Caterpillar Digs Into Robotics
What is Caterpillar going to do with the team from delivery robotics startup Marble?
“Our customers need the best solutions for running an effective jobsite, with improved operator productivity, lower operating costs, and greater efficiency brought by autonomous solutions.” — Karl Weiss, CTO, Caterpillar
Drones, crawlers, trolleys, carts. Dozens of startups have spent the best part of the last decade designing, engineering and building the autonomous robotic vehicles that will replace humans and deliver meals, packages, laundry and mail to our doors.
The market opportunity is enormous and, with the pandemic forcing billions of people to shelter in their homes, it seems obvious that huge fleets of delivery robots should be roaming our cities’ streets. And yet, the technology and the market are just not quite ready. Some startups in the space will be unable to raise sufficient cash to survive through this crisis.
In controlled, industrial-type environments, however, there are very real opportunities to harness autonomous navigation, AI and robotic technologies to improve efficiencies, augment operators’ capabilities, reduce downtime and provide better safety.
Can traditional industrial manufactures leverage this moment to build out the digital capabilities they need to capitalize on those opportunities?
Who is Caterpillar
Headquartered in Deerfield, Illinois, Caterpillar is one of the world’s largest manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives, with sales of $55 billion and a market capitalization of approximately $70 billion.
The original idea behind the formation of the company was by Richard Hornsby, a British entrepreneur who developed a a steel plate track for steam-powered tractors and patented it in 1904. Shortly after, Hornsby sold the patent to Benjamin Holt, one of the founding fathers of Holt Manufacturing Company, who trademarked the brand “Caterpillar”. In 1910, Holt opened up a plant in East Peoria, Illinois, and established the Holt Caterpillar Company. The new track-type tractors proved extremely successful that in 2 years the company had passed 600 employees and was exporting tractors to Argentina, Canada, and Mexico.
After WWI, following a lengthy legal battle and with sales lagging due to the drop in demand post-war, Holt Caterpillar merged in 1925 with its main competitor, C. L. Best Gas Tractor Company, to form the Caterpillar Tractor Company.
Caterpillar grew mostly organically until the early 90s, after which it started to expand aggressively into a global multinational by way of acquisitions, including Mak in Germany, Perkins in the UK, Earthmoving Equipment Division in India, Bitelli in Italy, Eurenov in France, Shandong Engineering Machinery in China, JCS in South Korea and many others.
Today, Caterpillar employs more than 100,000 people in 30 countries and sales in 190 countries. More than 1,800,000 Caterpillar construction vehicles are currently in operation worldwide.
In recent years, Caterpillar established a corporate venture fund, based in Menlo Park, and developed an open innovation strategy focused on, among other priorities:
- Automation, remote control, and autonomy, which provide a range of features from operator assist to full autonomous operation.
- Alternative fuels, efficiency of power systems, and introduce electrification into product lines.
- Advanced analytics and telematics to digitally connect and monitor assets, deliver predictive maintenance alerts and enhance operator guidance.
Who is Marble Robot
Marble Robot belongs to a select cohort of VC-backed startups that rushed to design and build autonomous delivery vehicles starting in the mid-2010s.
Marble was founded in 2015 in San Francisco by Kevin Peterson, Matt Delaney and Jason Calaiaro, to develop an autonomous “sidewalk” robot for food and package delivery. The trio are alumni of Carnegie Mellon University, one of the premier centers for robotics research, and were involved in a variety of autonomous vehicle development projects and CMU’s winning bid in the DARPA Urban Challenge.
In early 2017, Marble struck a deal with Yelp Eat24 to pilot its autonomous delivery service in San Francisco. With is 4-wheeled white robotic carts on San Francisco sidewalks, Marble gained wide publicity and investors’ attention.
On the heels of the Yelp Eat24 pilot, Marble raised a $10 million round in early-stage financing from Maven Ventures, Tencent Holdings and Lemnos VC (adding up to its seed funding for a total of $15 million).
