests that it wanted Astro to be able to move around much faster. At its current pace, you can out-walk it if you stroll briskly through the hallways of your mansion — but speed also equals trade-offs. The laws of physics start getting in the way pretty quickly, in other words.

“Again, the complexity of being able to make sure that it can be safe at all times goes up exponentially. A factor of two, with every increase in speed,” explains Robson. “You have to be very judicious about how much speed you put in because it’s going to make your sensing and your safety solutions twice or multiple times more complex.”

The Astro team hasn’t launched a developer toolkit for the Astro robot yet, but that’s on its way, too.

“We’re working hard with strategic partners. I think [an Astro SDK] is going to be happening. We want to bring that intelligent motion capability to more and more skills and accessories in the future,” says Robson. “It is not something we have ready today, but it’s coming very soon. We’re working on it as hard as we can.”

Amazon Astro with periscope camera

The periscope camera pops out and extends telescopically, enabling Astro to look over obstacles and on countertops. A very elegant design choice. Image Credits: Haje Kamps for TechCrunch

The comms team for Astro is excited about the potential of the robot as a comms and monitoring tool. It tells the story of one customer; their father-in-law had fallen out of his wheelchair. The family used Astro to communicate and coordinate emergency service responses to help him get back up. Giving additional, roaming assistance to people living independently seems like a powerful use case — except for the quirk of Astro not being able to climb stairs or open doors.

I did have a couple of fun interactions with Astro that surprised and delighted me. For example, as one part of the setup process, Astro tells you to take a couple of steps back to make space for it to leave its charging dock. As it did that, I swear it flicked the screen representing its “face”, much like one would wave one’s hands to shoo someone away. I was never able to get Astro to do it again, and the product team wasn’t able to confirm whether I hallucinated that, or whether that’s something Astro actually does.

“You know, that’s the thing when you give a robot a body language, depending on what it has to do, it’s going to move in the way it needs to move. Sometimes those things end up being interesting combinations,” laughed Robson. “So I can’t think of exactly why that would happen, but… I have been surprised by Astro before.”

Astro is an extraordinarily well-thought-out robot on a technical level. The big wheels mean it can climb over thresholds between rooms with no issues. It got stuck on my bath mat a few times but managed to dislodge itself every time, which is impressive. When I was testing Astro, I also had a foster kitten, and Astro and Chairman Meow seemed to become good friends, with the two of them chasing each other around the apartment. Astro ran over Meow’s tail once, and Meow got his revenge by folding over the bath mat, trapping Astro in the bathroom for a few hours. I’m not convinced Meow did that on purpose, to be fair, but it did strike me as funny.

The periscope camera is an extraordinarily clever feature that dramatically increases the usefulness of Astra, and the wayfinding tech is impressive. Telling Astro to go to the kitchen, and having it dutifully scurrying its way around my stacks of Amazon deliveries, office chairs and the odd shoe strewn along the flow was entertaining. A lot of work went into making Astro seem non-threatening. It moves slowly and gingerly near people and pets, it doesn’t bump into stuff all that much, and when it does, it does so carefully. The screen and Astro’s “face” are expressive, and cute, and invite a high degree of trust and user-friendliness. It shows that Amazon has the capacity of building incredibly capable robotics, even when it is compromising on product issues along the way.

It’s been fun to have Astro wandering about my apartment for a few days, and most of the time I seemed to use it as a roving boom box that also has Alexa capabilities. That’s cute, and all, but $1,000 would buy Alexa devices for every thinkable surface in my room and leave me with enough cash left over to cover the house in cameras. I simply continue to struggle with why Astro makes sense. But then, that’s true for any product that is trying to carve out a brand new product category.

I won’t miss it when I return it to its corporate office to be passed on to the next journalist who will be taking a closer look, which is rarely a good sign, but I hope that Amazon learns enough so it becomes better at telling the story of its adorable little robot. It is, truly, a solution that is carefully and adorably scurrying around looking for a use case. If Astro’s persistence is any indication, it will eventually find one.

TechCrunch+ roundup: Construction tech survey, founder-CEO friction, diversify your cap table

The technological advances we’ve made over the last few thousand years are stunning, but the construction industry still relies on centuries-old technology.

Configuring a robot to mix cement is easy, but delivering a CementTron 3000 to a job site, training employees on its use, and keeping it maintained are not the kinds of disruptions builders are looking for, especially when margins are so thin and experienced workers are hard to find.

Even so, investors are backing startups bringing robotics, data management, automation and augmented reality into the construction process.

Many major construction firms operate their own R&D divisions, but that hasn’t substantially changed attitudes about adopting new tech: in one survey, more than one-third of respondents who worked in the industry said they are ambivalent about using new tools. Despite their reluctance, growing numbers of construction tech startups are helping builders with bidding, scheduling, modeling software, and, quite frequently, drones.

