What We Thought Was Happening With Robotic Investing Is Definitely Happening TechCrunch
There was a brief, beautiful moment for a few months in 2021 when it looked like robotic investments might be immune to broader market forces. We all basically and implicitly understood that wasn’t the case, but it was still a good time.
The truth is, there was a bit of insulation in there. There was still enough forward momentum to keep sailing a bit, even if the headwinds increased. But everything ends up falling on Earth. Now that we are about a month away in 2023, we can begin to assess the damage. Looking at these charts put together by Crunchbase, things look pretty bleak.
A few main points:
- 2022 was the second-worst year for robotics investment in the past five years.
- The numbers have been falling fairly steadily over the past five quarters.
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 the lingering investor sentiment that lasted until early last year. Things really started to slow down in the second quarter. A quick look at the bar chart might suggest that 2021 is an anomaly. Yes and no. Yes, as far as acceleration is concerned. No, as far as the long-term vision is concerned. The question is not whether these bars will start to grow from year to year, but when.
The same thing that stalled investments in 2020 accelerated them the following year. Even when things reopened, jobs were getting harder and harder to fill and businesses in every field 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.” I suspect, however, that those in control of the purse strings fundamentally understand that these downward trends are more a product of the macroenvironment than anything specific to robotics.
For some early-stage startups, however, that’s cold comfort. Lots of trails shortened dramatically this year. Solace might come somewhere down the road, but in many cases decisive action must be taken for those who suddenly find themselves unable to close a cycle that might have seemed a foregone conclusion 12 months ago.
Given the choice between acquisition and closure that some will inevitably face, it seems likely that M&A activity will increase. Of course, there is less money circulating, but few people can refuse a good sale. In some cases, this will help strengthen products and portfolios.
Anecdotally, I see investment increasing for the year, but it seems to be part of the natural cycle of companies waiting until after the holidays to announce. A good bounce, on the other hand, seems inevitable, but only those with powerful crystal balls can tell precisely when.