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Briefing – Investing in Robotics and Automation: Supporting Ideas Through Crowdfunding Platforms

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Briefing – Investing in Robotics and Automation: Supporting Ideas Through Crowdfunding Platforms MENU Briefing – Investing in robotics and automation: Supporting ideas through crowdfunding platforms JUNE 27, 2018 BY DAVID EDWARDS In this article, Robotics and Automation News takes a look at crowdfunding platforms If you’ve got some money to invest, you may have considered, or even participated in, a crowdfunding campaign. You wouldn’t be alone, of course, since literally billions of dollars have been raised in the past few years through such platforms. The giants of the crowdfunding market are names you may be familiar with – Kickstarter and Indiegogo come to mind immediately. Between them, these two platforms raised $3 billion by 2015, according to Investopedia. Indiegogo, which was established in 2007, had raised $1 billion, while Kickstarter, founded in 2009, had raised $2 billion. That was a couple of years ago, so they may have reached another billion between them by now. Also, many similar crowdfunding platforms have been started in the past few years, a few of them by the big two mentioned above. For example, Indiegogo launched a platform called Microventures, which has capital commitments of approximately $12 million, according to data collated by Crowdfund Capital Advisors and published on VentureBeat.com. (See pie chart below.) Along with Kickstarter and Indiegogo, Investopedia includes another crowdfunding platform called CircleUp in its “top 3”. CircleUp has raised approximately $305 million for more than 200 entrepreneurs since its launch in 2011. CircleUp tends to specialise in helping what are described as “emerging brands” that are looking to raise capital to grow their business and take it to the next stage. Most companies which apply to CircleUp tend to have revenues of at least $1 million. For Kickstarter, Indiegogo and many of the other platforms, complete newbies or startups can apply. And pretty much all of the platforms offer expert advice on how to develop their ideas and raise funds. This is probably something that is underestimated by people who may have only heard of crowdfunding platforms in passing – they may not realise the depth and breadth of expert advice and support they offer. They are more than just crowdfunding websites. But even so, crowdfunding websites tend to be registered with the US Securities and Exchange Commission, to allow them to raise money within formal, legal structures. And it’s obviously very much in the platforms’ interest to thoroughly analyse and prepare ideas – and the entrepreneurs behind them – in order to ensure maximum chance of success in not only raising money but also future success. And from an individual investor’s point of view, knowing that the fundraising ideas are being analysed by professional business analysts help as some sort of reassurance. Also, the fact that many large, specialist technology investment companies – such as Andreessen Horowitz, Y Combinator, and Google Ventures – also use these platforms would obviously provide further encouragement. This is probably why around $750 million a year is invested through US crowdfunding platforms, according to data collated by Statista. That said, we are not an investment advice website and we are not giving advice either way – it’s up to you if you want to put money into these things. Largest crowdfunding platforms Infogram Supermassive Pebble The pie chart above does not show Kickstarter, Indiegogo and other supermassive platforms, probably because they are just too large to compare with newer, smaller platforms. Perhaps to illustrate, we can consider the example of Pebble Time’s smartwatch, which raised more than $20 million on Kickstarter in 2015. Obviously, that’s just one project among many multimillion-dollar ideas that can be found on the big platforms. But there is no shortage of platforms now, small or large. Other well-known ones include: Patreon GoFundMe Crowdrise PledgeMusic Razoo RocketHub There are probably hundreds of others. But staying with one of the biggies for the moment, Indiegogo has teamed up with Arrow Electronics to provide a “flash funding” that has already given $1 million to qualifying entrepreneurs. Arrow Electronics – which is a global technology company with annual revenues of around $24 billion and runs numerous competitions for ideas – is continuing the partnership with Indiegogo and has invited entrepreneurs to apply for the $50,000 available this month – June. These flash funding opportunities are now open to qualified Indiegogo campaigners in the USA, Canada (excluding Quebec), and select European countries. Entrepreneurs who apply now will become eligible for flash funding opportunities throughout 2018 – provided they qualify. “Arrow and Indiegogo have teamed up to give entrepreneurs the necessary tools and services to bring their product ideas to life,” said the companies in a newsletter to publicise the opportunity. “Any entrepreneur building a tech product is welcome to join the program and access benefits for free.” The additional benefit to entrepreneurs who apply is the opportunity to gain knowledge from experts in their fields. Upon joining, qualified campaigns get a one-to-one design consultation with an Arrow engineer, “who can help you get your technology Arrow Certified and access other benefits”, says the company. FIVE CROWDFUNDING PROJECTS WE HAVE COVERED Company Amount raised Percentage funded 1. Segway Robotics $1.2 million +1,085% 2. Aido Home Robot $891,589 +595% 3. Franklin Robotics $312,810 +300% 4. Dorna Robotics $71,935 100% 5. EveryBot $49,375 +4,227% Meanwhile, in robotics Robotics startups and, sometimes, established companies are also featured on crowdfunding platforms, and generally tend to do quite well. (See table above.) Robotics and Automation News has featured a couple of projects from Kickstarter in the past year or so. One of them was Dorna Robotics, which developed a small, 5-axis robotic arm, and the other was Franklin Robotics, which raised funds for its gardening robot. Robotics projects on Indiegogo that we have featured include Segway Robotics, which raised $1.1 million in 50 days for its mini personal transporter, and EveryBot, a mopping robot which has raised almost $50,000 to date. The most recent Kickstarter robotic project brought to our attention is one founded by MIT professor Carlo Ratti, who started out asking for less than £40,000 for his “Scribit” robot, but has so far received pledges approaching £650,000. Scribit is said to be a robot which can draw patterns on walls, which might be useful if you don’t like plain walls. But then, even if you do like plain walls, apparently Scribit can erase what it draws. Which, of course, means you could have a different pattern on your wall every day. Whether any of the ideas and projects go on to enjoy commercial success beyond the crowdfunding platforms they seem to have done very well on is sometimes secondary. Some people are critical of that approach, arguing that raising money on crowdfunding platforms seems to have become the ultimate measure of success, rather than the broader market. But one of the reasons why crowdfunding platforms work is probably that they include investors as well as just buyers, who just want to buy the product. In fact, more money probably comes from buyers than investors. Which is good in a way because it might indicate how the product will do out in the wider market. So, if these crowdfunding platforms are not the ultimate goal, they’re certainly close to it. Share this: Share Related.
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