The Golden Age of Robotics: A Shift in Investment and Innovation

The Dawn of Interest in Robotics and Funding Challenges

The sector of robotics startups is currently experiencing a golden age, and this is not solely due to the impact of Artificial Intelligence. In 2015, when Seth Winterroth left his position at GE Ventures to co-found Eclipse Ventures, his primary focus was on the robotics sector. Specifically, he was interested in the growing number of robotics startups that faced significant growth challenges due to a lack of interest and investment.

Winterroth, a partner at Eclipse, explains that these startups were teams recently graduated from prestigious universities such as Waterloo, Carnegie Mellon, and MIT, who had founded their companies in the robotics field. Their recurring complaint was the difficulty of obtaining institutional venture capital. He points out that during that period, the majority of venture funding in Silicon Valley was directed towards more mature application sectors or advanced computing platforms.

Since then, the situation has undergone a significant transformation. After a decade of investment in robotics startups, Winterroth asserts that the opportunity to invest in this field has never been better. The robotics market has evolved remarkably, and the hardware components and software that support robots have become more advanced and less expensive.

Increasing Investment Momentum and the Role of Artificial Intelligence

Venture investment in robotics startups is experiencing significant momentum. According to Crunchbase data, investors poured $6 billion into robotics startups during the first seven months of 2025. Crunchbase anticipates that total robotics funding for this year will surpass that of 2024, which was approximately $7.2 billion (Source: Crunchbase News, December 2024). This makes the robotics sector one of the few categories, apart from Artificial Intelligence, that is witnessing notable growth in funding.

While some may attribute the increasing investor interest in robots to Artificial Intelligence – and it is important to acknowledge the vital role of AI in driving robotics technology – long-time investors in this sector emphasize that the industry has not achieved this progress solely due to recent advancements in Artificial Intelligence.

Growth Drivers and the Maturation of the Robotics Market

The acquisition of Kiva Systems by Amazon in 2013 is considered the main catalyst that propelled the robotics industry towards its current momentum. Winterroth describes this acquisition as "the spark that launched a thousand robotics startups." Between 2011 and 2016, the sector witnessed the emergence of many new companies, such as 6 River Systems and Clearpath Robotics, which achieved success, while others faced challenges. Nevertheless, these experiences, both successful and unsuccessful, contributed to the accumulation of knowledge and talent development, paving the way for a new generation of robotics ventures.

This initial wave contributed to attracting specialized engineers to the robotics sector and enabled startups to better understand market needs and product-market fit. Kira Nudelman, a partner at Bee Partners, affirms this trend, noting that a decade of trial and error in robotics has helped startups identify the actual market requirements for robotics and automation.

Some startups, such as Rapid Robotics, which Nudelman supported, faced failure in their quest to identify market needs. However, these failures provided valuable lessons for subsequent generations of robotics startup founders, who now have a clearer understanding of potential customer requirements in this sector. Nudelman shares her experience, where her investment vision evolved as the market matured. She explains that the concept of "lights-out manufacturing," which assumes the absence of humans from the production process, has not been fully realized, as proven since 2010. She notes that many repetitive and simple tasks, such as machine maintenance, still require human intervention to insert or remove components, highlighting significant opportunities for robots in these areas.

Before the boom in Artificial Intelligence, Fady Saad, General Partner at Cybernetix Ventures, which specializes in early-stage robotics, founded his company after realizing the need to connect robotics startups with funding sources, based on his experience as a co-founder of MassRobotics.

The Impact of Declining Costs and Artificial Intelligence on Robot Training

Additionally, the declining costs of robotics hardware have contributed to increased investor interest, according to Saad, who points out that manufacturing robots is currently much less expensive than it was five years ago. This reduction in costs provides startups with a more sustainable path for growth and expansion, making them more attractive to financial backers. Saad explains: "The cost of building robots is significantly decreasing. Advancements in sensor technology, computing, and batteries have arrived at an opportune time to launch integrated robotic solutions."

There is no doubt that Artificial Intelligence developments benefit the robotics industry. While many view AI as a primary driver of increased interest in robots – alongside growing interest in humanoid robots promoted by figures like Elon Musk – it is not the sole factor. Saad adds that Artificial Intelligence and Large Language Models (LLMs) can be useful for robot training, but these models primarily rely on online data, whereas robots need to interact and learn from the real world.

Some companies are moving towards building advanced models based on real-world data; in August (perhaps 2025 based on the article's context), NVIDIA launched a new set of universal models designed for robot training. However, Saad expects that the process of collecting and training robots, especially those intended to coexist with humans, on real-world data will take longer.

Promising Opportunities and Challenges of Consumer Robotics

Despite the growing momentum in the robotics industry, this does not mean that all startups have reached the optimal model yet, or that all categories within robotics have matured equally. Nevertheless, sectors that adopted robotics and automation early, such as manufacturing, warehousing, and construction, remain attractive investment areas for robotics startup investors.

For Winterroth, Saad, and Nudelman, robots in healthcare and surgery still represent a promising investment opportunity. Nudelman adds robotic home care for the elderly to this category, citing the labor shortage where robots, even if not perfect, can offer a better solution than no assistance at all. Saad explains that vertical robotics companies often collect more real-world and physical data compared to horizontal companies.

On the other hand, humanoid robots or consumer robots – especially those resembling humans – do not receive the same enthusiasm from investors. Saad expresses his skepticism that consumers will want robots in their homes anytime soon. He adds that even non-human consumer robotics companies have struggled to capture consumer interest. Saad notes that "the only successful company in the consumer robotics field, iRobot, has not succeeded in launching a second successful product. Pool cleaning robots, lawnmowers, and floor scrubbing and cleaning robots have not achieved the hoped-for success for various reasons."

Future Outlook for the Robotics Sector

Although the robotics sector still needs years to achieve full commercial success for complex robots, such as human-like robots, investors continue to inject capital into this field. While this increased interest may lead to higher deal costs, Winterroth and Saad affirm that this attention represents a net positive development for the industry, as the potential customer base for robotics startups expands. Winterroth concludes: "There are now enough examples of successful robot companies that have transformed into valuable commercial entities. A decade or a decade and a half ago, there was doubt about the existence of a thriving market for these solutions. Now, customer awareness has significantly increased."