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TRANSACTIONS REPORT 2017 Roboticsbusinessreview.Com FOURTH QUARTER TRANSACTIONS REPORT 2017 roboticsbusinessreview.com Are You Still Manually Sorting and Packing Orders? Sure Sort is a highly scalable, configurable and cost effective small item sorting system with excellent ROI. Sure Sort can be designed to support up to 670 sort locations in a small footprint, and requires significantly less staffing compared to traditional put walls. Sure Sort installs in a week or less. Sure Sort is ideal for small businesses looking for a cost effective entry into warehouse automation as well as large fulfillment operations looking to streamline their process. Call us today to learn more! The Old Way Up to The New Way 670 sort locations Applications • E-commerce Order Fulfillment • Return Center Processing • Pre-Sorting Inventory • Kit Building • Direct Store Delivery (DSD) • Transshipment/Cross Docking Up to • Last Mile Delivery 2,400 items per hour 305 Commerce Drive, Moorestown, NJ 08057 opex.com | 856.727.1100 TRANSACTIONS REPORT 2017 FOURTH QUARTER Year’s End Provides Perspective on SoftBank, which already makes Automation Transactions the Pepper By Jim Nash robot, made multiple bids One of the most significant investment trends in robotics last year was the at robotics accelerating appetite of SoftBank Group Corp. It is beginning to give the leadership this past year. industry a luster typically bestowed by venture capitalists operating in other digital technologies. Of course, activity in robotics reflects the overall technology ecosystem. To the frustration of a lot of robotics entrepreneurs and at least some of their backers, industry financings have almost entirely remained fewer and smaller, even as hardware and, to a lesser extent, software development has surged. roboticsbusinessreview.com 3 TRANSACTIONS REPORT 2017 FOURTH QUARTER This is where one must acknowledge the conventional wisdom dictating that investment in hardware seems less exciting than deals involving software, and therefore gets ignored by get-rich-quick money people — primarily venture capitalists. But corporate venture funds and direct corporate investments are putting money into robotics efforts. Either they are fine with hardware, or they see it as a delivery mechanism for advanced software, networking, and services. After all, that (and, in Apple’s case, status) is what differentiates smartphones in the eyes of consumers. The same could soon be true for augmented reality and commoditized industrial automation. This brings the topic back around to Japanese technology conglomerate — and newly minted corporate-venture giant — SoftBank. Five of the year’s top 11 deals in terms of value involved SoftBank, either as the sole investor or as lead. Before spotlighting those five transactions, it is very much worth mentioning that SoftBank is rumored to be raising a sister fund to its behemoth, still-open, $93 billion Vision Fund (which is targeted to top out at $100 billion). Word is that the new fund might be the equal of the original purse. It is likely that, as it has done with the private-sovereign Vision Fund, SoftBank will invite other deep pockets to join. Apple this year promised $1 billion to the Vision Fund in January, a deal that ranked No. 20 on our list. How far afield could SoftBank look for investors in any new fund? Conceivably, pretty far. The Kingdom of Saudi Arabia agreed in 2016 to be the Vision Fund’s lead investor, contributing up to $45 billion, by 2021. roboticsbusinessreview.com 4 TRANSACTIONS REPORT 2017 FOURTH QUARTER SOFTBANK LEADS THE YEAR SoftBank’s five biggest completed robotics deals for the year, conservatively estimated at $50 billion, show a desire to dominate an autonomous-vehicle future. They were: The $31 billion buyout of U.K. chip designer ARM Holdings in September. Microprocessors designed by ARM are more energy-efficient than those of other market leaders, making them attractive to vendors serving the Internet of Things. ARM chips already reside in the phones and tablets of, among others, Samsung and Apple. The Arm deal is the largest of those tracked by Robotics Business Review in 2017. A $9 billion stake taken in Uber Technologies Inc. by an investment group led by SoftBank in late December. SoftBank itself how holds 15% of Uber shares. Another 2.5% is held by the other investors in the group, including Sequoia Capital, Dragoneer Investment Group, and mammoth Chinese technology conglomerate Tencent Holdings Ltd. (Two notes: Tencent paid $1.8 billion in March for a 5% share of Tesla Inc. Also, Alphabet Inc.’s growth investment fund, CapitalG, put $1 billion into Uber competitor Lyft Inc. in October.) The $5.5 billion April investment into Chinese ride-hailer Didi Chuxing. SoftBank’s piece amounted to $5 billion, partly via its holding company, SoftBank Group Capital Ltd. A direct investment (not through the Vision Fund) of $4 billion into Didi just eight months after its first Didi purchase in 2017. This time, SoftBank reportedly acted with a United Arab Emirates sovereign fund, the Mubadala Investment