To learn more about the market forces shaping construction tech in 2022, we spoke to five investors:

  • Nikitas Koutoupes, managing director, Insight Partners
  • Heinrich Gröller, partner, Speedinvest
  • Momei Qu, managing director, PSP Growth
  • Suzanne Fletcher, venture partner, Prime Movers Lab
  • Sungjoon Cho, general partner, D20 Capital

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TechCrunch columnist Sophie Alcorn will join a TechCrunch+ Twitter Space on Tuesday, May 24.

Image Credits: Bryce Durbin/Sophie Alcorn

On Tuesday, May 24 at 8:30 a.m. PT/11:30 a.m. ET, I’m hosting a Twitter Space with Silicon Valley immigration lawyer Sophie Alcorn, who writes the “Dear Sophie” advice column for TechCrunch+ each Wednesday. If you have questions about working and living legally in the United States, please join the conversation.

To get a reminder before the chat, follow @TechCrunchplus on Twitter.

Thanks very much for reading: I hope you have a relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch+

For better or for worse: Managing founder-CEO tension inside a startup

Hands pulling rubber band

Image Credits: Flashpop (opens in a new window) / Getty Images

Technical founders often recruit a CEO who can fill in gaps in their business experience, but if they cannot build a strong partnership, everyone suffers.

Metaphorically, imagine two people in a lifeboat arguing over which direction leads to land.

Managing potential points of tension is critical, but founders must be pragmatic: Only choose someone you respect, and be prepared to invest time and energy into cultivating a close relationship, advises Max Schireson, an executive-in-residence at Battery Ventures. Previously, the co-founders of MongoDB hired him to be their CEO.

“In the best case, a strong partnership can pioneer new models and build a lasting and impactful company,” says Schireson.

Dear Sophie: Can I do anything to speed up the EAD renewal process?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I’m on an L-2 visa as a dependent spouse to my husband’s L-1A.

My EAD (work permit) is expiring in May — we filed for the extension of both my visa and EAD a few months ago. How long is the current process?

Might there be anything I can do so my employment isn’t affected?

— Career Centered

The one-chart argument that tech valuations have fallen too far

As you may have heard, tech companies are having a bit of a whoopsie.

But is it possible that stock sellers have gone overboard when it comes to devaluing these startups so deeply and so quickly?

Alex Wilhelm says they have, in large part because “select tech concerns are now worth less than they were before the pandemic, despite having a few years of growth in the bank.”

To make his case, he tracked the share price for Okta and found that the identity platform’s share price has rolled back to where it was in early 2019.

“It’s also about three times as large,” writes Alex. “But it is now worth less today than it was back then. Chew on that.”

3 things to remember when diversifying your startup’s cap table

High Angle View Of Multi Colored Toys Over White Background

Image Credits: redmal (opens in a new window) / Getty Images

Just as a sales team builds and refines its funnel, early-stage founders in fundraising mode can create an investor funnel that will help sustain their company for years to come.

Oriana Papin-Zoghbi, CEO and co-founder of women’s health startup AOA Dx, shared her investor breakdown with TC+:

  • 35% private investors.
  • 34% women (female investors or female-headed funds).
  • 26% venture capitalists.
  • 23% family and friends.
  • 18% international investors.
  • 15% angel groups.

“When building an investor funnel, vocalizing what you want is crucial to finding the right investors,” says Papin-Zoghbi.

“Finding the right investors is like finding the right team members — you need to be upfront about your expectations and address what you want them to bring to the table.”

Pitch Deck Teardown: BoxedUp’s $2.3M seed round pitch deck

When video production equipment rental company BoxedUp launched, it initially focused on serving corporate customers who hosted events and conferences.

And then, it pivoted: Earlier this year, BoxedUp raised a $2.3 million seed round to scale up its rental marketplace where individuals can rent high-end equipment directly to creators.

“We found a $10 billion opportunity where owner-operators are renting things out via Instagram and rental shops are still using really old websites,” said CEO and founder Donald Boone.

“Instead of spending $30,000 to buy a camera to rent out one at a time, we could instead create the platform to connect people that have that $30,000 camera,” he told TechCrunch in March.

To help other founders replicate his success with BoxedUp’s seed round, he’s shared the unreacted 22-slide pitch deck with TechCrunch+.

The lowdown on the slowdown

Kicking things off this week with some data culled by the folks over at Crunchbase that’s very much in line with what we’ve been saying on Actuator all along. The past couple of years have been genuinely transformational for robotics. Since the beginning of the pandemic, the conversations I’ve been having with startups and VCs about an automated future have shifted to the now. A highly transmittable virus coupled with an ongoing labor crisis has a way of moving mountains.

