A Look at Robotics
A brief on the robotics industry and its competitive landscape through Clearpath Robotics, a startup.
This is a stripped down, shortened version of my case study on a portfolio company. In no way are there any affiliations with Clearpath Robotics or its team. (Originally published on March/20/2017)
About Clearpath:
Clearpath Robotics has come a long way since its founders: 4 ambitious Waterloo students, discovered their passion to “build robots for the greater good.”
Since 2009, Clearpath Robotics has led a movement in implementing intelligent robots that can perform dangerous tasks to mitigate human danger. Clearpath’s self-driving vehicles are an unparalleled automation technology that has potential beyond industrial purposes such as agriculture and mining. Currently, Clearpath’s robotic solutions within its hardware, software, and services are integrated in the daily processes of over 500 global brands.
“Clearpath’s ultimate goal is to remove humans from fulfillment centers altogether. The long-term vision, is for a manufacturing or fulfillment facility where you can literally shut the lights off because everything is automated.”
- Simon Drexler, Clearpath’s Director of Industrial Systems
Outlining Clearpath’s 3 distinct pillars: AI advancement, robotic autonomy and industrial automation, they will be examined at a later time.
Robotics Industry:
The Robotics field is a surging market with high growth potential. Robotics is a standalone multi-billion global market that is capable of shifting into new industries beyond industrial settings, where their modern technology remains highly applicable and in demand.
According to current trends, the market value of robotics is expected to reach $41 billion by 2020, with a specific $1.5 billion growth for Robotics expanding to a B2C model. This aligns with the possibility of startups such as Clearpath expanding outside of only businesses as their sole client base.
Below if a visualization of the data over a 12 year period (2002–2014) to represent the tremendous growth within the industry in terms of the number of units purchased.
Furthermore, the projected future market for robotics will be driven by two main sectors: industrial and services. It is evident that the robotics industry will only continue to expand rapidly, scaling itself at a global level. Most notably, there is greater market entry opportunity in the coming years within the services sector for companies to implement robots in higher educated roles such as customer service.
Global Markets:
Currently, Asia leads as the greatest spender on robotics, accounting for more than 65% of the total global market. Furthermore, it is predicted that their spending will double by the year of 2019, indicating an incredible growth but also a huge market opportunity for companies such as Clearpath to explore in terms of expansion options for the near future.
It is a widely known fact that China produces almost half the entire world’s goods. In fact, China’s imports are only 35% of its exports, which recently increased to 43.1% in 2013. As wages rise in China, many big companies have chosen to outsource their production to lower-cost countries such as the Philippines instead. With the promising dominance of China as a manufacturing world factory, its need to decrease labour, in addition to its strong robotics market opportunity, China appears to be the next successful expansion location for products such as Clearpath’s Otto.
Taking on a different perspective, Clearpath is still considered as a much smaller startup in comparison to other large international robotic companies. As their team and inventory is smaller, a new business environment may do them more harm than good as it will bring a significant amount of new expenses and a sudden increase of hardware demand that Clearpath would not be able to satisfy. Given their current company landscape, it might be easier for them to stay within the Canadian borders for now.
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Edit: Geek+, a 1.5-year-old, Beijing, China-based company that’s building robots for warehouses (similar to Amazon’s Kiva robots), has raised $14 million in Series A this week.
Clearpath’s Competitors:
To analyze Clearpath’s unique position and examine strong market players, we must revisit the 3 pillars mentioned earlier. Which key competitors are innovating within the same playing field and focused on creating a line of soldiers that are autonomous, intelligent and efficient?
Notable competitors include Fetch Robotics: a recent Valley startup aiming to increase productivity through autonomous robotics solutions through its flagship product Freight, Seegrid Corp: an innovator of 3D vision navigation with hopes to transform the next generation of vision and automated guided vehicles, Rethink Robotics: a creator of flexible and versatile robots that can perform the most intricate tasks with the utmost precision on the factory floor and Universal Robots: a specialized robots-arm producer for task-heavy processes.
Albeit the challenging and ever-increasing competitors Clearpath faces, the startup has a holistic value proposition that cannot be easily surpassed by others. Not only does Clearpath’s infrastructure allow for easy enterprise integration, immediate implementation and a seamless overall experience, but Clearpath’s dedication to superior customer service have helped extensively in making their name in the community.
Clearpath’s Future Outlook:
Examining Partnerships
1. Geographic Expansion
As previously suggested as a potential expansion strategy, Clearpath does not have the advantage given their lack in size when it comes to approaching the global market. However, some strong players within the robotics industry do, and future partnerships could help Clearpath shore up this weakness.
