
Robots for Humans
pitch_v1_importSee something off about this company?
Company Summary: Apptronik is a general purpose robotics company building machines to expand the human labor market. Their robotics stack offers the hardware, electronics and software for highly scalable fleets that can be deployed within a workforce. As a result, companies can access a group of mobile, articulate robots that operate in an open environment. Apptronik’s robotic stack uses the same core technology to produce robotic arms, humanoids and exoskeletons, each powered with advanced learning capabilities that adapt to a myriad of different working conditions. The Apptronik robots can be further specialized through third-party app developers, ensuring even broader labor applications. Companies can contract robotic labor as working capital, through a Robotics-as-a-Service model rather than making a significant upfront capex investment. In effect, it’s similar to hiring human labor. Companies can fill labor shortages caused by limited worker supply and dangerous working conditions. Depending on the job requirements, the company can employ durable arms for heavy object manipulation, exoskeletons for supplementing a workforce’s physical strength or outright humanoid robots to fill open positions. The main market for Apptronik is commercial labor but the path to critical scale adoption requires significant research and development plus high volume production to achieve a competitive long term cost per robotic labor hour. Apptronik has built the business around three different customer groups in order to fund early tests and scale up deployment. Early projects are done through their Labs unit, building one-off projects for universities or research groups that allow Apptronik to prototype and test while still monetizing the work. Their Defense unit has partnered with the US Army and several other cost-insensitive departments of the US military to fund scale up deployments. Together both units can set the Commercial business up for mass production at low cost pricing. Market Overview: Apptronik’s market is labor. There are currently over 10M unfilled job openings in the US with over 2M in supply chain and another 5M across a variety of service industries. Despite sustained hourly wage growth, companies are having difficulty attracting talent. Many of these roles are dangerous, monotonous or otherwise not cost competitive to fill. The three most immediate markets Apptronik plans to go after are: Logistics This is a $38B market with over 1.2M employed, paid on average $21/hr. Managing warehouse inventories, sorting packages and moving heavy, odd shaped objects are not well suited for humans. Their robotic arms are designed for repetitive sorting and heavy lifting without getting tired. This is especially true with explosive materials like the mortar shells and ammo that the US Army loads into their resupply trucks. Additionally, exoskeleton frames can supplement human strength, allowing a human to carry heavy objects a far distance without inducing extreme stress on the body. Construction $310B market with over 7.2M employed, paid on average $32/hr. Chronic lack of specialized skills like electricians and plumbers on job sites have created large project delays. Dangerous working conditions with exposed metal, risks of falling objects and heavy construction equipment posing risk of bodily injury or death all command wage premiums on top of a shortage of laborers. Humanoid robots can be trained to handle different specialized tasks on a construction site and fill the missing roles, all without risking human life on a dangerous job site. Additionally, exoskeletons can supplement the humans on site, allowing heavy objects to safely be moved around and reduce the likelihood of a fall. Manufacturing $486B market with 8.4M employed, paid on average $29/hr Tasks are often repetitive and done in uncomfortable working conditions that can be hot, toxic or expose workers to risks of electric shock. Large gaps in labor participation have contributed to manufacturing shortages and delays. Humanoid robots and arms can fill missing roles and handle these dangerous working conditions. They also see two additional opportunities long term: Medical - A $771B market with 17.3M employed, paid on average $26/hr. Food - A $181B market with 10M employed, paid on average $18/hr Team and Relationship with Capital Factory: The current CEO of the company (Jeff Cardenas) was a founder for a prior Capital Factory portfolio company that didn’t work out. He knew the Apptronik founders through mutual University of Texas affiliations and joined the company as co-founder and head of strategy and business development. From mid-2019 through most of 2021, Nick Paine (founder, inventor) served as CEO. In late 2021, Jeff took over as CEO to better reflect the transition of the company from a research company to one preparing for commercial launch of multiple products and the associated sales, marketing and business development efforts. In September 2018, Capital Factory engaged the team through our Partners Fund, the advisory model we run to help startups meet investors, customers and talent. That engagement led to multiple introductions and interactions with the US military, especially the US Army. Regular significant value was delivered from Capital Factory to Apptronik from the time they joined the portfolio. In November 2018, a Capital Factory Fund invested $200K in the company’s convertible note set on a $15M pre-money valuation. We were one of two investors in this round, the other team being Tiger 21, whom we introduced to Apptronik at Capital Factory. Largely, the company remained self funded, generating sufficient revenue from customers to require limited external investment. Several years later, in 2021, Capital Factory followed on with another $100K in a new convertible note set on a $35M pre-money cap. Additional investors in that round included robotics-focused Grit Ventures and family office Perot Jain. For the majority of our relationship with the company, our co-founder and chairman Gordon Daugherty has served, and continues to serve, on the board of Apptronik. He has been an instrumental point of access for Capital Factory and a very active advisor to the Apptronik team. He has overseen the change in CEO, multiple rounds of fundraising, and navigated the successful contracting of several million dollars in company engagements with commercial and defense contracts. Given our long history as an advisor, our access point on the board and our ongoing investment participation, we have had an unprecedented level of access and insights into the company, giving us strong confidence in the team and willingness to share this opportunity with our closest partners.
Department of Defense
Department of Defense
Department of Defense
National Aeronautics and Space Administration