Otto Motors, a company providing self-driving robot technology and services for research and industrial clients, this week announced it closed a $29 million financing round. Matthew Rendall, CEO of Otto parent company Clearpath Robotics, says the proceeds will enable the company to meet the needs of its customers both during and after the pandemic.
Worker shortages caused by the spread of coronavirus have prompted some retailer, fulfillment, and logistics companies to accelerate the rollout of mobile robots. For instance, Gap more than tripled the number of item-picking machines it uses to 106 in total, while Amazon says it’s relying more heavily on automation for product sorting. According to ABI Research, more than 4 million commercial robots will be installed in over 50,000 warehouses around the world by 2025, up from just under 4,000 warehouses in 2018.
Otto is well-positioned to address the surging demand — it provides autonomous mobile robots for materials handling inside manufacturing and warehouse facilities, with clients including GE, Nestle, and Berry Global, among others. Perhaps predictably, the company says it’s seen increased interest from businesses responding to risks associated with the pandemic, including those in food, beverage, and medical device fabrication segments.
“The coronavirus pandemic has really put the spotlight on business continuity,” said Rendall in a statement. “Businesses that invested in automation are still up and running, and others are realizing they need to catch up. We’re seeing manufacturers that had five-year implementation plans are compressing those to one or two years.”
Otto spun off from Clearpath, a company founded in 2009 by University of Waterloo graduates who initially sought to develop a robot that could detect and remove land mines. (Clearpath continues to provide less productized services for research firms.) The Otto team built its first prototype in 2014 — a driverless vehicle for automating material movement — before shifting mostly to industrial applications, like transporting raw materials to production lines and moving parts between processes.
Today, Otto provides the Material Movement Platform, which comprises Autonomous Mobile Robots (AMRs), Fleet Manager, and Otto Care. Otto’s AMRs come in three configurations, from the Otto 100 (which has an integrated lift and can carry up to 220 pounds) to the Otto 1500 (which has lift and conveyor attachments and can carry over 3 tons) — all of which feature lidar sensors that scan, monitor, and interact with the environment. As for Otto Care, it’s a support offering that includes access to firmware upgrades and live technical support, optionally with annual hardware and software maintenance for AMR fleets.
Fleet Manager handles tasks like robot traffic control, job supervision, management, and facility integration, continuously mapping facilities to visualize where AMRs might be. It lets managers customize the way robots move throughout a building by applying rules like setting speed limits or marking out heavy pedestrian areas, and it continuously processes data about the fleet to keep track of every robot’s status (including charge level, location, payload, vehicle capability, and team). Fleet Manager intelligently assigns jobs like material pickups and dropoffs as well as battery charging, notifying managers about job times and throughput via Slack and other platforms. And it connects with existing systems through protocols like HTTP Rest and WebSockets.
Otto competes in the $3.1 billion intelligent machines market with Los Angeles-based robotics startup InVia, which leases automated robotics technologies to fulfillment centers; Gideon Brothers, a Croatia-based industrial startup backed by TransferWise cofounder Taavet Hinrikus; robotics systems company GreyOrange; and Berkshire Grey, which combines AI and robotics to automate multichannel fulfillment for retailers, ecommerce, and logistics enterprises. Fulfillment alone is a $9 billion industry — roughly 60,000 employees handle orders in the U.S., and companies like Apple manufacturing partner Foxconn have deployed tens of thousands of assistive robots in assembly plants overseas.
But Otto has cutting-edge partners in companies like Boston Dynamics, with which it collaborated to develop an automated box-picking and pallet-building solution. And business is booming, with over 70% of the company’s AMR installs in recent months heading for Fortune 500 customers and a growth rate over the last three years of between 70% to 100%. (According to Rendall, Otto has over 3,000 robots deployed worldwide.)
At GE Healthcare’s repair operations center near Milwaukee, which tests the functionality of medical equipment and manages warranty service programs, Otto self-driving vehicles are loading and delivering parts to workers for repair and dispatching materials to shipping. At Toyota Motor Manufacturing Mississippi, an Otto 1500 robot is handling ground tire delivery within the Corolla assembly plant. And recently, Otto deployed a fleet of 19 robots at a Berry Global Group plant in Kentucky to supply cases to and from automated production machines 24 hours a day.
“Our mission to ensure a safe and productive work environment, along with the challenges of persistent labor constraints, has led us to increase investments in creative automation solutions,” Berry Global director of corporate automation Scott Spaeth said in a statement. “The Otto vehicles address those challenges and deliver improved operations reliability, while enhancing the working environment for our employees.”
Otto’s latest fundraising round — a series C — was led by Kensington Private Equity Fund with participation from BMO Capital Partners, Export Development Canada (EDC), and previous investors iNovia Capital and RRE Ventures, bringing the company’s total raised to $83 million. At least of portion of it will be used to expand the company’s workforce from 260 employees across tech, product, sales, marketing support, and account management teams, Rendall says.