Major financing for RaaS Formic

Not only in Germany have there been some interesting transactions recently, but also in the USA. Chigaco-based Formic Technologies Inc. has received $26.5 million in Series A financing and $100 million in debt to fund equipment purchases. The company was just founded in 2020 and offers cobots and industrial robots at fixed hourly rates (Robotic-as-a-Service). Formic's "turnkey" service includes everything from planning to deployment to maintenance - without risk. Thus, the entry threshold for potential users is extremely lowered.

Confirmation of the new Franka strategy?

This extremely high level of funding can probably also be seen as confirmation of the approach of the new Franka Emika managing director Alwin Mahler. However, Formic relies on hardware from Universal Robots, FANUC, KUKA, and ABB and thus on robots that often cost significantly more than a Franka. When Franka is used, the capital commitment for the customer is therefore lower. With Franka, it is still open whether RaaS also includes the peripherals typically required. Of significance for the cobot sector is the fact that Formic offers Universal Robots, a pure cobot manufacturer, among its four robot brands. This can also be seen as market confirmation.

Scaling will be important

In order to spend nearly $130 million on many different projects, many integrators will be important. Costing will also be difficult. Scaling the applications therefore appears to be important. For this to succeed, Formic should achieve higher market shares in standard applications such as palletizing or even welding. However, Formic is open to integrators. I find it remarkable that investors got in after Corona. After all, Corona has certainly shown the risk of RaaS - for example, if the belts come to a standstill overnight or there are more bankruptcies.

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The author of this blog is significantly involved in the AI/robotics project Opdra. He advises robotics companies and investors on market analysis and funding/subsidies. More about him can be found here.