Robotics Startups: The Golden Age Beyond AI

The Evolution of Robotics Investment

Seth Winterroth’s decision to leave GE Ventures and join Eclipse in 2015 was driven by a keen observation of the robotics landscape.

He noticed a significant challenge faced by numerous early-stage robotics companies: difficulty securing funding.

Early Struggles for Robotics Startups

Winterroth recounted to TechCrunch that many teams, often comprised of recent graduates from prestigious institutions like Waterloo, CMU, and MIT, were encountering obstacles in attracting institutional venture capital.

The common sentiment expressed by these startups was a struggle to gain financial backing.

At that time, the majority of venture capital in Silicon Valley was directed towards more established application layers or those built upon mature computing platforms.

A Maturing Market

Considerable progress has been made since those early days.

Having spent a decade investing in robotics ventures, Winterroth, now a partner at Eclipse, believes the current climate presents an optimal moment for investment.

The robotics startup ecosystem has demonstrably matured, and the underlying hardware and software have experienced substantial improvements in both capability and affordability.

Increased Venture Funding

Investment activity in the robotics sector is demonstrably increasing.

Data from Crunchbase indicates that $6 billion was invested in robotics startups during the first seven months of 2025.

Projections suggest that total funding for the year will surpass 2024 levels, positioning robotics as one of the few non-AI categories witnessing a funding increase.

The Role of AI and Long-Term Trends

While the recent surge in investor interest can be partially attributed to advancements in Artificial Intelligence, it’s important to note that the robotics industry’s growth isn’t solely dependent on recent AI breakthroughs.

Investors with a longer-term focus in the robotics space emphasize that the current momentum is the result of sustained development over several years.

Industry Growth and Maturation

According to Winterroth, a significant turning point for the robotics industry occurred in 2012 with Amazon’s acquisition of Kiva Systems, a Massachusetts-based startup.

Winterroth stated that the Kiva Systems acquisition effectively spurred the creation of numerous robotic startups. From 2011 to 2016, a surge in new companies emerged, with some, such as 6 River Systems and Clearpath Robotics, achieving success, while others did not.

This initial wave of companies was instrumental in attracting engineering talent to the field and refining the process of achieving product-market fit.

Kira Noodleman, a partner at Bee Partners, corroborated this viewpoint, explaining to TechCrunch that the past decade of experimentation has enabled startups to accurately identify market demands in robotics and automation.

Several companies, including Rapid Robotics – a company Noodleman invested in – experienced setbacks while attempting to determine market needs. However, these failures provided valuable lessons for subsequent startup founders, giving them a clearer understanding of customer expectations.

Noodleman also noted that her own investment strategy evolved as the market reached a more mature stage.

“The concept of fully automated manufacturing, devoid of human involvement, has proven unrealistic,” Noodleman explained. “We observed this during the 2010s.” She illustrated this with the example of machine tending, a task involving a person loading and unloading items from a machine, highlighting the abundance of easily automated, repetitive tasks.

Fady Saad, a general partner at Cybernetix Ventures, established his firm before the recent AI surge, recognizing a need to connect early-stage robotics companies with funding sources during his time at MassRobotics.

Saad also pointed to decreasing hardware costs as a key driver of investor interest, noting that robot construction is now less expensive than it was five years ago. This improved scalability and increased attractiveness to venture capitalists.

“The expenses associated with robotics development have been declining significantly,” Saad emphasized. “Progress in sensor technology, computing power, and battery technology created an ideal moment for developing comprehensive robotics solutions.”

The advancements in artificial intelligence are also contributing to the industry’s growth, though they aren’t the sole factor. While AI is often cited as a primary reason for the renewed interest in robotics – alongside the public’s fascination with humanoid robots – other elements are at play.

Saad clarified that while AI and large language models can aid in robot training, these models primarily rely on online data, whereas robots operate in the physical world.

Several companies are now developing models based on real-world data, as demonstrated by Nvidia’s recent release of world models for robot training in August. However, Saad anticipates that it will take additional time to effectively capture and train robots, particularly those designed to work alongside humans, using real-world data.

Current Trends in Robotics Investment

Although the robotics sector is experiencing growing momentum, not all startups have yet determined the most effective strategies. Furthermore, the level of development varies considerably across different robotics categories.

Industries that were early adopters of robotics and automation, such as manufacturing, warehousing, and construction, continue to attract investment for robotics startups.

Winterroth, Saad, and Noodleman identify healthcare and surgical robotics as particularly promising areas for investment. Noodleman also includes eldercare within this scope.

Noodleman explained that in-home assistance is a compelling prospect, drawing on his decade of experience with industrial robotics. He noted that labor shortages in manufacturing and mining, coupled with aging populations, create a demand where even imperfect robotics offer an improvement over no assistance at all.

Saad emphasized that robotics companies focused on specific verticals often have greater access to practical, real-world data compared to those with a broader focus.

Humanoid robots and consumer robotics, particularly consumer-focused humanoids, are areas where these VCs express less enthusiasm.

Saad questions the immediate consumer desire for robots in the home. He also points out that even consumer robotics companies not focused on humanoid designs have faced challenges in generating consumer interest.

iRobot, the only consumer robot company to achieve significant success, was unable to replicate its initial triumph, according to Saad. Attempts to expand into areas like pool cleaning, lawn mowing, and floor cleaning proved unsuccessful.

While widespread commercial viability of complex robotic models, such as humanoids, remains distant, venture capitalists are increasing their investment in the sector. This heightened interest, despite driving up deal costs, is ultimately beneficial for the industry, as the potential customer base for robotics startups expands, Winterroth and Saad state.

“There are now sufficient examples of commercially successful robotics organizations to demonstrate a viable marketplace,” Winterroth observed. “Fifteen years ago, the existence of a large and thriving market for these solutions was uncertain. Today, customer awareness is significantly higher.”

Investment Focus Areas

Attractive Sectors

• Manufacturing
• Warehousing
• Construction
• Healthcare
• Surgical Robotics
• Eldercare

Less Attractive Sectors

• Humanoid Robots
• Consumer Robotics (especially humanoids)

Vertical-focused robotics companies benefit from access to more tangible data, according to Saad. This data is crucial for development and refinement of robotic solutions.