We’re excited to bring Transform 2022 back in person on July 19 and virtually July 20 – August 3. Join AI and data leaders for insightful conversations and exciting networking opportunities. Learn more
This week, Sarcos Technology and Robotics Corporation (“Sarcos”) (NASDAQ: STRC and STRCW) announced a merger with RE2 Robotics, creating a team dedicated to providing robots that can solve difficult and dangerous problems for aerospace, construction, defense, energy and medical industries.
The market for robotic solutions is growing and diverging. Some companies like Boenig or AeroVironment are chasing the military market by building drones and mobile platforms designed for the battlefield. Others, such as iRobot and Samsung, continue to target consumers who need domestic help to tackle chores like vacuuming.
The industrial sector is also rapidly expanding and evaporating as companies work to support certain niches or industries. Some like Amazon (formerly Kiva), Dematic and Cyngn are focused on the supply chain where people work in a controlled environment ripe for automation. Others tackle similar areas, such as agriculture and manufacturing, where labor costs are high and work repetitive enough to welcome basic automation.
Sarcos and RE2 grew up on defense projects, but they now want to expand and take on industrial roles. They are particularly interested in supporting and perhaps replacing people who work in unstructured spaces where full automation is difficult, albeit effectively impractical, today. They plan to build machines that act more like extensions of their human operators than free-thinking and free-moving autonomous agents.
Sarcos is an almost 40-year-old company in Salt Lake City that started as a startup that grew out of the University of Utah. It was bought by Raytheon in 2007, beginning a period of tackling projects for government agencies. In 2015, a team from Raytheon continued to push ahead and raise capital to address more commercial applications while continuing to support government work.
RE2 is a 21-year-old startup that started in Pittsburgh to support some of the robotics research at Carnegie Mellon University. Meanwhile, it focused on creating agile unmanned robots to solve challenges in difficult environments for defense agency contracts. Lately, it has expanded to apply their robots in industries such as aerospace, construction, and energy.
The deal is structured as an acquisition that Sarcos is financing with $30 million in cash and $70 million in stock. Kiva Allgood, Sarcos’ current CEO and president, will continue in that role. Jorgen Pedersen, the founder and current president and CEO of RE2, will become the COO of Sarcos after the merger.
The product line will bring together two complementary approaches to target different markets. For example, RE2 builds lightweight, intelligent mobile robotic arms or terrestrial, altitude and submarine applications. Sarcos offers full-body exoskeletons and robotic arms that can be mounted on platforms such as construction elevators and other mobile devices.
To understand their vision for the future and how they see the market evolving, VentureBeat spoke with Kiva Allgood, president and CEO of Sarcos, and Jorgen Pedersen, president and CEO of RE2.
VentureBeat: Congratulations on finding a way to bring everyone together. What drew you together?
Kiva Allgood: There’s a really good cultural chemistry. Sarcos is a 30+ year old robotics company. Our founders and Jorgen have known each other for a long time. It’s a small ecosystem.
Jorgen Pedersen: From my perspective, it is shared values and a shared mission to improve employee safety and productivity. That’s the most important thing, right? If you have a business that is all about people, and if you have the right chemistry and the right common purpose, sit back and watch the magic happen. And that’s really what drew me to this opportunity – being able to amplify what we were doing and accelerate what we were doing. Together we are stronger.
VB: I noticed in the release that this merger will almost double the size of the engineering team.
Allgood: RE2’s location is in Pittsburgh in a section known as Robotics Row. From a manufacturing and commercialization perspective, the merger will give us access to many of the engineers and technical talent we need to bring products to market.
VB: What are some of the great synergies?
Allgood: We’re getting access to markets that we don’t currently sell to. Our roadmaps are highly complementary. So when you think about the medical robots and the submarine robots that RE2 makes, we don’t play in either place. Those are multi-billion dollar markets. So I think we’re super excited from the standpoint that we’ll be able to align our roadmaps and go to market together with a much more robust commercial roadmap.
VB: In the past, both RE2 and Sarcos have worked extensively with the various government agencies and defense contractors. How do you see that changing now?
Allgood: Well, I definitely think the appetite has increased in the commercial space. That does not mean that we will not continue to work together and also work on the defense side.
Between the labor shortage, the aging population and the limitations of skilled and technical talent, there is certainly much more commercial pull for applications and robots to handle them. Think of an industrial estate. Maybe they have one person and their goal is for those people to become fleet managers, so they can manage multiple robots that are basically performing a single task, but usually in a diverse environment.
VB: So man is not replaced, but simply multiplied, right?
All good: correct. Suppose you are on a construction site. Every time you come to a construction site, it looks a little different and it’s a little different again. You can’t just plop a robot down and have it repeatedly do a single task. It should be able to perform multiple tasks. People are central. We’re definitely starting to see that kind of appeal on the commercial side.
VB: Are there other industries where you feel the pull?
Pedersen: I can speak to the undersea. Currently, the Navy is the early adopter of our specific technology and we are carrying out missions such as autonomous mine neutralization. It’s about keeping divers out of the water and protecting people. That is the most important mission that we have tackled so far and have had great success so far. There are also clearly commercial analog applications that we are investigating in terms of inspection tasks. We’re going to look at other types of jobs, like welding.
VB: And how do your robots deliver?
Pedersen: The value of our system is that it is human performance on a human scale. It’s like you actually have a diver there so we can go to places that only people can get to, which is an advantage over the traditional bigger ROVs that can’t really get into tight places. So if you can offer the nearly equivalent power and capacity of those larger systems in a smaller package, you can really open up new opportunities in the commercial markets.
VB: What unlocks scaling your devices to be human-sized or smaller?
Pedersen: If you step back and look at this world, it was designed by people for people. It’s human scale. So most jobs are centered around a human’s form factor. If you look at it from that perspective, you want to replicate human capabilities or human capabilities at a distance.
VB: And so robots that are direct replacements or analogs for humans are an easy option for the market to understand.
Pedersen: When it comes to whether a market is ready for the technology, more and more markets are due to skilled labor shortages and an aging workforce. These markets are really picking up. 20 years ago it would have been a push. Today it is a draw because the world has changed and the world needs robotics to move forward.
VB: Your company has clearly had great success with the human scale. Your exoskeletons essentially adding robotic power to human workers are a perfect example. But are there options for other sizes?
Pedersen: The technology does scale, although at some point you start to defy the laws of physics. Since our start was on the defensive, some of our early adopters were explosive ordnance disposal squads, so secure IEDs were safe. One of the products we are currently shipping is our small lightweight manipulator to Teledyne Fleer FLIR. They had to carry around robots with robotic arms on them. So it has to be really small, compact and light. Because they also have to carry their food, their equipment, etc. We have a lot of experience in making very lightweight compact solutions that are also sealed and we will bring that expertise,
For bigger jobs, upscaling is always easier than downscaling, but we’ve already started at, you know, the really small scale. So we have a good starting point for all the applications that require that robotic scale.
VB: Some of the other robot companies tackle tasks in much more structured environments like the warehouse floor or the assembly line. They can achieve a high degree of automation because everything in the environment is controlled. It seems like you are going in a different direction.
Allgood: It really comes down to that unstructured environment where you show up every day and it looks a little different. That’s where we perform. We bring with us a human-like agility that magnifies one who is a professional at that task. They bring their skills, knowledge and capabilities to the task and we extend that with a robot at risk. That’s the formula that we really think will work for commercial adoption now. You don’t remove the human being, you take advantage of the benefits. It is the machine plus the human, taking advantage of both.
VentureBeat’s mission is to be a digital city square for tech decision makers to learn about transformative business technology and transactions. Learn more