Co. It has not been announced how the round was divided. SoftBank took a reported $4 billion stake in U.S. chipmaker Nvidia Corp., acknowledged in May. Nvidia specializes in graphics chips that can be used to efficiently process the torrent of data inherent in mobile robotics, including roboticsbusinessreview.com 5 TRANSACTIONS REPORT 2017 FOURTH QUARTER driverless vehicles. SoftBank’s purchase of walking robot maker Boston Dynamics got a lot of attention because of YouTube darlings Atlas and BigDog. It’s more intriguing, however, because it acquired the company from Google parent Alphabet and because SoftBank already has the Pepper humanoid robots. NVIDIA KEEPS PACE FOR SELF-DRIVING CARS Nvidia itself made a couple appearances on our list. In September, it participated in a $52 million stake in JingChi Inc., a self-driving vehicle firm in China. JingChi is racing to deploy a fleet of Level 4 autonomous vehicles this year. Such autonomous vehicles might well begin with driverless trucks, fleet vehicles, and deliveries. They could also improve mobile robots in warehouses and public spaces. On the AI side, Komatsu is working with Nvidia for construction sites. Nvidia also took part in a $20 million round into Chinese software and sensor maker TuSimple. The startup’s goal is to get autonomous vehicles on the road using just visible-light cameras and millimeter-wave radar. Of course, as with everything digital, SoftBank investments have a long tail — in this case, sub-billion-dollar investments in companies involved in autonomous- vehicle endeavors or endeavors that can be refocused to that area. Along the tail is a $502 billion round that it led in May into U.K. cloud-based software maker Improbable Worlds Ltd. Venture funds Andreessen Horowitz and Horizons Ventures also participated. Improbable’s SpatialOS is used today to create detailed, realistic and sprawling computer-game environments. It could be used as a mapping tool for driverless vehicles, too, though. Five months later, almost to the day, the Vision Fund led a $164 million round in Mapbox Inc., a software firm making maps, location search and direction roboticsbusinessreview.com 6 TRANSACTIONS REPORT 2017 FOURTH QUARTER services for mobile uses. Joining SoftBank were the Foundry Group, DFJ Growth, DBL Partners, and Thrive Capital. In July, SoftBank invested in Nauto Inc., maker of sophisticated software that can, in real time, alert commercial drivers and fleet managers to dangers. The resulting data can help coach drivers and support managers after incidents. SoftBank and venture legend Greylock Partners led the $159 million round, with participation by BMW iVentures, General Motors Ventures, Toyota AI Ventures, Allianz Group, Playground Global and Draper Nexus. The tail goes on (and on), but it bears mentioning that SoftBank led a $120 million round into Lemonade Inc., an artificial intelligence-supported insurance startup. Lemonade positions itself as a carrier that Millennials can trust, and Millennials will be the first big demographic for autonomous cars. Not being in the staid mode of legacy insurers, it is safe to assume Lemonade will take driverless vehicles seriously as a market opportunity. Also participating in the round were Google Ventures, Sequoia Capital, Thrive Capital, Allianz, Aleph, General Catalyst, Sound Ventures, Tusk Ventures and XL Innovate. INTEL TAKES MOBILEYE FOR A SPIN As significant as were SoftBank’s moves, no analysis of 2017 would be complete without noting Intel Corp.’s $15.3 billion acquisition of Mobileye N.V. in March. The purchase was a victory for some of those in all industries facing radical change. In this case, Mobileye represents a markedly low-tech answer to the question, how do we get automation on the roads today? Every other major non-auto-manufacturing player in autonomous vehicles is looking for total suites of features, sensors and deliverables. Valid though that approach is, it chains contenders to an all-or-nothing starting gate. roboticsbusinessreview.com 7 TRANSACTIONS REPORT 2017 FOURTH QUARTER Automakers and Intel/Mobileye (and Nvidia/TuSimple) are creating gradual progress, installing systems as the technologies mature. Mobileye’s unassuming visible-light cameras can be linked into existing vehicles systems and out over wireless networks to fleet managers and other wide-horizon companies and agencies. MIDEA’S KUKA ACQUIRES VISUAL COMPONENTS A final note: German industrial-robotics maker KUKA AG — owned by Chinese appliance maker Midea Group Co. — acquired a 3D-simulation software maker in December. Finland-based Visual Components writes code used to plan factories, squeezing inefficiencies out of planning itself, of course, but also of manufacturing operations and facilities. No value was placed on the transaction. KUKA had already been using Visual Component applications to design manufacturing setups it creates for its traditional heavy-industry buyers. The software proved versatile enough that it could enable KUKA to entertain system sales in new markets that have differing layout requirements.
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