Smart Cars to Future Factories: How small companies can make big waves in automation

Maryanna Saenko

Analyst

ACAMP Robotics Seminar

June 3, 2015

Lux Research overview

Helps clients find new business opportunities from emerging technologies in physical and life sciences

Offers ongoing technology and market intelligence, as well as market data and consulting services

Over 250 clients on six continents – multinational corporations, investors, governments, and SMEs

Global reach, with offices in Boston, New York, Amsterdam, Singapore, Shanghai, and Tokyo

Combines deep technical expertise with business analysis to support strategic decisions

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Coverage areas

Advanced Materials Agro Innovation Alternative Fuels Autonomous Systems 2.0 Bio-based Materials & Chemicals Bioelectronics Efficient Building Systems Energy Electronics Energy Storage Exploration and Production Food and Nutrition Printed, Flexible, and Organic

Electronics Solar Sustainable Building Materials Water China Innovation

Large companies tend to dominate the robotics landscape

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Finding the opportunity for start-ups and SMEs

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$102 Billion market in partial automation for vehicles

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Parking Assist, Blind spot detection

Adaptive cruise control, lane merge assist, windshield wiper control, forward collision warning

Autonomous parking, highway autopilot

Tesla claims new highway autopilot features

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Basic Assist Enhanced Assist Partially autonomous Fully autonomous

Google’s iconic “car” lacks a steering wheel and pedals

$102 Billion market in partial automation for vehicles

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Sonar

Carmaker profits

Connectivity and apps

Maps

Software

Wireless hardware

Computer hardware

Wiring

Optical cameras

Lidar

Radar$0

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Connectivityand apps

Software

Wirelesshardware

Opticalcameras

Lidar

$65 Billion opportunity by 2030

Where do SME’s fit in the automotive value chain

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30 meters 30 60 120 150 300

CMOSRadarlidar

CMOS

CMOSIR

Radarlidar

Far IR

CMOSRadarUltrasound

CMOSRadarUltrasound

CMOSRadar

CMOSRadar

CMOSCCDRadar

The automotive market is looking for partnerships and acquisition targets

2014 saw a wave of consolidation and investment in the automotive sensor market:

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49% stake

Acquired for $12.4 B

Exclusive license

Partnership for V2X

antennas

$30 Million Series A $8.5 Million Series A

Finding the opportunity

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Investment in UAVs surges

Big and small players alike are benefiting from recent venture capital interest in UAVs. Funding of drone startups more than doubled in 2014.

The table below summarizes recent investments in drone companies:

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Company Investment Series CloseDate

Total Raised

Investors

DJI $75 million Series C May 2015 $105 million Accel Partners, Sequoia Capital

3D Robotics $64 million Series C April 2015 $99 million Atlantic Bridge, SanDisk Ventures, SK Ventures, WestSummit Capital, Shea Ventures

Airware $25 million Series B July 2014 $40.4 million GE Ventures, Google Ventures, Shasta Ventures, Lemnos Labs

Skycatch $5 million Debt DebtFinancing

April 2015 $24.7 million Google Ventures, ff Venture Capital, Ram Shriram, Richard Levandov, Ellen Levy, VegasTechFund, Urban.Us

DroneDeploy $9 million Series A March 2015 $11 million AngelPad, Data Collective, SoftTech VC, Emergence Capital Partners, Redpoint Ventures, DFJ Fund

Precision Hawk $10 million Series B September 2014

$11 million Intel Capital, Bob Young, Millennium Technology Value Partners, Innovate Indiana Fund

Sky-Futures $3.8 million Series A May 2015 $3.8 million MMC Ventures

CyPhy Works $2.5 million Debt Financing

March 2015 $12.5 million Motorola Solutions, Lux Capital, Felicis Ventures, General Catalyst Partners

Valued at $8 Billon

2013 Units 2013 Revenue 2014 Units 2014 Revenue

110,000 $130 Million 400,000 $500 Million

Application-specific UAV companies emerge in force

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Agricultural drones are primarily focused on land surveillance, and in particular, providing data like the normalized difference vegetation index (NDVI) to help farmers make better decisions regarding crop health.

Oil and gas drones are largely utilized by companies for pipeline inspection, often using NDVI to track where vegetation is dying, as this can serve as a proxy for identifying potential leaks.

Construction drones track progress of construction sites, particularly in areas where it is dangerous for a human to venture, as well as serve as security surveillance systems.

Media/real estate drones primarily capture aerial photography and videography for marketing campaigns at a significantly lower cost than manned systems.

Utilities drones complete routine inspection tasks and companies can potentially use them to do initial surveying following a disaster to inform which areas require immediate assistance.

Logistics drones are last-mile delivery platforms for lightweight packages – typically under 5 lbs. – over short distances. They receive the greatest criticism from a regulatory and safety standpoint.

