Dear Startup Investor,
Buck Jordan here to write about my favorite topic: robotics.
Well, robotics is set for an exciting decade ahead. One estimate forecasts the global robotics market to grow from $62 billion in 2019 to more than $189 billion by 2027 at a 13.5% CAGR. This rapid growth offers investors huge opportunities to reap the gains of this growth.
My passion for robotics – and excitement about its potential – comes from years of observing several trends coalescing.
The first and most important of those trends is America’s ever-worsening labor shortage.
Pre-COVID, employers were struggling to find workers, and once COVID hit, things went from bad to worse. In October of last year, I wrote about how the U.S. labor force had 5 million fewer workers than compared to February 2020. This means 5 million people dropped out of the labor force completely, an astonishing stat.
That gap of 5 million workers has closed meaningfully since then, and as of February 2022, there are just more than 2 million fewer workers in the American labor force than in February 2020.
While this recovery in the labor force is good news, the fact of the matter is the economy hasn’t been asleep throughout the last 2 years. In fact, the economy has been roaring ever since mid-2020, and it shows.
The number of job openings has leaped from an average of 7 million pre-pandemic to hovering around 11 million every month since July 2021. Finally, the US unemployment rate hit 3.8% in February 2022, nearing its record low of 3.5% in February 2020.
In addition, not only is there a shortage of workers, we’ve also seen “The Great Resignation” taking place during the past year, where workers are quitting their jobs in droves.
This Great Resignation is motivated in large part by changing worker preferences. Most of us had an opportunity during the lockdowns to reflect on our lives, work, and more, and many workers came out of that reflection seeking different work.
The combination of a growing labor shortage, changing worker preferences, and rising wages makes the case for robotics more and more appealing to employers around the country.
The stage is set for a decade of automation; we’re going to see a lot more robots around us throughout the next 10 years.
Here are the three biggest sectors I think are most ripe for robotic deployment.
Earlier this year, I wrote about how the ways we produce, distribute, and cook food are being reinvented rapidly.
The hospitality sector has been one of the most severely affected by the labor shortages in the U.S., especially as demand for home delivery of food skyrocketed during the pandemic. In addition, turnover in the hospitality industry is particularly acute, with more than 1 million people quitting their jobs in the sector in November 2021 alone.
This high turnover and the broad shortage of workers is putting tremendous pressure on restaurants to automate as much as possible. The growing challenges restaurants are facing helped inspire me to start Miso Robotics and Piestro a few years ago to capitalize on the growing push for automation in the kitchen.
In fact, over the last couple months, I’ve launched two new companies in the food robotics space.
The first is Bobacino, which is building an automated kiosk to produce boba (a.k.a. bubble tea), a drink that is rapidly growing in popularity across the United States.
Bobacino costs a fraction of what typical boba stores cost to set up, requires far less square footage, and offers dramatically higher profitability than traditional retail boba cafes. Bobacino is currently crowdfunding to fund its launch in the market.
Combining our expertise building Piestro with 800 Degrees’ pizza-making expertise, 800 Go will be deploying mpre than 3,000 automated pizza kiosks across high-traffic locations such as airports, hospitals, ghost kitchens, and more. 800 Go is also currently crowdfunding to fund its aggressive expansion plan.
Meanwhile, while most robotic foodtech startups are targeting the business world, Suvie is building a countertop kitchen robot for the home.
Suvie’s compact design and range of cooking capabilities make it a perfect cooking solution for the business professional and a fascinating example of robotics making it into our homes in a small way. Suvie is similar to the Oliver Robot by Else Labs, another home cooking robot designed to make cooking easier and more efficient for a busy professional.
At the end of the day, how we prepare food is changing at restaurants and at home quicker than any of us realize.
Besides food preparation, we’re also seeing food production quickly adopt new technologies such as robotics.
The agriculture industry has always been at the cutting edge of technology adoption to decrease inputs, increase yields, and fight off diseases and pests. From the plow to fertilizer and drip irrigation, farmers are always adopting new technologies to improve their businesses.
Well, for the first time, farmers are starting to deploy robotics on farms to automate parts of the food-production process.
One of my favorite examples is TerraClear, an autonomous rock-picking robot.
TerraClear has designed an ingenious solution that can map agricultural fields, then, autonomously drive, pick up, and clear rocks from fields. Its customers report saving huge amounts of time. This is definitely one of the most unique startups I’ve ever seen…
At Wavemaker Labs we’ve also begun to explore the agriculture sector in-depth, and we recently launched Abundant Robots, an autonomous platform for smart fruit harvesting.
Fruit harvesting is one of the most expensive agricultural practices, and this partly explains why fruit costs much more than many other crops at a supermarket.
With Abundant, we’re turning the cost of fruit harvesting on its head by using our expertise in robotics to build a smart solution to harvest apples. We’re currently crowdfunding to continue product development on Abundant and launch in the market.
Another fascinating company working to automate agriculture is Monarch Tractor.
Monarch is building autonomous electric tractors to make farming more economical and sustainable. While the introduction of tractors was a huge productivity bump for the agricultural sector, making them autonomous and electric is going to be almost as significant a milestone for the agriculture industry.
Besides these companies, there are companies building robots to automate weeding, crop spraying, disease detection, and a whole range of other farming tasks.
Slowly but steadily, robots are automating many of the jobs that humans no longer want to do – or where we can no longer find enough workers to keep up with demand.
These robotic solutions offer food and agriculture businesses the chance to increase the efficiency of their operations, increase profit margins, and offer more consistent, high-quality service to their customers.
Simply put, robot farmers and chefs are going to become a lot more common in the years to come.
Excitingly, as an angel investor, there are several startups crowdfunding today in these spaces and many more to come in the next few years.
Until next week!