That said, there are certain external forces and unavoidable realities to investing. As Alex and Anna noted late last month in a pieced titled, “The venture slowdown is impacting fundraising for startups of every size, sector” (TechCrunch+ subscription required):

The value of technology stocks began to decline in late 2021, a slide that continued into 2022, leaving many tech shops trading at a stiff discount to their recent valuation highs. Given that late-stage startup valuations are the most easily compared to those of public companies, it was expected that growth-stage investors would shake up their pricing models and perhaps reduce their risk appetite.

These forces appear to have had some impact on robotics — but given the tailwinds of the past couple of years, the sector is still performing strongly. Automation is something companies invest in to steel themselves for bleak times — be it labor issues, supply chain crises, competition or keeping up with increased demand. The current moment is a reminder of how important it is to prepare oneself for future issues.

Image Credits: Crunchbase

All of these factors are borne out by Crunchbase’s latest figures on the category,

Last year more than $17 billion poured into VC-backed robotic startups, nearly triple the investment in 2020. This year is a little behind that pace, but the sector already has seen more than $5 billion flow to startups.

Anecdotally, I’d say that’s well in line with what we’ve been seeing on our end: a big, pandemic-fueled spike in investments, followed by a slight slowdown. But that slowdown is nothing compared to the broader funding issues startups are currently facing. As ever, certain sub-categories within robotics are going to regress to the mean, but warehouse/fulfillment, manufacturing, agtech, medical and food appear well positioned here.

warehouse robots

Image Credits: GreyOrange

An extremely small sample size, I realize, but another flurry of activity this week points to sustained interest among investors. The first comes to us by way of GreyOrange, which recently struck a partnership with Walmart Canada. Though the company went the less traditional debt financing round here, with backing from Mithril Capital Management and BlackRock. The $110 million raise follows rumors last year that the India/Denver-based firm was planning an IPO (which, again, given current market conditions, might not have been the wisest move).

On that note, CEO Samay Kohli tells me:

Success for us looks like solving big challenges in fulfillment for as many customers as possible globally. We’re firmly focused on how we can deliver on surging demand from our customers as quickly and efficiently as possible. An IPO is certainly a viable option to make that happen in the future.

Flexxbotics founders

Image Credits: Flexxbotics founders

Haje has the latest on Boston-based Flexxbotics, which is working to deliver work-cell manufacturing to the cloud. The firm raised a $2.9 million Series A for software solutions to connect robots with other manufacturing tools.

“Flexxbotics is focused on the mission of helping discrete manufacturing companies complete the digital transformation,” CEO Tyler Bouchard tells TechCrunch. “These companies have struggled with the challenge of connecting ERP, MES and other modern business systems with the legacy production equipment on the shop floor,” says Bouchard. “Our vision is to change that by providing a turnkey tool kit to seamlessly connect robots, CNC machines, PLCs and other manufacturing with each other through a shop floor communications mesh.”

Some interesting news out of DeepMind this week, as well. The Alphabet-owned firm unveiled Gato, a “general purpose” AI system that’s made some pretty amazing leaps. The system is capable of a wide range of different tasks, from captioning images to stacking blocks with robotic arms.

“Most current AI systems work on a single task or narrow domain at a time,” co-creator Scott Reed tells TechCrunch. “The significance of this work is mainly that one agent with one [model] can do hundreds of very different tasks, including to control a real robot and do basic captioning and chat.”

serve robot with uber eats branding

Serve Robotics is partnering with Uber Eats on an autonomous delivery pilot in Los Angeles. Image Credits: Uber

Uber Eats this week announced a pair of deals to pilot last-mile delivery in the Los Angeles area. The partners are autonomous driving company Motional and Serve Robotics, an Uber spinout that makes sidewalk delivery robots.

“We’ll be able to learn from both of those pilots what customers actually want, what merchants actually want and what makes sense for delivery as we start to integrate our platform with AV companies,” an Uber Eats spokesperson told TechCrunch. “The hope is that they’re successful and that we learn over the coming months, and then figure out how to scale.”

The companies will start with a select number of merchants, with Serve handling shorter trips to West Hollywood and Motional traveling out to Santa Monica, hungry and hollow for all the things you took away.

Some notes from investors this week about the construction space and the role robotics and automation will play in shaping the industry, going forward. Here’s PSP Growth Managing Director Momei Qu:

In the long run (five to 10 years), there will be game-changing innovations around new materials, automation techniques and robotics that could fundamentally change how things are built and create a better, safer environment for those in the industry, which will hopefully also help with the labor shortage. I often look out my window at construction sites and think: ‘Humans should not be doing that.’

Image Credits: AMD

Last week we discussed how Qualcomm is aggressively pushing into the robotics development space alongside companies like Nvidia. Now it’s AMD’s turn, with the announcement of the new Kria KR260 Robotics Starter Kit. Says senior director, Chetan Khona, “Roboticists will now be able to work in their standard development environment on a platform that has all the interfaces and capabilities needed to be up and running in less than an hour. The KR260 Starter Kit is an ideal platform to accelerate robotics innovation and easily take ideas to production at scale.”

