Hardware News Thoughts #1 | Byju’s buys Osmo, Amazon Forklift and Delivery Robots, Hotel dump Robots, Corruption at DJI

Benjamin Joffe
Jan 24 · 5 min read

HAX invests in 30 to 40 hardware startups every year (200 so far). We also keep an eye on the news, and have — possibly — an original take on them (we’ve seen thousands of hardware startups since we started over six years ago).

As an experiment, here is the first installment of a commentary on news.

Please note that:

  1. These are only ‘quick thoughts and comments’, and not ‘journalistic quality’ nor well researched.
  2. For now, those are my own. They do not necessarily reflect the views of my colleagues, nor HAX at large.

Comments welcome!

Byju’s buys Osmo for $120M

Acquisitions in hardware (esp. above $100 million), are good news.
Osmo raised $32.5 million (source: Crunchbase), so $120 million should have made investors happy. Of course the seed investors are surely happier than the series A and B (e.g. Upfront Ventures / Mark Suster), but sometimes there is an exit opportunity now while the future looks uncertain as an independent company.

Also interesting is the fact that the buyer, Byju’s, is based in Bangalore (source: Crunchbase), raised over $700 million (Wikipedia), and started 10 years ago by offering traditional test prep classes, then added digital services. So it went from offline to online, and is now adding ‘blended learning’.

Robot Hotel Loses Love for Robots

Can’t really blame them…
You can play the novelty game, but it also wears off quickly.

Service robots have to be really useful to justify their existence and cost.
If robots can do anything useful they are also potentially dangerous, and expensive. The ‘social robot’ and ‘companion’ space has suffered losses (like Jibo), and Pepper by Softbank Robotics is still of questionable utility — like the first try of a future that didn’t happen.

Voice assistants are enough for many things.
Instead, the voice assistants proved that you didn’t need a robot to have all kind of non-physical help.

Where they make sense, robots are great.
HAX has invested in many service robots such as Avidbots (commercial cleaning), Simbe Robotics, Plecobot (high-rise window-cleaning), Elephant Robotics (low-cost industrial cobot) and many more.

Amazon has made its own autonomous six-wheeled delivery robot

Another robot for Amazon’s army! They will likely start on private campuses like their competitor Starship.

We also thought it made sense and invested in delivery robots Unsupervised.ai and Dispatch.ai.

Amazon to invest in French firm’s technology for self-driving forklifts

Good news for Balyo, a French autonomous driving company specialized in forklift automation. At some point Amazon will have more robots than people, which will make it hard to compete for less automated e-commerce players.

Balyo has already gone public in France and is currently worth 100 million euros.

Note: It’s a small world — Balyo’s CEO was France’s co-founder of Aldebaran Robotics (creators of Pepper, acquired by SoftBank) — and we interviewed him during last year’s Startup Exit Masterclass in Paris (video).

AR startup Meta’s assets sold

It’s not good news for AR.
Meta had raised nearly $83 million, reaching a valuation of as much as $300 million.

AR is not easy, and not cheap.
To properly blend with reality, you generally need tiny high-res screens with half mirrors or some kind of projection, as well as a small 3d scanner to recognize what’s around. Then balance the whole thing on your head, with a good processor and a battery if you don’t want too many cables around. For those reasons, AR has been generally limited to B2B (so long, Glass). I’ve tried the Hololens and it does its job, but it is not cheap. It seems Magic Leap under-delivered.

VR is much easier.
I own an Oculus Go — the entry model is $200 and it’s ‘good enough’ to watch Netflix on your sofa, bed or on a flight (yes), and play around with some apps (like the Stranger Things chapter of Face your Fears, or the Land’s End game).

Chinese drone maker DJI uncovers corruption, sees $150 million loss

The wording of ‘loss’ is a bit misleading. Some staff found a way to get money by overcharging for components. It could have involved the suppliers themselves. Considering DJI is Chinese and based in Shenzhen, it’s a cautionary tale about sourcing and prices.

Many startups rely blindly on their factories or supply chain management companies for sourcing components, and end up being overcharged. I’ve heard of 100% extra (not just 5–10%), and totally legally: it’s not a crime to take advantage of ignorance.

I believe DJI will be fine: they are already dominating the market so uncovering this case will simply help them improve their margins. Oh, and DJI employs 12,000 people.

— That’s all for now!

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Benjamin Joffe

Written by

Partner @ HAX & SOSV — Investors in 200+ Hardware Startups | Digital Naturalist | Keynote Speaker | Angel Investor | 18 years in Asia | Addicted to airports.

SOSV: Inspiration from Acceleration

Insights from The Accelerator VC—including our programs (HAX, IndieBio, RebelBio, Chinaccelerator, MOX, Food-X, dLab) & our startups.

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