Rising energy prices are driving up demand for robotics startups

Europe’s robotics sector is picking up speed despite the market downturn. Investment into European robotics startups is on track to keep up with 2021’s record high, while investment in robotics in China and the US has plummeted. To get more news about Robots on Demand, you can visit glprobotics.com official website.

“There has never been a better time to found a robotics startup,” says Alex Rohregger, robotics specialist at German VC firm Picus Capital.

With the looming threat of a recession and with energy costs at record highs, the industrial sector needs automation more than ever to reduce costs and fill gaps in industries with a shortage of highly skilled workers.

Industry players are taking note. “The automation market that we are part of is growing fast. Customers are now considering robotics solutions to automate their pipelines,” says Thomas Genestar, managing director of western Europe at French robotics unicorn Exotec.

Investors have picked up on this growing demand and are pouring money into robotics startups across Europe. Let’s have a look at the numbers.Over the past four years, the robotics sector in Europe has been growing rapidly, with a 24% CAGR (compound annual growth rate) in the period between January and September. The US and China have stalled, with growth down 1% in the US and up by just 3% in China.

Investment in European robotics companies reached $1.45bn by the end of September 2021, and this year it has already hit $1.2bn.

Behind this growth is a network of universities across Europe with strong robotics departments, says Picus Capital founder and managing director Robin Godenrath. They include TU Munich in Germany, ETH in Switzerland, Imperial College and Oxford University in the UK and KTH in Sweden.

The switch has flipped
Most of the growth in European robotics happened in the last two to three years. Once a niche sector that even VCs didn’t understand, robotics is now attracting more generalist investors.

One such example is Goldman Sachs, which led the largest round in the European robotics sector this year so far — Exotec’s $335m Series D round in January this year.Genestar says he saw the switch flip in the past year. “Investors now understand the sector and its benefits much better,” he tells Sifted.

Exotec makes robots that automate warehouse storage. The demand for automation in the logistics industry allowed the company to double its revenues in 2021, despite the pandemic.

“Three years ago customers thought that robotics couldn’t compete, but they are now considering robotics as a solution for their automation projects,” says Genestar. Any uncertainty that customers are feeling as a result of the economic downturn are an advantage for companies like Exotec, he argues.

“With robotics a customer can invest in what they need now and increase investment little by little as they grow,” Genestar says. An uncertain future makes this option much more enticing, as opposed to investing in resources several years ahead based on unreliable growth predictions.

In addition, robotics solutions can reduce a warehouse’s electricity consumption by three to five times, Genestar claims.“Even traditional actors in the storage market, like SSI Schaeffer and Dematic, are now providing robotics solutions. It’s not just startups anymore.”