The system is available now, priced at $349.

Image Credits: Bryce Durbin/TechCrunch

For more on the ups and downs of robotics investing, subscribe to Actuator. 

Top three takeaways from Nuro’s session at TC Sessions: Mobility

Jiajun Zhu, co-founder and CEO of autonomous robot company Nuro, joined TechCrunch onstage during TC Sessions: Mobility on Wednesday to discuss how the startup aims to revolutionize commercial autonomous delivery.

The company is most well-known for its cute self-driving delivery vehicles, which operate on roads, not sidewalks, and are purpose-built to carry pizzas and packages rather than people. Nuro recently unveiled its third generation electric delivery robot, the Nuro, which it’s building at a new $40 million manufacturing facility and closed-course test track in southern Nevada.

Nuro, which has raised more than $2.13 billion since its founding in 2016, has locked down a range of commercial partners, like Domino’s, Kroger, FedEx and 7 Eleven, and is operating and testing in multiple states.

TechCrunch managing editor Matt Burns sat down with Zhu to talk about Nuro’s path to commercialization, the opportunities and challenges of AV delivery and where the industry, and Nuro, is headed.

Here are three key takeaways from their discussion.

Zhu hints that LA might be Nuro’s next market

Nuro is currently operating and testing in California, Arizona and Texas, with a focus on Houston and the San Francisco Bay Area as the company’s initial markets, according to Zhu. When asked which markets the startup is targeting next, Zhu said Nuro might make an announcement about that soon, but something tells us Los Angeles might be the nearest target.

“We recently announced that we are also doing data collection and mapping in LA,” said Zhu on Wednesday. “Our focus right now is just trying to make the service really, really good and make our customer happy and super excited in our existing markets.”

Nuro announced that it had begun mapping in LA in April, saying in a Medium post that the company would soon begin autonomous vehicle testing in the region using its fleet of Toyota Prius vehicles.

“Over the next few months, Angelenos can expect to see Nuro’s vehicles on public roads, and later this year, we’ll begin testing autonomous driving in specific neighborhoods throughout LA County,” the company said in the post. “While we are not fully deployed in LA, the Nuro vehicles residents may see are laying the foundation for our autonomous delivery service.”

Don’t get attached to the idea of Nuro as a delivery company

“Nuro is really a robotics company,” said Zhu. “We don’t see Nuro as a delivery company or a self-driving car company. Our mission is to better everyday lives through robotics.”

When Dave Ferguson, Nuro’s president and co-founder, and Zhu founded Nuro, it was with the conviction that within 20 years, robots will be everywhere, helping people to have a better life. Choosing to focus on delivery was less about the feeling that delivery was the most important avenue, and more that it would simply be one of the first.

“We looked at all these different verticals and asked ourselves, which one is going to have the biggest impact on a lot of people?” said Zhu. “We have this unique expertise and competence that we can build something that is better than other companies, potentially. Which product can have that impact in a reasonable timeline, not 10 years from now, but something that we can see and a use for in a reasonable timeline?”

For the time being, the market opportunity for transporting goods across various retail verticals allows for Nuro to be an actual business, not just a science experiment. Zhu said Americans take up to 100 billion trips every year for shopping and running errands. Automating that can potentially be a huge time saver for a lot of people. But Nuro hasn’t ruled out other ways to save people time — Zhu said he’s particularly interested in home robots.

“I really want a robot that can fold my laundry in the future,” he said.

The benefits of partnering with auto OEMs on robots

Nuro has partnered with BYD North America on its newest generation delivery robot, and Zhu said it’s designed for manufacturing.

“It is, we believe, the first vehicle that is automotive quality, that will be mass manufactured,” said Zhu. “It has much bigger cargo space based on all the feedback and input that we learned [from previous iterations].”

As Nuro works on getting its self-driving tech up to speed, being able to manufacture vehicles with the backing of a major automaker is critical to scaling and becoming profitable.

Another benefit is being able to include automotive-grade speed and safety features. The Nuro can drive up to 45 miles per hour, which gives it plenty of geographic coverage but eliminates the need to drive on the freeway. It also has safety features like an airbag in the front of the vehicle, rather than on the inside, so it can protect vulnerable road users like pedestrians and cyclists. The Nuro also has active heating and cooling so it can deliver a hot pizza and a cold beer at the same time, said Zhu.

Wingcopter details plans to deploy 12,000 drones across Africa

Wingcopter this week announced a partnership with Continental Drones designed to establish a massive delivery network spanning 49 countries across Sub-Saharan Africa. The deal sets the lofty goal of deploying 12,000 of Wingcopter’s 198 drone systems over the course of the next 5 years.