4Front Robotics

Aeryon Labs

AgEagle

Agribotix

Airphrame

Archon Dronistics

AutoCopter

CyPhy WorksFlirtey

Flyability SA

Flyver

FuVeX

Identified Technologies

ING Robotic Aviation

Matternet

Meteomatics

PrecisionHawk

Quadplane

SkySpecs

3D RoboticsDJI

Parrot

AeroVironment

Propeller

DroneDeploy

Skycatch

Volt Aerial Robotics

Airware

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3

5

1 3 5

Tec

hn

ical

Val

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Business Execution

Dominant

Undistinguished

High-potential

Long Shot

Top players today

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4Front RoboticsAeryon Labs

AgEagle

Agribotix

Airphrame

Archon Dronistics

AutoCopter

CyPhy Works

Flirtey

Flyability SA

Flyver

FuVeX

Identified Technologies

ING Robotic Aviation

Matternet

Meteomatics

PrecisionHawk

Quadplane

SkySpecs

3D RoboticsDJI

Parrot

AeroVironment

Propeller

DroneDeploy

Skycatch

Volt Aerial Robotics

Airware

1

3

5

1 3 5

Tec

hn

ical

Val

ue

Business Execution

Dominant

Undistinguished

High-potential

Long ShotStrong Positive 1.0 - 1.9

Lux Take Maturity

Caution 4.0 - 4.9

2.0 - 2.9Positive

Strong Caution 5.0

3.0 - 3.9Wait-and-See

4Front Robotics

Aeryon Labs

AgEagle

Agribotix

Airphrame

Archon Dronistics

AutoCopter

CyPhy WorksFlirtey

Flyability SA

Flyver

FuVeX

Identified Technologies

ING Robotic Aviation

Matternet

Meteomatics

PrecisionHawk

Quadplane

SkySpecs

3D RoboticsDJI

Parrot

AeroVironment

Propeller

DroneDeploy

Skycatch

Volt Aerial Robotics

Airware

1

3

5

1 3 5

Tec

hn

ical

Val

ue

Business Execution

Dominant

Undistinguished

High-potential

Long Shot

It’s OK to take risksCase Study: Matternet

Technology

Network of (UAVs) to transport goods; initially targeting places with non-existent road infrastructure

Initial focus on developing nations with completed field trials in Haiti, the Dominican Republic, and Bhutan

Recently received approval to begin testing in Switzerland

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Location: Mountain View, CA,USA

Founded: 2011

Stage: Development

Employees: 12

Partnerships:• Partnered with the World

Health Organization, as well as the governments of Bhutan, the Dominican Republic, Haiti, and Switzerland

• Revenue: $0 (estimate)• Cash: $1 million (estimate)

Lux Take: Wait and See

System capabilities and concerns with business plan and deployment strategy were major red flags

Field trials in countries with few regulations served as a huge boon for the company and allowed it to enter the European market

Finding the opportunity

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Industrial robotics sales are on the rise

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Source: MIT Technology Review

There is room for innovation in industrial roboticsCase Study: Universal Robots

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Technology

Designs and manufactures small robot arms, the UR5 and UR10, which can lift 5 kg and 10 kg respectively.

Systems are designed to work seamlessly with humans, enabling operation in a cage-free workspace.

Cost is $34,000/device

Location: Denmark

Founded: 2005

Stage: Scale

Employees: 110

Partnerships:• Johnson and Johnson, BMW,

Volkswagen, Bosch and Siemens

• Revenue: $38 million (estimate)

Lux Take: Positive

Focus on GUI and ease-of-programming caused the company to gain early uptake

Product is not perfect, but was sufficiently suited to basic tasks and came at an attractive price point

A clear acquisition target as the company was taking on more orders than it could fill with its small size

Teradyne acquires Universal for $350 million

UR shipped 1,623 robots in 2014

2014 sales of $38M were 70% greater than in 2013

$285 million in cash, another $65 if expectations are met by 2018

Acquisition was 7 x UR’s 2014 revenue

Sold a total of 4,000 robots to date17

Source: Teradyne *Danish GAAP translated at period exchange rate

Universal is just the latest acquisition in a growing trend

Acquisition for undisclosed amount

GomTec is a 25 person company

Six-axis modular collaborative robots with base pricing between €27,900 and €32,700

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$357 million acquisition

Swisslog acquisition adds a mobility arm to KUKA’s arsenal

Second major acquisition by KUKA in 2014 - also acquired systems integrator Reis Robotics

Rulebook for robotics companies

There is opportunity in every sector of robotics

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Capitalizing on it will involve finding the gaps –don’t reinvent the wheel!

Start with the minimum viable product

$102 Billion

$5 Billion

$40 Billion

Navya’s shuttle is one of the UK’s driverless car projects

500,000 sold$15.5 million in funding

Lux Research Inc. 100 Franklin Street, 8th Floor Boston, MA 02110 USA Phone: +1 617 502 5300 www.luxresearchinc.com

Thank you

Maryanna Saenko Analystmaryanna.saenko@luxresearchinc.com+1 (617) 502-5336