University of Texas at Austin Venture Panel

Note: Grit Ventures is an Affiliate Sponsor of Texas Robotics and Jennifer serves on the University of Texas at Austin Computer Science Advisory Council.

Host: Dr. Justin Hart, University of Texas at Austin

Moderator, Jennifer Roberts: On October 7th I had the pleasure of moderating a panel for faculty and graduate students at the University of Texas at Austin Robotics. The topic was “Labs to Launch” — how to commercialize new technologies in AI+Robotics and what opportunities venture investors are getting excited about. My panel was comprised of traditional VCs and corporate VCs from around the country.

Some key take-aways:

Robotics is exploding with opportunities especially in bounded environments like construction sites, manufacturing floors, fields, and factories.

VCs look for startups that have a deep understanding of customer problems and game changing solutions or 10X improvements with repeatable value that can scale.

Computer vision is creating hugely interesting data sets that are being used not only to do the automation task at hand but to feed decision-making tools and greatly improve operational efficiencies.

Panelists:

- Andrew Beebe from Obvious Ventures in San Francisco

- Will Coffield from Riot Ventures in Los Angeles

- Kate Shillo Beardsley from Hannah Grey in Denver

- Michael Mahan from STANLEY Ventures in Atlanta

- Jason Gabriel from Syngenta Ventures in Virginia

Jennifer, Grit: Thanks for hosting this panel, Dr. Justin Hart! Let’s start with panelist intros.

Andrew Beebe, Obvious Ventures

Obvious Ventures is an early-stage venture fund with $600M under management. We look for purpose driven founders transforming trillion dollar industries.

Will Coffield, Riot Ventures

We are a pre-seed/seed stage venture firm headquartered in LA. We invest all over the country and our focus is on backing companies that are bringing automation to physical industries like construction, manufacturing, communications infrastructure, and defense.

Kate Beardsley, Hannah Grey Ventures

We are a pre-seed/seed stage venture firm investing in the intersection of human behavior and technology. We have offices in Denver and New York City.

Mike Mahan, Stanley Ventures

I work for the corporate arm of Stanley Black and Decker. We are the #1 tool company in the world. As strategic investors we looking to impact solutions that Stanley can help startups commercialize. For example we are the 2nd largest security integrator in North America and have a multi billion dollar fastener business. We invest seed through S-B in hardware, hardware enabled software and software.

Jason Gabriel, Syngenta

Syngenta is one of the 4 major agri-businesses in the world. We help farmers to grow food and protect crops. We are interested in automation of the farm. This is an older industry that needs to be further digitized, data optimized and process automated.

Jennifer, Grit: Great, let’s dig in. When we think about the Fourth Industrial Revolution we know that new technologies will be deployed to automate and improve logistics in every major industrial vertical like agriculture, transportation, construction, energy and manufacturing. Technology innovation can occur in university labs, in startups and in big companies. What are some of the interesting problems to solve in these older industrial verticals?

Andrew, Obvious: Everything. We see opportunity everywhere — digitization, de-carbonization and decentralization. Our portfolio company, Plant prefab, for example is automating home building in a factory setting, then delivering them on trucks. When you are in ring-fenced environments, robotics explodes with opportunity, because you don’t have to worry about the infinite edge cases say of autonomous driving in the wild for passenger vehicles. A factory floor building homes can use robotics in safe and effective ways in a contained environment.

Will, Riot: When you look at the entire physical infrastructure of the supply chain there is a lot of low hanging fruit there. Broadly we are looking for vertical robotic solutions. Our thesis at Riot is to invest heavily in full-stack observe and maneuver vs. manipulation use cases. Rugged, Elementary, Shield.ai. It’s all about mobile dynamic computer vision, using robotic eyes to gather physical data sets.

Kate, Hannah Grey: we think about opportunities from a B2B2C perspective. We’ve also seen a Covid lift on legacy investments. For example, Chowbotics, a salad robot was a “nice to have” pre-Covid, but it’s essential now that salad bars are cesspools for germs. They are serving workers at hospitals, grocery store, universities, and food management services. We are interested in how the robot delivers a consumer experience and what the data collection opportunity is.

Jennifer, Grit: Let’s switch gears and talk about it from a large corporate perspective. Mike, what is disrupting Stanley’s business and what are you investing in?

Mike, STANLEY: We are not a construction company but our tools are used on construction sites all over the world. Construction is an older industry in dire need of productivity gains. There are cool companies like Canvas, Rugged and Build Robotics in construction that increase productivity. On the industry 4.0 side, we are trying to figure out what is the right way to use all of this data these machines are producing, for example monitoring the optimization on your manufacturing floor.

Jason, Syngenta: Syngenta is now a biology company and biological systems are horrifically complex. Farming is a difficulty environment with lots of variables and lots of data. It’s hard to be predictive. There are lots of opportunities to create new decision-making tools and new analytic tools, for example gene editing applied to plants. We are also looking at automated harvesting and precision applications of chemicals to save the environment.

Jennifer, Grit: What does it take to commercially deploy an exciting new technology to a customer? At Grit our bar is commercially ready, safe and reliable. What do startups need to do to achieve this and what milestones do you look for in funding these companies?

Andrew, Obvious: It depends a little bit on stage. For example, our portfolio company, Lily, is a vertical take-off air taxi. If you are working on a massive idea like this it’s about setting expectations with your investors for the journey you are about to be on. But for something like autonomous drywalling what really matters is safely getting into market with happy customers and advanced orders. Overall It needs to be a game changer for a corporate customer or magic to a consumer. Just improving operating cost by 20% is not exciting. We need to see 10X improvement, something truly transformative.

Will, Riot: We have a tendency to be very focused on the seed round. Raising money for commercializing vs. R&D is when the customer can say this technology is solving a tangible paint point and they an ascribe a repeatable value to it. We help our companies relentlessly focus on what they need to do to demonstrate that value.

Kate, Hannah Grey: In the consumer companies we fund, we look for early validation in a B2B contract. We also need to be able to touch and feel the product. We assess whether this is something that consumers have to have in their life.

Will, Riot: We are customer oriented. If you can come to the table with a great team and fully mapped out customer problem, we’ve got capital for you. The “trial close” with a customer is really important for getting your seed round raised.

Mike, STANLEY: I’ll give an example. We funded a Texas company called Arix Technologies that makes a robotic inspection service for oil and gas pipelines within refineries. Having customers is great but also understanding your business model and how your customers want to pay for the product is very important. If you go with Robotics-as-a-Service you will be carrying assets on your balance sheet. The way Arix operates is different. It provides not only Opex savings but also improves safety. To be able to put a robot 100 feet up in a hazardous area vs a person on scaffolding is a huge deal.

Jason, Syngenta: In our space we have a series of large companies that control most of the industry. In a B2B setting, how your customers are buying products and engaging with products today is important. It’s important to fit into existing sales channels.

Thanks Everyone!

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