There was a brief, sweet moment in 2021 over a few months when it felt like investing in robots could be immune to broader market forces. We all understood fundamentally and implicitly that this was not the case, but it was still a beautiful moment.
The truth is that there was a little bit of insulation in there. There was still enough forward momentum to keep going even as the headwind picked up. But in the end everything ends up on earth. Now that we’re about a month into 2023, we can start assessing the damage. Looking at these charts collected by Crunchbasethings seem pretty grim.
Image Credits: Crunch base
A few topline points:
- 2022 was the second worst year for investment in robotics in the past five years.
- Over the past five quarters, the figures have shown a fairly steady decline.
According to the first point, 2020 was the lowest. It was also an anomaly, with the global pandemic. Uncertainty does not breed investor confidence. The full year figure is even more striking given investor confidence that continued early last year. In the second quarter, things really started to slow down. A cursory glance at the bar chart might suggest that 2021 is an anomaly. Yes and no. Yes, in terms of acceleration. No, in terms of the long term. The question is not if those bars will grow year after year, but when.
Image Credits: Crunch base
The same thing that brought investments to a halt in 2020 accelerated them the following year. Even as business reopened, it became increasingly difficult to fill vacancies and companies across the board were desperately trying to automate. As beautiful as it may be, we are not yet ready to classify automation and robotics as ‘recession-proof’. However, I suspect that those who control the wallet fundamentally understand that these downward trends are more a product of the macro environment than anything specific to robotics.
For some early-stage startups, though, that’s cold comfort. Many runways have been dramatically shortened this year. Consolation may come somewhere down the road, but in many cases decisive action must be taken for those who suddenly find themselves unable to close a round that may have seemed like a foregone conclusion 12 months ago.
Given the choice between acquisition and exit that some will inevitably face, it seems likely that M&A activity will peak. Of course there is less money in circulation, but few can turn down a good sale. In some cases, that will be a way to strengthen products and portfolios.
Anecdotally, I see investment increasing this year, but that seems to be part of the natural cycle of companies waiting until after the holiday season to announce. Proper backlash, on the other hand, seems inevitable, but only those with powerful crystal balls can say exactly when.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.