Robotics VCs Look Beyond Humanoid Hype

At the moment, the robotics industry buzz all seems to be pointing in one, monolithic direction: generalist humanoids. 

But that’s just classic Silicon Valley hype. Despite the huge funding rounds and eyewatering valuations for humanoids, VCs who focus on the robotics industry tell a very different story when, one where humanoids don’t play a starring role — at least not yet. 

“My first go-to is, [robots that] do the things that humans can't do,” Duncan Turner, a partner at SOSV, told A3. “That’s where there's big opportunities at the moment. That's sort of the area that seems to be a little bit forgotten.”

Turner added that humanoids are being designed to do the same work humans are already doing, which doesn’t mean he doesn’t see a future for that industry, but rather there are things that make more sense to invest in today. 

He gave the example of Neptune Robotics, an SOSV portfolio company that builds bots to clean the underside of container ships. This job is so dangerous for humans, it largely doesn’t get done, despite the financial and environmental upside for companies that clean debris off these container ships. 

Seth Winterroth, a partner at Eclipse, is also neither a humanoid doomer nor an investor champing at the bit to back the next startup in the sector. Like Turner, he’s found himself drawn to companies building specialized robots that are now technologically viable to commercialize like surgical robots and transportation automation. 

“I’m already convinced those systems are ready for primetime,” Winterroth said. “It's just a deployment distribution challenge. How do you improve the human economics of these solutions?”

Juan Pable Soulier, a partner at Prelude Ventures, shares Winterroth’s excitement about transportation automation as a veteran of companies including Tesla, Waymo and Rivian.

Soulier is also getting increasingly curious about the companies building tech that could help give the whole industry a boost on both the hardware and software sides. Prelude recently backed Rhoda AI, which builds foundational models for robots, and can see how more investments in these physical AI building blocks would be attractive. 

“We recognize that it is a nascent space, and from that perspective, there are all these different elements that come into play in this stack that haven't really been fully invented, fully developed, or fully solved,” Soulier said. “We recognize that there could be enablers for addressing markets, much bigger markets from a technological standpoint, that could boost this sort of first generation of startups.”

This strategy is top of mind to Turner, too. He said SOSV is interested in backing startups like semiconductor and sensor companies, as that underlying tech makes for more attractive investing opportunities down the line. 

“We've had a lot of people excited about the space [and] we're on an existing technology stack,” Turner said. “What's the next technology stack that enables this to go 10x better than where it is at the moment? There's also a whole load of sensing technologies that are very interesting. There's actuator technology as well.”

For VCs like Winterroth and Turner that have been investing in the space for a long time, their investment thesis has changed alongside the advancement in automation tech. This mindset is why neither of them are writing off humanoids, even if they don’t feel a strong pull to that sector right now. 

“There's some pretty incredible engineering work on software inside many of these companies, and I don't think they should be written off or taken for granted, by any stretch,” Winterroth said. “And that's awesome, that's really, that's really exciting. It's a really hard set of problems, and so I'm eager to see where it goes.”