From PitchBook, May 15:
Funding for startups in the vertical of robotics has reached record levels this year, but there are doubts as to the use cases for these machines.
Humanoid robots used to live in science fiction. Now they live in VC portfolios, and the money flowing into them is growing quickly.
The idea of robots that look, move and operate like us has captured imaginations for years, dating back to Leonardo da Vinci’s 1495 designs for a mechanical knight. Today’s robots have come a long way: they do backflips, fold laundry, and even hold a conversation.
As humanoids become more of a reality, investment has flooded into the space. More than $5 billion has been invested in humanoid startups this year, according to PitchBook data, surpassing last year’s record total.
With 1 in every 4 dollars invested in robotics going to humanoids, deals in the hundreds of millions have become the norm. China’s Robotera raised more than $200 million just over a week ago, while University of Texas spinout Apptronik pulled in $520 million earlier in the year, tripling its valuation in 12 months.
Behind the buzz, though, questions about use cases, deployment and the path to returns are proving harder to answer than the fundraising rounds might suggest.
“There’s no strong, rational reason [behind current investment levels],” Fady Saad, GP at robotics-focused VC firm Cybernetix Ventures, said. “They’re cool, but there’s a psychological attachment or obsession with them that just isn’t practical.”
So why are checks being written?
A ‘limitless’ market
Beyond the novelty of humanoids, economic factors are also spurring investment, according to Sam Baker, a deep-tech investor at Berlin-based VC firm Planet A.According to Goldman Sachs research, the cost of manufacturing a unit fell 40% from 2023 to 2024, well ahead of the 15%-20% decline expected. Cheaper components, such as motors and sensors, along with improvements in design and manufacturing processes, have brought costs down to a level an enterprise customer could reasonably expect to pay.
Cheaper humanoids mean more customers and greater penetration, especially when they arrive in homes. Morgan Stanley estimates that a humanoid model could cost as little as $15,000 by 2050, with about 10% of US households having one by then.
Furthermore, most countries face shortages in agricultural, retail and manufacturing workforces. Humanoids could, in theory, fill the gap if they become more accessible.
We’re in a classic hype cycle, but what isn’t overhyped is the fundamentals of the technology
The second driving factor, Baker says, is the economic potential of a robot with no fixed purpose and, in theory, no ceiling on what it can do....
....MUCH MORE
There you go, it can be anything you want it to be.