Drone delivery has largely been a non-starter for a number of companies, including Amazon. While others, like Alphabet’s Wing, have seen some success in limited markets, plenty of questions remain around efficacy, congestion and regulation, among others. We’ve long suggested that such technologies might make more sense in remote areas, where traditional infrastructural issues present real barriers for delivery.

Various locales in Africa certainly make sense for such a rollout, with drones potentially offering faster access to important resources, including vaccines, medicines, lab samples and other key medical supplies. The company has already partnered with hospitals in the U.S. and Malawi, and is planning to expand into different delivery categories, such as food.

Image Credits: Wingcopter

“With the looming food crisis on the African continent triggered by the war in Ukraine, we see great potential and strong social impact that drone-delivery networks can bring to people in all the countries in Sub-Saharan Africa by getting food to where it is needed most,” CEO Tom Plümmer told TechCrunch. “Especially in remote areas with weak infrastructure and those areas that are additionally affected by droughts and other plagues, Wingcopter’s delivery drones will build an air bridge and provide food from the sky on a winch to exactly where it is needed.”

Wingcopter was founded in 2017 by Plümmer, Jonathan Hesselbarth and Ansgar Kadura — a trio of then-university students. Early last year, the previously bootstrapped company announced a $22 million Series A, led by Silicon Valley VC Xplorer Capital. The startup’s primary offering is the Wingcopter 198, a large fixed-winged drone capable of transporting 13 pounds of payload up to 68 miles. The system can drop three individual packages, making it possible to perform multiple deliveries in a single flight.

The drones are controlled remotely by pilots who can monitor and fly up to 10 systems at once. Emissions are the other big selling point here, with the electric systems offering more efficiency than traditional ground transportation.

“The first fleets of Wingcopter delivery drones will be delivered in Q1 2023. Continental Drones’ parent company, Atlantic Trust Holding, has been present on the African continent for more than 20 years and can count on extensive business experience and intimate knowledge of local challenges,” said Plümmer. “Wingcopter will act as the drone technology provider and support Continental Drones who will be the distributor of Wingcopter‘s delivery drones.”

Investors discuss how labor shortage is shaking up the construction tech stack

Construction as an industry has evolved with civilization through the ages. But today, it’s one of the few industries that have one foot firmly planted in the past, even as the other tries to step into the future. Construction’s digital transformation journey is only just beginning, and the sector offers a ton of space for innovation.

To get a clear picture of where construction tech stands today, we spoke with five active investors in the space. And the overall consensus seems to be that the pandemic was a big boost to innovation as stakeholders realized the need for the ability to observe and direct work remotely.

“Due to the pandemic, many contech workers were unable to freely visit their job sites and realized they had less visibility than they’d like into what was happening onsite. For an industry that has historically been averse to tech, feeling this pain point was a real catalyst for adoption. Across segments, we’ve seen field workers become more open to exploring digital platforms and to the ROI they can deliver to projects,” said Nikitas Koutouples, managing director at Insight Partners.

The pandemic wasn’t the only challenge to hit the construction industry. The rising cost of raw materials coupled with a major labor shortage has left the industry scrambling for solutions to bridge these gaps.

According to Sungjoon Cho, general partner at D20 Capital, the usage of technology will be critical to counterbalance labor shortages. “Software tools are needed to increase efficiency, transparency, and accountability,” he said. “Robotics are needed to automate dangerous and repetitive tasks. And creative solutions are needed to ensure construction projects have access to the right talent at the right time. Although the concept of remote work is still a novel idea in the construction industry, we believe that opening up certain jobs to remote talent will open the door to increased efficiency and a broader talent pool — as we have seen in many other industries.”

Some of the investors we spoke to see more scope in commercial construction, while others favor residential housing. All the investors, however, did agree that the sector’s biggest developments lie in automation, data collection and data analysis.

For Suzanne Fletcher, venture partner at Prime Movers Lab, automation is the obvious solution to the labor shortage issue. “Automating new home construction is going to have an enormous impact on the production housing industry. For example, Diamond Age’s robotics-as-a-Service system combines 3D printing, mechatronics, and robotics to backfill the massive labor shortage and drive construction cycle times down,” she said.

Momei Qu, managing director at PSP Growth, believes the sector will adopt more tech in the next five to ten years: “In the long run (five to ten years), there will be game-changing innovations around new materials, automation techniques, and robotics that could fundamentally change how things are built and create a better, safer environment for those in the industry, which will hopefully also help with the labor shortage. I often look out my window at construction sites and think: “Humans should not be doing that.”

Governments and legislation do have a role to play in helping modernize the construction industry as well. The Infrastructure Investments and Jobs Act passed this year in the U.S. is expected to be beneficial to innovation in the industry.

But Heinrich Gröller, partner at Speedinvest, feels governments will need to get more involved to ensure that the construction industry heads in the right direction, especially in terms of environmental impact.