Grenzebach, is a German company that has been operating as a family-owned business for decades. Focused on industrial automation, their mobility device Carry is programmed to handle material transporting tasks. With brands utilizing their technology extensively in Europe and Asia, Grenzebach is still far from dominating North America as they’ve only entered one country (US). With Grenzebach’s 3000 worldwide plants and facilities in Germany, US and Asia, a future partnership with Clearpath would be beneficial from both ends. By partnering with Grenzebach, Clearpath has the ability to easily expand into our neighbours, the States, in addition to the Asian markets due to Grenzebach’s physical facilities. For Grenzebach, Clearpath is the leading robotics startup within Canada that has a promising research team who can innovate faster than the typical large company. Moreover, Grenzebach can finally cover all grounds of North America by entering the Canadian markets with Clearpath’s help.
2. Industry Expansion
Another way to look at potential partnerships is by examining industry expansion opportunities. According to McKinsey & Company, there is a projected economic impact of up to $4.5 trillion by 2025 for the market of advanced robotics across sectors such as health care, services and manufacturing.
“Even a small slice of that pie would mean billions for the privately held Clearpath, which has seen its partnerships drive revenue growth of 200 percent year over year since 2010.”
Given this, Clearpath could explore the option of partnering with leading health institutions that are large in size but don’t necessarily have the manpower or time to invent advanced robotic technology themselves. The hospitals would benefit through integrating Clearpath as numerous procedures would become more efficient. Similarly, this would be an ideal partnership for Clearpath as they could expand their products over to healthcare, collect valuable first-hand data for improvement AND potentially cross borders if the health institution is an international one.
Examining Acquisitions
1. Larger Company Acquisition
In 2012, a robotics company dedicated to making automated robots for shipping centres, was acquired by Amazon under a whopping $775 million deal that gave them exclusive rights to all their research and development. Kiva Systems, is now known as Amazon Robotics and only used within Amazon’s own factories.
Larger companies are only starting to catch up to Bezos’s stride as they recently noticed the positive correlation and immense growth between robotics and manufacturing. Countless new investments were made by large companies such as IBM and Microsoft who put their money in for robotics startups.
In 2015, GE Ventures publicized its role as a strategic long-term investor in Clearpath Robotics.
“We believe robotics will drastically improve the industries that GE serves,”
- Ralph Taylor-Smith, Managing Director of GE Ventures.
This reflects the future direction of GE. As GE takes a keen interest in autonomous robots, Clearpath provides innovation they hope to deliver within their own services, making GE a potential acquirer of Clearpath in a deal similar to Amazon’s.
2. Expansion Acquisition
Making a reference back to Clearpath’s smaller size at its current state, they may be more vulnerable to changing markets and less prepared for new competition. Especially with differences in cultural dimensions and factory procedures. Clearpath could automatically waive this concern through an acquisition by a larger foreign robotics company. Furthermore, a larger company would be very interested in pursuing Clearpath’s unique and advanced innovations by introducing it to their foreign (and perhaps, untapped) market.
ABB Group, is an automation company headquartered in Switzerland tacking problems in utility, transportation and industrial settings through the power of automation and robotics. YuMi, a dual-arm robot created by ABB 2 years ago was the world’s first collaborative robot that encouraged human and machine interactions. Not only is this identical to one of Clearpath’s goals, but getting acquired would be greatly beneficial in terms of expansion to new industries and countries.
Conclusion:
To conclude, Clearpath is creating unbelievable inventions under the pillars of artificial intelligence, fully autonomous robots and industrial automation, all the while accomplishing their mission of cultivating a forward-thinking, productive and safe work environment through their modern applications. Based on my brief analysis of the current competitive landscape for Clearpath, their greatest strengths are: providing comprehensive infrastructure systems along with highly advanced technological innovations that are in great demand from the global robotics market. Clearpath Robotics is one example of a fast-growing startup with the potential to expand geographically and enter new industries with help from partnerships such as Grenzebach, or from getting acquired by a larger company such as GE.
As research deepens within AI development and we continue to strive towards replicating human intelligence or higher, the robotics industry is an upcoming giant we must be excited about, yet wary of, at the same time.
Thanks for reading! I’ve never delved into robotics before and after this, I’ll probably go back to being a software fanatic again.
Here’s a piece from me last month:
Let’s connect! :)