The Deal
On June 29, 2020, Caterpillar announced that “they’ve acquired select assets and hired employees from San Francisco, California based robot and autonomy technology solutions company Marble Robot, Inc.”
In a press release, the company stated its intention to “leverage the team’s fully integrated on-board autonomy technology — including perception, localization and planning — to continue delivering smart, safe, more productive and cost-effective solutions to customers.”
“They’ve acquired select assets and hired employees.”
The acquisition effectively amounts to an acqui-hire transaction. Obviously, Caterpillar has no intention to compete in the food delivery robot business. But with the Marble Robot team, Caterpillar brings in house a proven, battle-tested, tier-1 team of specialists in sensor technology, autonomous navigation, and robotics.
Why it Matters
The past few years have seen a flurry of investments in robotics and autonomy technologies.
In the context of a multi-trillion-dollar shift in commerce and retail to home delivery and away from physical stores, it makes sense that robotic food and parcel delivery technologies have attracted large amounts of intellectual and entrepreneurial capital.
Marble’s competitors include a range of well funded players like Starship Technologies, Clearpath Robotics, Boxbot, Kiwibot, Nuro, Dispatch, Refraction AI, Segway Robotics, Eliport and Teleretail to name a few. And of course, Amazon and Fedex have developed their own delivery robots, the Amazon Scout and Fedex SamDay Bot, respectively. It is a very competitive space, with large scale and network advantages accruing to the services that can grow the fastest. Consolidations and some failures are to be expected.
A global pandemic is precisely the kind of scenario for which autonomous delivery robots should be an obvious solution. The reality is that robotic last-mile delivery presents enormous technical and operational challenges and, while autonomous navigation technologies have made giant leaps in the past few years, large-scale delivery fleets of robot carts and drones in open, uncontrolled spaces — i.e. cities and towns — are still years away.
On the other hand, autonomous navigation in controlled, industrial perimeters is not new. GPS-controlled, driverless tractors are widely used in farming. Robots conduct routine inspections in dangerous and hazardous industrial environments. Fenced robotic mowers are used every day to maintain landscapes.
In fact, Caterpillar itself started developing autonomous mining trucks more than 20 years ago and today it has a deployed fleet of 150 autonomous mining trucks in Australia, South America and North America.
The industries in which Cat has a stronghold — construction, mining, transportation, machinery, power generation — are ripe for transformation, driven by digital technologies. Every dollar gained in labor productivity, in operational efficiency, in maintenance downtime, in incident prevention has a direct impact on the bottomline. Caterpillar and other machinery manufacturers are well aware of that, and are looking at ways to deliver those gains to customers, through digitally-enabled services.
By acquiring a struggling Marble, Caterpillar has adopted a top-notch team of AI and robotics experts who will be able to work on scaling already deployed industrial applications of autonomy, instead of attempting to build an unproven market from scratch.
We should expect more acquisitions of a similar nature. With the automotive, travel and transportation industries in the middle of a historic economic contraction, investments in autonomous technologies will become harder to come by. Some quality teams and valuable technologies will become orphaned, opening a window of opportunity for smart acquirers to gobble up IP and expertise through digital M&A, acqui-hires and asset sales.
TL;DR
- Caterpillar, the largest maker of construction and mining equipment, diesel and natural gas engines, acquired Marble Robot’s team and assets in June 2020.
- Marble Robot is a San Francisco-based autonomous robotics company founded by engineers from Carnegie Mellon University and the DARPA Grand Challenge.
- Marble built a food-delivery robotic cart which it tested in San Francisco in partnership with Yelp Eat24 and raised a total of $15 million in VC.
- Autonomous navigation and robotics technologies are already being used in controlled industrial environments in, for example, mining, farming and chemicals.
- For some robotics startups, an acqui-hire and asset deal with an industrial corporate buyer might become a preferable outcome than attempting to develop unproven markets.
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