“Governments, not only in the U.S. but also in Germany, for example, will play a huge role,” he said. “There is a massive backlog in infrastructure investments that now need to be pushed forward, which will trigger massive investments. There is a clear tendency to make building information modeling compulsory for public construction projects. And there will be continued and growing pressure from governments to measure and minimize environmental impact and carbon footprint going forward — be it with recycling quotas or carbon emission targets. All of the above will create new tech solutions and enable many existing ones to finally take off.”

Read the full survey for more in-depth answers by these investors’ about the the opportunities and issues in construction tech. They also discuss the investments that they’re interested in making in construction tech, as well as the best way to approach them.

5 construction tech investors analyze 2022 trends and opportunities

Often, industries that have great potential to be disrupted are also the most resistant to adopting bleeding-edge technology. While legacy sectors like transportation and energy have embraced new tech, innovation in the construction industry has been slow to take hold.

Even though many large construction firms manage internal R&D units, more than a third of employees say they’re reluctant to adopt new technology. “This is a structural problem of the industry, as there are fairly low margins and everything is project-based,” said Heinrich Gröller, a partner at Speedinvest. “It is difficult to find a project manager who is willing to take the risk to implement bleeding-edge tech on their project.”

All the investors we spoke to agreed that finding workers is one of the biggest challenges in the industry, but the pinch isn’t limited to job sites. Due to the Great Resignation and restrictions to immigration laws, “this labor shortage affects both blue-collar and white-collar labor,” said Sungjoon Cho, partner at D20 Capital. “We recently heard of a major construction company’s regional office that lost around 10% of their white collar workers last year alone to employees leaving the construction industry altogether!”

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Even so, investors are backing startups bringing robotics, data management, automation and augmented reality into the construction process. With the industry representing about 6.3% of the U.S. GDP, the market opportunity is huge, especially as spending climbs — the U.S. construction industry saw spending reach an all-time high of $1.57 trillion last year, according to a recent Deloitte study.

The U.S. government wants to help boost innovation in this crucial sector, too. Its recently enacted $1.2 trillion Infrastructure Investment and Jobs Act includes only $100 million for digital construction technologies, but if new tech is used in public infrastructure projects, it could prove a boon for the industry.

To better understand the market forces driving this sector and learn about the opportunities they’re seeking, we spoke to five active investors:

Nikitas Koutoupes, managing director, Insight Partners

What’s the most exciting development in construction tech right now? Where are you seeing more interest from investors and founders — residential or commercial?

We are excited about how the industry is shifting its mindset from simply digitizing workflows to transforming how projects get built using insights, automation, and AI. Every important builder is exploring how these new technologies will drive productivity on the job site.

At this point, we’re seeing more interest in commercial projects. In large commercial projects, there are so many places where delays and other issues can pop up, so new technology providers can drive serious ROI by improving workflows.

Given the large scope and budgets of these projects, being more efficient can save a lot of money, and owners and general contractors (GCs) are willing to pay for innovative technology. What excites us about the timing now is, it seems GCs and owners are willing to adopt and pay like they haven’t before.

Where are you looking for opportunities in construction tech in Q3 2022?

We’re interested in investing across the entire construction lifecycle – from pre-construction tools like scheduling and bidding, to job site tools, including progress tracking and data + analytics to drive efficiency.

Given the flexibility of Insight’s platform, we’re able to partner across all stages — from seed to late-stage growth — so are looking to partner with interesting startups addressing the industry’s challenges at any stage in their growth journey.

In large commercial projects, there are so many places where delays and other issues can pop up, so new technology providers can drive serious ROI by improving workflows. Nikitas Koutoupes, MD, Insight Partners

Despite the current market conditions, we intend to stay quite active in Q3. We don’t think the long-term outlook on construction tech has changed, and have several high priority segments that we’re eager to make investments in.

For example, we haven’t yet partnered with any companies in robotics, procurement and finance, and labor management, but we’re seeing a lot of interesting early players emerge. We plan to stay true to our strategy and will continue to invest across a very wide range of stages.

How has this space changed since the pandemic began? How mature is the sector; are these still early days?

We’ve seen COVID as a tailwind for the construction tech industry. Due to the pandemic, many contech workers were unable to freely visit their job sites, and realized they had less visibility than they’d like into what was happening onsite. For an industry that has historically been averse to tech, feeling this pain point was a real catalyst for adoption.

Across segments, we’ve seen field workers become more open to exploring digital platforms and to the ROI they can deliver to projects.

We think construction tech is still in its early innings. In the last few years, Procore and Autodesk have shown that the industry is ready to adopt software and capable of building big public tech outcomes, but there are still so many workflows left to be addressed. It’s an exciting time to investing in construction tech.

A lot of this tech is focused on job sites, but given the need for data collection and analysis, what advances are you seeing in back-end technologies? Is there a killer app?

