Companies like Nvidia and SoftBank focus on industrial robotics as a key area of future R&D, so startups today are different to how AI is being used in factory room floors. We raised funds for the aspects.
They have developed AI-based hardware to identify the machines need repairs and what’s wrong, raising $75 million in funding. The company will continue to develop technology that uses this money to bring new customers and measure vibration, sound, temperature and other factors.
The company has monitored over 5 billion hours of machine operations so far, covering a wide range of equipment manufacturers and machining. “We have the largest dataset of mechanical signals,” CEO and founder Saar Yoskovitz said in an interview. He calls this set of information a “malfunction dictionary.”
“We don’t need to build a model of a particular machine if we have a pump in our factory because we’ve seen over 20,000 pumps before,” he said.
The stock investment is the first tranche of the Series F round, which the company is still closing. Yoskovitz said the final amount is likely to be around $100 million and the round should be completed within the coming months. He declined to comment on the company’s ratings except that this is an upround and confirms that the startup is over $1 billion.
Lightrock leads this round. Participating investors include Insight Venture Partners, Eclipse Ventures, Munich Re Venture Capital, Qualcomm Ventures, Lerer Hippeau Ventures and Quamra Capital (which led the 55 million rounds in 2020).
Since Augusty last raised funds in 2021, fundraising has continued into a strong business wave. Its revenues have increased five times, with its customers including major manufacturers such as Pepsico, Nestle and Dupont, as well as several gas and energy companies. Partnership with Baker Hughes, one of the strategic investors.
As Yoskovitz explains it, the Covid-19 pandemic has focused supply chains all over the world. All the talks were about “digital transformation” at the industrial level, but that cycle is because expensive equipment is rarely destroyed if it is still working or simply requires minor modifications. A typical life cycle can last for decades in an industrial environment.
That’s where Augusty comes in. That sensor sits effectively inside or with the machine, listening and observing how they work. The company then uses that data to train the algorithm to understand that the machine is not working and understand what is wrong.
This algorithm serves as a guide to factory workers who can modify machines. Those people can one day be replaced with robots, but they will still need data to understand what to do.
But for now, it sounds like there are few robots used by Augusty customers. Yoskovitz said about 80% of its deployments are in legacy, “brownfield” environments, while the remaining 20% is in the recently built “Greenfield” factory. More modern equipment (often not yet exist in robotics).
While Augusty’s technology can be argued that AI is another example of taking jobs from people, Yoskovitz offers a different view. “The biggest challenge facing the industry is actually a lack of talent. There is a gap. There is an older workforce, and all professionals will be retiring in the next five to six years. At the same time, no one will manufacture. I don’t want to work in the business, so I don’t have the next generation in it.”
But he added that when these new people enter the space, they will know that there are fewer generations than they have come before.
Augusty’s solution is to “digitize knowledge” to help factories and people working within them, and then repair equipment.
Lightrock, the leading investor in this round, focuses on sustainability investments, which became an interesting area last year. It’s not because of opportunity and optimism, but against.
Paul Murphy, general partner at Lightspeed, put together the situation well in a passionate discussion called “Rip Climate Tech.” He said effectively, regulatory and political climate change will result in numbers for startups and investors who view sustainability as an altruistic goal.
The next step should be focusing on companies that will address this and build solid businesses for those who want to keep spending money behind their sustainability goals.
This is effectively where Augusty sits and is one of the reasons Lightrock invested.
“It’s amazing, machines installed in factories run for 20 or 40 years. It’s a huge maintenance involved, so they don’t change many parts of the factory. They completely make the machine work. We don’t rip and exchange it,” said Ashish Puri, Lightrock’s partner who led the contract. VC companies mark sustainability as an important focus for investment, and Puri describes it more specifically as “sustainable capitalism.”
“Augury is a great example of a business that marries a productivity and a green approach,” he said.
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