As China Invests in Robotics, iRobot and Other Companies Eye Deals
China emerged as a manufacturing powerhouse over the past few decades, thanks in large part to a deep pool of cheap labor. Now, the country is investing heavily in factory automation, and Boston-area robotics companies and their allies smell opportunity.
Executives from 11 New England robotics firms will travel to several cities in China later this month on a trade mission aimed at sparking business deals and more technology collaboration between the U.S. and China.
The trip is being organized by InTeahouse, along with local nonprofit robotics support group MassRobotics. InTeahouse, founded last year by entrepreneur Xin Liu, is trying to build a global network of entrepreneurs and investors. The organization currently has offices in Hangzhou, China, and Cambridge, MA, and it runs a $30 million venture fund and a co-working space in Cambridge.
InTeahouse and MassRobotics promoted the trade mission during a reception Thursday at the Massachusetts State House in Boston.
“We’ve found interest from Chinese local governments and investors looking at the U.S. as leaders in robotics,” InTeahouse chief operating officer Christian Na (pictured above) says in an interview.
|Companies Going to China|
The 11 companies going on the trip are a diverse group. There are large, well-established firms, such as iRobot and Vecna Technologies. There are also small, young startups, including Soft Robotics and GreenSight Agronomics. The companies’ products span floor-cleaning robots, machines that automate assembly line and warehouse operations, drones for monitoring crops and golf courses, humanoid robots that interact with autistic children, and delivery robots that wheel around hospitals, hotels, and pharmacies.
The China trip is an opportunity for the smaller firms to potentially score investments, customers, and business partners. For a company like iRobot, which already has offices in China, it could lead to deals that expand the company’s sales there, Na says.
“It’s a stepping stone to further collaboration,” says MassRobotics executive director Tom Ryden.
China is “surprisingly behind” in the shift to factory automation, Na says. According to a June report by the Financial Times, China has 36 robots per 100,000 manufacturing workers, versus 292 robots per 100,000 human laborers in Germany, 314 in Japan, and 478 in South Korea. But China is investing heavily to close that gap, buying more factory robots than any other nation over the past several years, the Financial Times reported.
Although factory automation is driving much of China’s spending on robots, Ryden also sees opportunities for local robotics companies in areas such as consumer technology, agriculture, and home healthcare, especially given the country’s aging population. But it will take years for some of those technologies, like personal home assistants, to advance to the point that they’re ready for broad adoption, he adds.
In recent decades, business deals between the U.S. and China often involved American companies investing in Chinese manufacturing operations. Now, we’re seeing more of “the reverse flow,” Na says, as Chinese investors eye deals in U.S. automation-tech hubs like Boston. (Haiyin Capital, for example, has invested in local startups Neurala and Soft Robotics.)
“I think that will continue as China investors look to invest in stable and higher-growth sectors outside of their country,” Na says.
InTeahouse currently employs about 10 people at its offices in China and Cambridge. But the plan is to grow to more than 30 locations worldwide by the end of 2017, Na says. He mentions possible U.S. offices in the Bay Area, Chicago, Seattle, Austin, TX, and Washington, DC, as well as outposts in Europe, Israel, and Australia.