One of our portfolio companies, Versatile, is a great example of using job site data collection to drive actionable insights for GCs. Versatile is at its core a data science company, not just a data collection tool. Data collection from the perspective of the crane is Versatile’s wedge into getting structured data at a job site.

From there, they’re able to generate powerful insights into efficiency. So while there is a strong need for data collection, the real winners will be the companies that have a strong back-end to provide actionable insights from all this data.

Which areas of the construction industry can tech help improve right now? Where do you see the biggest potential breakthroughs in the next five to ten years?

We see a lot of companies in the data collection and analysis space. The market is very fragmented today, but we’re very excited about the potential of all of these systems to talk to each other, and for one comprehensive suite of tools that can ingest data from all angles.

As these platforms consolidate in the next five to ten years, we’re excited to see GCs using one single source of truth for their projects, which would greatly help track progress, efficiency insights, safety measures, and more.

We’re also excited about the potential impact of cutting-edge robotics. Take layout, for example. Today, many project sites sketch out their layout using chalk and string — even for infrastructure projects that can span miles. Next-gen robotics companies are building robots to automatically print out precise models on the project floor. They’re meaningfully more accurate than the human-drawn layouts, and are much faster.

This is just one example, but it’s illustrative of the way that new technology will dramatically change the way we build for the better.

The construction industry has been fairly reluctant when it comes to adopting bleeding-edge tech. Is this a marketing problem, or a product-market fit problem?

We think a big part of why the industry is thought of as reluctant to adopt technology is because some construction tech tools have not been designed to integrate into existing construction workflows. Construction teams are first and foremost focused on project execution, and if a new tool doesn’t immediately help them execute and drive ROI, they have little bandwidth to explore it.

The other challenge is that most solutions have to be incorporated into the broader construction process. You can’t have half the team using one system and the rest using something else. The customer has to see how the change management will be seamless.

How easily tools integrate into existing construction workflows, and how quickly they can drive quantifiable ROI on a project (whether through time savings or cost savings) are two of the key things we look for in contech startups.

The $1 trillion Infrastructure Investment and Jobs Act the U.S. passed this year is expected to be a shot in the arm for construction tech. How large a role do you think governments will play in promoting construction tech via procurement, incentives, grants, subsidies, etc.?

We are hopeful that more public funding will come with mandates to use software to reduce project risk and improve job site safety. There is a direct corollary with Obamacare driving adoption on medical records.

That said, we believe buy-in on the field is essential, even if new tools are being procured by the office. It is difficult to push solutions on people, whether that’s a GC pushing it onto subs, or owners and government pushing it onto GCs — you must be able to show real value.

Are lower labor costs making construction-related automation a harder sell in some parts of the world? Conversely, in areas like the U.S., where there have been long-term labor shortages, where do you see this tech lowering costs and speeding up project timelines?

A lot of the technology is about helping keep labor coordinated, productive, and on track more than its about replacing labor shortages. Even in markets with low cost of labor, the costs of mistakes, rework and delays are all material enough that contractors care about using technology to build correctly the first time.

That said, labor shortages can be a compelling reason for customers to procure new solutions, and we see a lot of new tech companies pitch the labor shortages as a positive tailwind.

How do you advise portfolio companies to approach potential clients who don’t see an urgent need to modernize?

The construction industry is skeptical of outsiders coming in to tell them they need to change, but they also understand they have to change to keep up with competition.

We advise our companies to make sure they are showing up as true partners to the industry and emphasize how their solutions can bring reliable and demonstrable ROI. A lot of our companies find success through deep partnerships with their early pilot customers — they’ll work closely with a large GC to design a solution that directly meets the needs of the customer, and then once proven, can work towards broader rollouts (both within their pilot customers’ projects and outside).

We’ve seen this “land and expand” approach across a number of portfolio companies and prospective companies.

When investing in a construction tech startup, what green flags do you look out for? Are you open to backing founders who don’t have experience in the industry?

Warehouse robotics firm GreyOrange raises $110M via growth financing

Robotics firm GreyOrange this week announced it has raised $110 million. The funding comes four years after a $140 million Series C that brought the Atlanta-based company’s raise to $170 million. Rather than the standard fundraising round, however, GreyOrange has opted for growth financing, largely backed by Mithril Capital Management, with support from BlackRock.

“Given our track record of performance, we were in the advantageous position of strategically selecting when and how to best fuel our continued growth,” Samay Kohli said of the decision to go through growth financing versus a more traditional fundraising round. “We chose a mix of equity and debt financing as the most effective structure for our growth plans and serving our customers.

The news follows reports from last year that the firm was looking to raise $500-600 million by way of an IPO. For now, however, the public listing has yet to materialize, so it seems to have gone back to the drawing board to raise additional capital.

