“Robotics is a hot area,” says Dominic Keen . “A lot of entrepreneurs are moving into the space.”
And who can blame them? The first wave of robotics transformed the manufacturing sector by automating production line tasks that had been previously carried out by skilled and semi-skilled workers. The next wave - driven in part by falling component costs and the rapid advance of artificial intelligence - is set to have a much bigger impact on a greater number of people. Over the next few years we’ll begin to see driverless cars on public road, robot assistants dolling out medicines in hospitals and care homes, and AI-driven systems either replacing or supporting staff across a broad swathe of industries. Indeed, it seems inevitable that robotic systems will transform not only working life, but also the way we organize society.
Here in the Britain, policymakers have identified robotics as one of eight key technologies, and there is a significant amount of support for the sector through government- funded agencies such as Innovate UK. Equally important , many of Britain’s universities have become centers of research excellence and since 2015, the work of leading institutions has been coordinated and promoted through an academic network set up by the Engineering and Physical Sciences Research Council.
A Lack of Champions
In theory then, the UK is set fair for a golden age of robotics, with technology entrepreneurs playing their part in developing new and disruptive products. But as Keen points out: “The UK has yet to produce a company that could be described as a robotics champion.”
As Founder of the British Robotics Seed Fund - launched last year - Keen has been playing a role in sourcing and providing finance for startups in the sector and to date the £500,000 fund has invested in five businesses.
But as he acknowledges, investing in robotics - at least via a fund - is something of a rich man’s game. “The regulation surrounding funds meant that we could only offer exposure to High Net Worth individuals,” he says. Working on the assumption that a much wider community of investors might want a piece of robotics and AI action in their portfolios, Keen has set up a specialist equity crowdfunding platform, dubbed Britbots Crowd. “Mainstream investors are interested in robotics.Through crowdfunding, we are offering them a way to get exposure,” he says.
Acknowledging that this is a niche offering, Keen expects the platform will have completed two or three deals by the end of the year. “I think we will probably have about four of five companies pitching on the platform at any one time," he adds. The remit is fairly wide - ranging from AI software and supply chain items (such as components) through to products developed for sale to end users. And in keeping with the classic crowdfunding ethos, the platform is open to those with only relatively modest sums to invest. “We encourage companies pitching on the platform to put the minimum investment at around £200,” he says. “That means that an investor who has £1,000 could buy equity in five companies.”
A Different Focus
So why is such a platform needed, given there are plenty of other crowdfunding platforms in the UK marketplace, all with established investor communities? “Crowdfunding platforms tend to lend themselves to consumer-focused businesses," says Keen. “Raising money is more difficult for business that aren’t addressing the consumer market.”
Britbots Crowd is addressing a smaller, more specialist investor community. Keen predicts that many investors will be technically minded, with an interest in robotics, although he stresses that participating startups should ensure their propositions are clear and intelligible, even to a non-technical audience.
If You Build It They Will Come
The UK equity crowdfunding market is crowded, with both specialist and generalist platforms, all competing to attract investors. But Keen believes the specialist nature of Britbots Crowd will ensure it has an audience. “What we found with the fund was that people with an interest in robotics gravitated to it - and we believe the same will happen here. But we will also be doing some Google marketing.”
Neither the seed fund itself, nor the new crowdfunding platform will solve the bigger problem that faces at least some robotics businesses - namely how to bridge the yawning funding gap that tend to open up just at the point when larger sums of money are required to, say, move beyond a prototype stage and establish real traction in the market.”
In the case of British Robotics Seed Fund, Keen stresses that part of the remit is to not only supply cash but also to help companies position and present themselves, so they are better able to attract investment from other parties. Looking ahead, a planned second generation fund will provide some follow on funding. Meanwhile one company - Zoa - which has raised capital through the Seed Fund - is using the crowd platform to source additional finance.
But as Keen points out not all companies need large amounts of investment. “Some businesses are rockets - they require a lot of fuel to leave the atmosphere,” he says. “Others are like planes - they are less hungry."
Equity crowdfunding isn’t new and nor is the concept of a specialist platform. But with robotics and AI now established as a hot investment sector, Keen is hoping Britbots Crowd will prove attractive to an audience of investors that is keen to play a role in backing technologies that might not get a hearing on more generalist crowdfunding sites.
