When Seth Winterroth left his job at GE Ventures to assist launch Eclipse Ventures in 2015, robotics was on his thoughts. Or extra particularly, the variety of early-stage robotics startups that have been struggling to launch attributable to lack of curiosity.
“These are groups that had simply completed their postdocs at Waterloo, or CMU, or MIT, and have been beginning robotics firms, and the chorus that I frequently heard from the startups was, ‘hey, we’re having a very exhausting time elevating institutional enterprise capital,’” Winterroth informed iinfoai. “On the time in Silicon Valley, most enterprise capital was going into the very mature software layer or the applying layer of some very mature computing platforms.”
So much has modified since then.
Now, after investing in robotics startups for 10 years, Winterroth, a associate at Eclipse, mentioned the time to spend money on robotics has by no means been higher. The robotics startup market has matured and the {hardware} and software program powering these bots has gotten considerably higher — and cheaper.
Enterprise investing within the class is gaining momentum as nicely. Buyers poured $6 billion into robotics startups within the first seven months of 2025 in keeping with Crunchbase information. The information firm predicts that this 12 months’s funding totals will eclipse 2024, making it one of many solely non-AI classes to expertise a lift in funding.
Whereas one may argue that robotics is seeing a surge in investor curiosity due to AI — and it’s not incorrect to acknowledge AI’s function within the development of robotic tech — buyers who’ve centered on the class longer than the previous couple of years mentioned the business didn’t get thus far simply due to developments in AI over the previous few years.
Reaching maturation
The true catalyst for the business to start out gaining momentum really occurred again in 2013, Winterroth mentioned, when Kiva Methods, a small startup primarily based out of Massachusetts, obtained acquired by Amazon.
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“I prefer to say Kiva Methods’ acquisition was the acquisition that launched 1,000 robotic startups,” Winterroth mentioned. “Between 2011 and 2015, 2016, that actually was the case. You simply noticed various totally different new firms get began. Some like 6 River Methods, or Clearpath Robotics, have been profitable, however most weren’t. However that expertise learns and that studying compounds, and it’s introduced into the subsequent set of ventures.”
This primary wave helped entice engineers to the sector and helped firms work out product-market-fit, he mentioned.
Kira Noodleman, a associate at Bee Companions, echoed this. Noodleman informed iinfoai the final decade of trial and error helped startups work out what the market is definitely in search of with regards to robotics and automation.
Some firms, like Speedy Robotics which Noodleman backed, shut down making an attempt to determine what the market wished. These failures have helped the subsequent batch of startup founders, who now have a significantly better thought of what potential clients need from this sector.
Noodleman had an analogous expertise together with her personal investing thesis, she mentioned, which modified because the market matured.
“Lights out manufacturing assumes there are zero people within the loop, that’s simply not occurring, we proved that already again within the 2010s,” Noodleman mentioned. “Let me take a easy job, machine tending, all it’s is somebody’s hand placing one thing out and in of a machine. The purpose right here is you’ll be able to think about what number of low-hanging fruit, repetitive duties there are, like machine tending.”
Fady Saad, a normal associate at early-stage robotics-focused Cybernetix Ventures, additionally launched his agency previous to the AI growth after he seen he was spending lots of time connecting early-stage robotics firms to sources of funding throughout his time as a co-founder at MassRobotics.
Falling {hardware} prices have additionally pushed investor curiosity within the sector, Saad mentioned, noting that it’s cheaper to construct robots right now than 5 years in the past. This enables firms to have a extra viable path to scale and makes them extra engaging to potential enterprise backers.
“The price of constructing robotics has been going dramatically down,” Saad mentioned. “Advances in sensor know-how, compute, and batteries, all of that, it was the right timing to start out full-stack robotics options.”
Developments in AI aren’t hurting the business both. Whereas AI is being touted by many as the principle motive why robotics are beginning to see a rise in curiosity — alongside an Elon Musk-driven fascination with humanoid robots — it isn’t the one issue.
Saad added that whereas AI and huge language fashions might be useful for coaching robots, these LLMs are primarily skilled on on-line data whereas robots work together with the true world.
There are firms constructing fashions primarily based on that real-life information; Nvidia simply launched a brand new set of world fashions for robotic coaching in August. However Saad predicted it can take a bit longer to seize and practice robots, particularly these that can exist alongside folks, on world information.
Current day
Momentum within the business could also be beginning to swell, however that doesn’t imply each startup has discovered the very best method but. Nor are some classes inside robotics as mature as others.
Among the first few markets to undertake robotics and automation, together with manufacturing, warehousing, and development, proceed to be engaging for robotics startup backers.
For Winterroth, Saad, and Noodleman, healthcare and surgical-related robots stay a compelling space to spend money on too. Noodleman provides eldercare to that class as nicely.
“In-home help is fascinating, coming from me having checked out industrial robotics for 10 years,” Noodleman mentioned. “Manufacturing and mining, burning labor shortages, getting old populations, no people can be found at any value, even imperfect robotics are higher than nothing.”
Saad added that vertically-focused robotics firms are inclined to have entry to extra real-world and bodily information too than horizontal gamers.
One space that these VCs aren’t as enthusiastic about are humanoids or shopper — and particularly not consumer-focused humanoids.
Saad isn’t satisfied that individuals will wish to have a robotic of their home anytime quickly. He added that even non-humanoid consumer-focused robotics firms have struggled to get shoppers excited.
“The one profitable shopper robotic firm, iRobot, did not provide you with a second act,” Saad mentioned. “Pool cleansing robotic, garden mower, mopping and floor-cleaning robotic, none of those labored out for no matter motive.”
Whereas the business remains to be years away from industrial success of extra intricate robotic fashions, like humanoids, VCs are pouring extra capital into the sector. Although this curiosity is driving up the prices of offers, the surge in curiosity is a web optimistic for the business, Winterroth and Saad mentioned, because the potential buyer base for robotics startups continues to develop.
“There are sufficient examples of profitable industrial organizations, profitable robotics firms, which have grow to be a worthwhile industrial group,” Winterroth mentioned. “Ten, 15 years in the past, it was questionable whether or not or not there was going to be a big and thriving market for these kinds of options. Now, there’s lots of buyer consciousness.”
