German robotics startup raises $43M to automate smaller factories

Small and medium-sized factories have lagged behind larger ones in terms of automation. Munich-based RobCo sees a big opportunity there for its low-cost, modular robots.

IIn 2023, more than 550,000 new robots will be installed in factories, according to the International Federation of Robotics. However, the vast majority of them were in large-scale factories, with about 10% of them being deployed in small and medium-sized enterprises.

Those manufacturers are the target of RobCo, a startup that designs low-cost, modular robots that fit into smaller factories. To date, the Munich-based company has deployed a thousand units to more than 100 customers, most of them in Europe. Revenue is now approaching $10 million.

The company, founded in 2020 by Forbes 30 Under 30 alum Roman Hölzl, just raised $43 million led by Lightspeed Venture Partners to help RobCo grow and develop AI that could make robots smarter, allowing them to design the most efficient way to work, for example , or to learn a new environment with simple commands. “We use artificial intelligence to define a given task,” said Hölzl, the company’s CEO Forbes. “You upload your factory and we determine the ideal movement with AI.”

The funding brings RobCo’s total investment to $61 million at a valuation of approximately $200 million.

RobCo’s bots differ from the complex, often customized systems used by larger factories, which are often too expensive for smaller manufacturers. These companies also require greater flexibility so that their robots can switch from one task to another without purchasing specialized robots for each task.

“It’s a Lego model powered by a software platform.”

That’s why Robco offers robotic units that can handle common factory tasks like loading material into machines, unloading finished parts, and organizing pallets. Such tasks may sound simple, but robots need to be able to determine things like whether a machine is on or off, or if a finished part has turned on its side in order to work accurately. The complexity is in the software.

“It’s a Lego model that’s activated by a software platform in the background that does the magic to make it happen,” Hölzl said.

Hölzl, now 30, started the company based on research he did at the Technical University of Munich, one of Germany’s leading robotics research centers. With co-founders Paul Maroldt and Constantin Dressel, who were also researchers there, he left his Ph.D. schedule to launch the company in 2020. Earlier in his career, Hölzl was a competitive skier and briefly worked in business development at Tesla
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and product development at robotics company Kuka.

By the time of Hölzl’s inclusion in Forbes list in 2023, the startup had raised $19 million from venture capital firms that included Sequoia Capital and angel investors such as Daniel Dines, the billionaire founder of UiPath.

Manufacturers face labor shortages that they rely on automation to solve. To attract these customers—many of whom are suppliers to major manufacturers like BMW or Boeing
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—RobCo offers its robots as a service, at prices ranging from $2,000 to $4,000 a month, less than the cost of a machine operator’s monthly shift. Hölzl said about 70% of RobCo’s customers are developing robots for the first time.

“They’re attacking the big wave of SMBs where there’s almost no automation,” said Alex Schmidt, a Berlin-based Lightspeed partner who first met Hölzl years before he made the investment. “You can finally take advantage of this market.”