Secure Funding as a Robotics Startup in 2022: A Primer

by sirisha

April 19, 2022

Not every robotics company has sound financial stamina to start off to be able to invite plum investments.

People invest in people and not in ideas unless they are backed by proof of competency. The recent example of Reliance acquiring Addverb technologies for $132million acts as the perfect case study for robotics companies who are looking for funding. Adverb, an e-commerce company is basically acquired for its functionality. Founded in 2016, has significant work experience in making robots for e-commerce, and highly automated warehouses. As not every robotics company has sound financial stamina to start off to be able to invite plum investments – not to talk about the different stages of investments such as angel investment, pre-seed, and seed investment, venture series, etc which make circuitous processes in themselves – robotics companies need to align to certain pre-requisites to attract proper funding.


Decide on the type of funding your business requires:

Do not indulge with Venture Capitalists when you lack clarity as to what your company’s goals are, i.e., if you are looking for a short-term investment or want to exit the company after gaining certain traction.  Venture capital firms do not generally engage in companies that do not have a goal or lack the potential to scale exponentially. They invest in companies with a high stake and high risk, which is hardly the case with start-up companies. For sure, no capital investor would be looking for a $ 100 venture only to make an exit after spending a considerable amount of time. They definitely look for at least 10 times the investment as exit valuation. While venture capitalists look for larger companies that are like rockets to put fuel into, angel investors might be more suitable for start-ups. Therefore, it is imperative to zero in on what the company’s goals are along with charting out its path for the coming few years.


Build a dependable team:

As the saying goes, the first 10 members of your team are the 10 musketeers of the business. It holds significance particularly when you are a start-up with a team with who you literally live in for the most part of the day. Robotics startups are easy to set up with cheap components, open-source code, and accessible options for contract manufacturing. However, assembling an able and flexible team always remains the trickiest part. The company’s ability to hire talent is considered a benchmark for its potential in reaping proportional ROI. Therefore, building a team that is flexible yet reliable, which counts among the first factors an investor is very likely to consider. Indeed, there are options like hiring experts or experienced people but it all boils down to the company’s requirements with respect to the established goals.


Product awareness is as important as the product:

Robotics is quite a new domain and there is the possibility that founders don’t have enough marketing experience in promoting their products. The success with a product design is mistaken for its overall success, a blind spot entrepreneurs should steer clear off. The founding CEOs mostly are engineers, developers, or inventors who have little knowledge of marketing and its nuances. If not a team, bring in the data science and artificial intelligence tools into the workflow. With a well-placed marketing strategy, the investors would definitely find the product prospective. By identifying the factors which stand out, your company can pitch the product as a differentiator.  “RoboBusiness is where strategies are created, partnerships are formed, new products are unveiled, and big ideas are dreamed up,” said Steve Crowe, co-chair of RoboBusiness and managing editor of Robotics Trends. Having said that, it is also important to make sure you do not take your marketing efforts into unwanted areas just to seek the attention of the investor.


Where to look for money:

Now that all pre-requisites are fulfilled, the all-important question arises: Where to go to seek robotic funding? The answer is not simple unless you have a bellicose investor who just wants to experiment with money. If you cannot find a channel to raise funds in the very happening digital world, it is only you who should be held accountable. From offline channels like Government grants and sponsorships to online methods of generating sales pitches using good storytelling techniques such as crowdfunding, there are enough options to choose from for your specific product. The very fact that investments in robotics have recorded a 17% annual growth rate in the USA tripling to $922 million in just one year speaks volumes about the picture robotics paints as an industry in the minds of investors. All that they need is a working or unique application managed by an able team. How much are you prepared for the exciting ride?


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