There was a brief, beautiful moment for a few months in 2021 when it seemed that robotic investing might be immune to broader market forces. We all fundamentally and implicitly understood that this was not the case, but it was a wonderful moment nonetheless.
True, there was some insulation. There was enough forward speed to keep cruising for a while, even as the headwinds increased. But everything eventually comes down to earth. Now that we’re about a month into 2023, we can start assessing the damage. Looking at this graph Collected by CrunchbaseThings seem fairly stylish.
A few top line points:
- 2022 was the second worst year for robotics investment in the past five years.
- The figures have declined fairly steadily over the past five quarters.
According to the first point, 2020 was the minimum. It was also an anomaly with the global pandemic. Uncertainty does not breed investment confidence. The full-year picture is even more interesting considering how investor confidence expanded early last year. Things really started to slow down in Q2. A cursory look at the bar graph might suggest that 2021 is an anomaly. Yes and no. Yes, as far as acceleration. No, as far as the long view. The question is not if those bars will start rising year after year, but when.
The same thing that stalled investments in 2020 accelerated them next year. Even as things reopened, jobs were increasingly difficult to fill, and companies across the board were in a desperate push to automate. As nice as it may be, we’re not yet ready to classify automation and robotics as “recession-proof.” However, I suspect that those who control the purse strings fundamentally understand that these downward trends are more a product of the macroenvironment than something specific to robotics.
For some early-stage startups, however, this is cold comfort. Many runways have been shortened dramatically this year. Solace may come somewhere down the road, but decisive action is needed in many cases who are suddenly unable to stop a round that seemed like a foregone conclusion 12 months ago.
Given the choice between being acquired and closing that some will inevitably face, M&A activity seems likely to increase. Sure there’s less money floating around, but few people can pull off a good fire sale. In some cases, this can lead to strengthening products and portfolios.
Anecdotally, I see investment picking up for the year, but that seems to be part of the normal cycle of companies waiting until after the holiday announcement. On the other hand, an exact bounce back seems inevitable, but only high-powered crystal balls can tell exactly when.