“Success for us looks like solving big challenges in fulfillment for as many customers as possible globally,” Kohli tells TechCrunch. “We’re firmly focused on how we can deliver on surging demand from our customers as quickly and efficiently as possible. An IPO is certainly a viable option to make that happen in the future.”

Given the huge sums of money currently floating around in robotics, the timing certainly would have been right. Berkshire Grey, which operates in the same category, went public via SPAC last year — though share prices have since taken a massive hit.

GreyOrange, which specializes in warehouse/logistics robotics, was formed in India back in 2015. The company tells TechCrunch that it moved operations to Atlanta, Georgia three years later. There’s still plenty of growth left in the category, as more retailers search for ways to even the playing field against Amazon’s dominance. Notably, Walmart Canada announced in March that it was opening a $118 million fulfillment warehouse in Alberta outfitted with GreyOrange’s systems.

“As ecommerce sales soar, brands face a stark reality: embrace automation, or cede customers to the competition,” co-founder and CEO Samay Kohli said in a release. “We orchestrate fulfillment and optimize inventory in a complex global supply chain environment for more companies that ship millions of items each day than any other player in the market outside of Amazon.”

Much of the funding will go toward hiring, as the company looks to add an additional 300 roles in engineering, product, marketing and sales. Additional funding will go toward ramping up production and rollout of GreyOrange’s robotic systems.

Flexxbotics puts work-cell manufacturing on cloud nine

In manufacturing — and especially in the space of contract manufacturing, where production lines are reconfigured to suit the product that’s being built — we’ve seen a prevailing trend from super-specific automation robots that are custom-built to do just one thing, toward more generalized, multi-purpose robots. Flexxbotics just closed a $2.9 million round to leap into the production line, to rock its body in time (okay, I believe you).

The Boston-based company is bringing work-cell manufacturing to the cloud, with a SaaS solution aiming to improve manufacturing and the management thereof. The platform connects enterprise business systems with the manufacturing floor for increased transparency. The tool itself is a no-code platform that focuses on process control, capturing operations data and assisting with the more automated setup of individual work cells.

The company was founded by a pair of Tylers in 2018 — Tyler Bouchard wearing the CEO hat, and and Tyler Modelski with the CTO hat, presumably a fashionable baseball cap with the Flexxbotics logo embroidered on it. Flexxbotics is a spin-out from Northeastern University by ways of its IDEA program. The company launched its first set of robotic productivity tools in 2020, and today, the company claims these are used in close to 100 companies world-wide.

“Flexxbotics is focused on the mission of helping discrete manufacturing companies complete the digital transformation. These companies have struggled with the challenge of connecting ERP, MES and other modern business systems with the legacy production equipment on the shop floor,” says Bouchard. “Our vision is to change that by providing a turnkey tool kit to seamlessly connect robots, CNC machines, PLCs and other manufacturing with each other through a shop floor communications mesh.”

The Series A financing round was led by eCoast Angels. The group focuses on early-stage companies developing advanced technology solutions. According to Peter Schroer, a member of eCoast Angels, “Flexxbotics was appealing to us as investors because they are taking a novel approach to connect information from business systems directly with the devices/machines in shop floor workcells. This has long been a critical gap for manufacturing companies and we expect rapid adoption of their product in the coming months as the company rolls out its new technology.”

Dusty’s construction robots raise another $45M

Another sizeable funding round for Dusty Robotics this month. The Bay Area firm announced a $45 million Series B. The round, led by Scale Venture Partners, is a quick follow-up to last June’s $16.5 million Series A, bringing its total funding up to around $69 million, and valuing it at $250 million.

Robotics startups have largely managed to weather the slowdown in venture funding, owing in part to pandemic-fueled interest in the category. Dusty operates in the construction space, specifically, which has been an area of increased focus for automation proponents. After all, even if the economy slows down, buildings still need to go up.

We’ve highlighted the company’s primary robot — the FieldPrinter — a few times over the years. The short version is that the little Roomba-style ‘bot is designed to replace the chalk lines that construction workers manually draw to designate layout in a construction site.

FieldPrinter utilizes digital plans, which it prints directly onto the ground of the site, for a more accurate layout. Dusty says its tech is capable of reducing construction time and costly errors introduced into the process through manual transcription.

“With so little automation in the industry, it’s no wonder that 85% of projects finish over budget, contributing directly to the housing crisis,” founder and CEO Tessa Lau says in a release tied to the news. “Our robot-powered solutions automate construction’s manual workflows, increasing productivity across the industry while also creating better working conditions for skilled craftspeople.”

The system has already seen swift adoption in the U.S. The firm claims the robot laid out 25 million square feet in the first quarter alone, through deals with construction firms like DPR, Swinerton, PARIC, Performance Contracting Inc. and Southland Industries.

Along with the new round, FieldPrinter just hit its 1.0 release, making it ready for wider adoption. The release includes QR code printing, automated obstacle avoidance and real-time progress updates while printing.