Robotics might be ‘bigger than industrial revolution,’ Lightspeed Partner says

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Investors have lasered in on startups aimed at helping untangle global logistics and supply-chain snarls. Among these startups are robotics firms focused on automating various steps of the supply chain.

In October, Raviraj Jain, a partner at Lightspeed Venture Partners, led his firm’s investment in a $140 million funding round into Dexterity Inc., a startup developing a robotic grasping tool for use in warehouses. Mr. Jain talked with WSJ Pro about the impact he believes robotics will have on logistics. Below are excerpts from a phone interview.

WSJ Pro: What is robotic technology’s role in helping mitigate the supply-chain crunch and when are we going to see those efforts pay off?

Mr. Jain: In the last five to six years, there have been some massive strides in the world of robotics thanks to the evolution and development and improvement of computer vision, hardware costs going down and thanks to [computing power] getting cheaper and readily available.

Now in robotics, at least at the frontiers of it and with the best companies, it’s finally getting to a point, or gotten to a point, where it can start creating pretty tangible value and driving solid efficiencies in the ecosystem.

Anyone who’s promising automation in warehouses five to 10 years later is actually too late.

WSJ Pro: What robotics applications have investors come to a conclusion aren’t working out and which ones are becoming obvious will work out?

Mr. Jain: If it’s a semi-structured environment, where there is some amount of repeatability, I think that that’s where robotics applications can work. So I think warehouses are just the biggest opportunity for robotics in my mind for automation. But there may be others around inspection and things like that, where you could potentially use robots to do very defined tasks.

The world is full of examples of people promising robots which will do a divergent amount of tasks that never happen because a robot that works 60% of the time is not the robot. It’s a useless robot.

WSJ Pro: PitchBook data says that through Q3, AI exits have topped $166 billion, more than triple 2020’s total value for VC exits. What’s the exit environment like for robotics startups?

Mr. Jain: I don’t look at macro overall and I don’t know what these $166 billion in exits are.

I could tell you that it is my belief that AI and robotics has the potential to be the single largest activity enhancement driver for our generation. I think it should be bigger than the industrial revolution.

WSJ Pro: Are there parts of the robotics sector that you see as overfunded and/or underfunded?

Mr. Jain: I think that funding in robotics will increase and companies like Dexterity will show the world the massive value that robotics can bring to the table. As a result, we will see a $100 billion robotics company in this decade.

I think late-stage investors sometimes have to see the proof and I think the proof is coming in with some of these companies really scaling, and I think that will unlock so much more funding going forward.

WSJ Pro: Are valuations in robotics startups where they should be right now?

Mr. Jain: The question is, are investors really able to suss out what is the right approach in robotics and what is really going to see the light of day and be in production. Because so many companies just stay in labs or stay as [proof of concepts] forever.

Crossing the chasm from being a robot that can do some things some of the time to being a robot that can do tasks reliably and scalably in production, driving ROI—that is highly undervalued.

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