Automatic for the people: BritBots founder Dominic Keen discusses the exciting opportunities in the robotics sector
Robotics is one of the most exciting and fast-changing sectors in the world with incredible advances offering new ways for businesses to work. As significant drivers of growth in the global economy, robotics and automation are helping to increase efficiency in a number of areas. We spoke to Dominic Keen, founder of BritBots, to find out more about what they do, discuss the misconceptions about the sector and talk about the impact the pandemic has had.
Following 15 years of running his own software business, Dominic started to make angel investments in the area of robotics and AI. Taking notice of the advances in the sectors, Dominic realised that entrepreneurs in the space needed more than simply financial help. He explains:
“The more I started making angel investments in the area, it became clear that actually the entrepreneurs needed a bit more help than just the money, particularly in comparison to the area of fin-tech where I had been before. In robotics, a lot of the founders are engineers and maybe first-time entrepreneurs, and so they needed a bit more mentoring as well as the investment.”
It was this observation that led Dominic to set up BritBots – to provide a structured fund with a business support function alongside. The aim was to help entrepreneurs secure funding and to provide the advice and expertise they would need to get their businesses up-and-running.
Since 2016 BritBots has made 18 investments across a variety of sectors. With robotics touching almost every part of the economy, BritBots have identified a number of criteria that need to be met before they’ll invest.
“We categorise the types of products that we back into three groups. We’re either looking for: (i) things that enable robotics; (ii) robotics platforms (which are, as the name suggests, base technologies that can be applied to a variety of different end-use sectors); or (iii) end-use-specific robots that do a very particular task. Once we feel that a company fits into our landscape of the things that we’re looking for, then we’re seeking strong management teams, good defensible technology, and founders we think we can work with, as well as the more normal sort of other criteria for early stage investment.”
BritBots is an SEIS and EIS investor and their approach to investing is based on a co-investment model.
“With the businesses we work with, we typically do the cornerstone investment to bring our specialism but we love working with angel syndicates, or just individual angels who are interested in a particular company. Typically for most of our businesses, angel co-investors represent at least half of the money raised.”
With robotics being an ever-evolving sector, Dominic believes there are lots of reasons why investors should consider investigating the space. He says there are two different commercial models of robotics companies:
“There are two different business models that we typically see. One where it’s effectively substituting a relatively well-known existing task; and another where a robot is used to achieve a completely new capability that doesn’t necessarily exist at the moment.”
Since March the country, and much of the world, has been on lockdown due to the pandemic. It’s impacted on every sector and will change the way we work moving forward for a very long time. With an emphasis on social distancing as society attempts to return to some degree of normality, Dominic thinks that robotics can play a bigger role.
“Robots can help in social distancing and minimising the risk that the virus gets passed person-to-person.”
“Robots can help in social distancing and minimising the risk that the virus gets passed person-to-person. For example, one of our robotics businesses provide care robots for vulnerable adults and offers a whole range of services, which previously would have needed a face-to-face carer, but now are done by the robot. That’s an obvious application of robotics at the moment, but actually more broadly what we see is that typically in recessions companies tend to get rid of quite a lot of their staff. They then quite quickly realise that they still have to do all the job content that they previously had, but with a smaller workforce. There’s an great opportunity for robotics and automation to step in and help companies get more productive when they’ve got pressures on their balance sheets or their costs.”
Like most sectors, robotics has still had to overcome plenty of challenges the past few months. Explaining BritBots’ approach to helping their portfolio, Dominic shares:
“We’ve been repositioning our companies to find a go-to-market model that doesn’t really rely on any face-to-face contact with potential customers. In the past, most of the businesses would have had to go and see a customer a few times before they sold their product and do a few demonstrations, and maybe go to some trade shows. None of that really exists at the moment so they’re all having to think about new ways that they can reach out and get in touch with customer organisations. They’re having to find ways to demonstrate their products and get customers excited about the solutions remotely. That’s a big change in the way that people think about how to sell B2C products!”
He admits that making investments without actually meeting people face-to-face is something that BritBots is reticent to do but he understands that may become necessary in the future depending on how the pandemic continues to unfold.
During our conversation, talk turns to the misconceptions that surround the robotics sector. Thanks to the depiction of robotics in films, society has a somewhat unrealistic expectation of what can and can’t be achieved in the sector.
“The public expectation of the capability of the state-of-the-art of robotics is some way ahead of where it really actually is. Companies are coming up with great and amazing technologies, but they’re still a lot more limited in what they can do than Hollywood would make out. One of the historical challenges is that previously British corporations have been quite slow to adopt robots. It does take quite a lot of investment, time and work, even once you’ve got a technology that is proven and is working really well, to actually get it into a format where organisations are happy to take it on. Part of that probably has been due to the threat that it potentially poses to workforces and ways of working. I think actually, in some respects, the pandemic may change some of that and perhaps organisations will be happier to experiment in some of these areas because they don’t necessarily see those things as quite such a big problem.”
The idea of robots automating processes often leads to worries that there will be job losses as people become redundant. That’s not necessarily the case as Dominic highlights:
” Actually almost all of the products we’ve supported over the last few years are net positive to employment and financials because, by automating the repetitive, tedious elements of work, people can concentrate instead on doing more of the stuff that humans are pretty good at doing.”
BritBots made three investments in April and, by the end of the tax year, they are hoping to make another three to six more investments. They will be continuing to support the 18 existing businesses in their portfolio.
“Certainly, for the next year, our job is just to keep our portfolio businesses moving forward: continuing to build up their sales and drawing-down angel-stage fundraising rounds to make sure they’ve got enough capital to continue to build order books and ratchet-up their go-to-market activities. That being said, we’re always encouraging portfolio founders to sniff out exit opportunities and it’s perfectly possible that one or more of our companies could fit nicely into the strategic plans of corporate buyer.”
Find out more about BritBots at https://www.britbots.com/