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If you were to pick the hottest theme in the global stock market recently, you couldn't leave out 'robots'.
As labor shortages and rising labor costs worsen worldwide, demand for robots, a representative form of automated equipment, has begun to explode. Advances in element technologies such as AI and sensors, as well as the continued decline in robot prices, are also driving solid demand. Now, we can say that 'the era has arrived where companies must use robots to survive.'
Contoro Robotics (hereinafter referred to as 'Contoro'), located in Austin, Texas, USA, is an early-stage startup that is following this trend. It solves the labor shortage in labor-intensive industries such as logistics, agriculture, and service industries by utilizing artificial intelligence robot arms and teleoperation technology.
So, what do you mean by why you shouldn't invest? Here are five reasons why you shouldn't invest in Contoro. And there are also reasons why you should invest in it anyway.
5 Reasons Why You Should Not Invest
1.
High difficulty domain
There is a saying that 'If you want to invest well, you should invest in a field that you know well'. The first domain that Contoro chose was the US logistics industry. US (physically distant) + logistics industry (especially container/truck unloading) + robotics (plus AI and teleoperation combined) = How many people in Korea know these three things well? I can confidently say that it is a very small minority. (First of all, it wasn't me ㅠㅠ)
2.
A strong competitor
As the market is large, fierce competition is expected. There are companies such as Boston Dynamics, a robotics company with a long history, and Pickle Robot, an MIT spin-off startup. They have been developing an unloading robot for 2-3 years and are finally on the verge of commercialization.
3.
Underdog
Compared to its strong competitors, Contoro is a clear underdog. First of all, it is a startup led by a Korean founder. It would be difficult to say that it is 'advantageous' in the US (especially in fundraising). Today, many Korean founders are making meaningful achievements in Silicon Valley and other places, but there are still not many Korean companies listed on NASDAQ.
4.
Solutions not yet proven
The team must validate the hypothesis through PoC and commercialize it. The robots will perform tasks in the irregular environment of the distribution center, and sometimes the operator will have to control multiple robots remotely. It is very likely that unexpected problems will be encountered during this user journey. It will not be an easy journey.
5.
The stock market is too hot(?)
It's a rumor. It's said that it takes 3 years for a hot sector in the VC industry to become hot in the public market. Although the information asymmetry between the unlisted and public markets has decreased a lot compared to the past, VCs are still at the forefront of industry and technology trends. Is it a virtue(?) to invest early and cheaply when the public is not paying attention? The recent hot wind for robot-related stocks paradoxically makes early VCs hesitate.
Nevertheless
Yes, that's right. I invested anyway.
I could give you more than 5 reasons why you shouldn't invest, but there were some very strong reasons that made me decide to invest. And all of those reasons came from the 'excellent founding team'.
It is the technology of the founding team, the insight of the founding team, and the attitude of the founding team when working.
1.
Serial Entrepreneur
It was 2016. Contoro’s CEO, Youngmok Yoon, founded Harmonic Bionics. At the time, he was a PhD student at UT Austin and started the business with his advisor. In 2020, BASS met him through seed investment. Through this, we were able to witness him grow into a great manager.
2.
Best-in-class technology
Of course, having a connection doesn't mean you can invest 'without asking or investigating anything'.
Contoro has HW & SW technology to remotely control robot arms. This robot arm remote control (Teleoperation) technology is truly 'Best In Class' level. During his doctoral studies, he conducted research projects sponsored by the National Science Foundation (NSF) and NASA. In addition, in his first startup, he led the technology development of Harmony SHR, the world's best upper limb rehabilitation robot. He successfully achieved the difficult US FDA approval and commercialization.
After founding Contoro, you also sold the Teleoperation technology component to Sanctuary AI, a Canadian humanoid robot startup. It was so good that during the investment review process, we even talked about whether it was overspec.
3.
The ultimate AI robot arm
Although the AI models of robots have developed a lot, there are still technical limitations in AI robots that are applied in the field. Therefore, it is necessary to make them as variable-free as possible, and large-scale facility investment is required.
But with Contoro’s teleoperation technology, robots can be deployed right into the field, even without a perfect environment.
But with Contoro’s teleoperation technology, robots can be deployed right into the field, even without a perfect environment.
Imagine a situation where an AI robot makes an error while performing a task. What if the box is dented? In this case, a human can remotely control the robot and fix the problem right away. And
In this process, AI learns human senses, intelligence, and judgment. Just like a baby learns by watching an adult's movements. As the robot's intelligence becomes more advanced, the 'ultimate AI robot arm' that moves naturally like a human arm will be born!
In this process, AI learns human senses, intelligence, and judgment. Just like a baby learns by watching an adult's movements. As the robot's intelligence becomes more advanced, the 'ultimate AI robot arm' that moves naturally like a human arm will be born!
4.
Customer-centric over technology-centric
If Boston Dynamics is a typical romantic(?) robotics group, Contoro is a realistic(?) startup. The Contoro team, led by CEO Youngmok Yoon, is comprised of excellent engineers. Rather than focusing on what engineers want to make, they prioritize the voice of the customer. They research how to provide faster, more efficient, and cheaper robotic solutions to customers.
5.
Faster than anyone else, different from others
It is of course fast in iteration speed. The competitors mentioned above took 2~3 years to develop an unloading robot that could be commercialized. Contoro achieved all of this in just 1 year, from developing an MVP product to securing pilot customers. In general, robotics startups are characterized by a long time-to-market. Contoro is not typical.
Finally
In fact, there are so many reasons why early startups fail, and so many reasons not to invest in early startups. It would be strange if there were none. Despite all those reasons, the role of a startup is to somehow achieve a mission that seems impossible at first glance, and it seems that our role is to support that journey. With a warm heart, BASS is with Contoro on his great journey.
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