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This is never a fun recap to write. We don’t want to see startups shut down, but inevitably, many do. The last couple of years have been especially difficult, but perhaps some lessons can be learned from those that didn’t survive.
There are many reasons robotics companies fail. From an ill-conceived idea to poor execution, tough economic headwinds or the inability to raise funding, building and running a sustainable robotics company is challenging.
Here are some of the robotics companies we lost in 2023.
Everyday Robots (2021-2023)
Alphabet, Google’s parent company, shut down its subsidiary Everyday Robots in February. This was part of a larger layoff at Alphabet in which it cut 12,000 workers, or 6% of its workforce.
Some of the technology and part of the Everyday Robots team was consolidated into existing robotics projects within Google Research. Everyday Robots employed over 200 people, but Alphabet did not give any details about how many of those employees stayed on.
The company graduated from Alphabet’s X moonshot lab and taught over 100 wheeled, one-armed robots to clean cafeteria tables, separate trash from recycling and open doors. While the robots were steadily improving their capabilities, they never reached the commercialization stage.
The decision to close Neato was part of a restructuring strategy for Vorwerk, which will focus more on selling vacuums and other robots in its Germany office. Vorwek Group said it will support Neato’s cloud-based service and ensure the availability of spare parts for the next five years.
Neato Robotics was founded in 2005 and became one of iRobot’s top competitors. The California-based company differentiated itself with a unique “D” shaped design that it claimed allowed its robots to more precisely clean corners and other tricky areas.
Karakuri, a startup that used robots to assemble meals for food industry clients, closed in June. The company offered its FRYR family of automated fry lines and SEMBLR, an automated meal assembly system that can serve a wide variety of ingredients and cuisines.
Karakuri spent the last several months before the shutdown trying to secure additional funding. It was negotiating with Henny Penny, a food-service equipment manufacturer, but the talks fell apart.
In a statement, Karakuri said: “After extensive negotiations with potential investors and acquirers to explore all possible options for the business, we’re sorry to report that Karakuri has been unable to secure the funding required to continue our developments and bring our products to market.”
Karakuri was founded in 2018. Ocado bought a nearly 20% stake in the company in 2019 for around $6 million.
Zume, a Silicon Valley-based company, shut down over the summer. The company had raised $445 million in venture capital funding, including $375 million from SoftBank in 2018 at a $2.25 billion valuation. It once focused on making pizza with robots, but it pivoted away from that in 2020 to focus on sustainable packaging.
Zume burned through its funding by 2020 and laid off more than 50% of its staff when pivoting its business to sustainable packaging. Zume acquired a company called Pivot Packaging that specialized in producing compostable food containers made from materials like bamboo and wheat. Nonetheless, Zume wasn’t able to turn this into a sustainable business.
Skydio’s consumer drone business
To be abundantly clear, Skydio as a business is alive and well. But over the summer, it shut down its consumer drone business to focus on its enterprise and public sector customers. While the company is no longer offering its Skydio 2+ Start, Sports, Cinema, or Pro Kits, it continues to provide software and customer support for existing customers.
This was a major blow to the consumer drone industry. Especially in the U.S.
In February 2023, Skydio raised $230 million in Series E funding, bringing the company’s total funding to $562 million. In March 2021, Skydio was the first US drone maker to reach unicorn status after its Series D funding round.
Skydio’s drones are used by every branch of the U.S. Department of Defense, by over half of all U.S. State Departments of Transportation, by over 200 public safety agencies in 47 states and across more than 60 energy utilities.
XACT Robotics (2013-2023)
Medical robotics provider XACT Robotics laid off all of its 65 employees and shut down in September. The Israeli company developed autonomous robots for performing hands-free surgery.
Harel Gadot, formerly an executive at Johnson & Johnson, and Yossi Bornstein, who founded and managed Shizim Medical Devices, founded XACT in 2013.
The company’s needle-steering technology was designed for minimally invasive interventional procedures, such as biopsies and ablations. The technology used a five-degree-of-freedom robot, ongoing needle path calculation, and real-time closed-loop control.
But the system failed to generate significant revenue. XACT also failed to raise new funding. The company was in talks to be acquired, but that deal also fell through. XACT raised about $60 million since it was founded, including $36 million in 2019.
PrecisionHawk, a Raleigh, N.C.-based developer of commercial drones, shut down in December. It voluntarily filed for Chapter 7 bankruptcy about $17 million of debt and assets of about $3.8 million.
Founded in 2010, PrecisionHawk was once a promising drone startup. It raised more than $136 million since its inception, including a $32 million Series E round in 2019.
The company offered an integrated platform of drone and sensor hardware and flight and analytics software services. The data was collected by the drones and turned into actionable intelligence using the company’s software. PrecisionHawk also developed uncrewed aircraft traffic management (UTM) systems to help integrate drones into the airspace.