Teradyne just purchased Universal Robots, a dutch robotic arm leader for $350M. Universal has shipped over 4000 arms and did $38M in revenue last year.
What I find telling about this acquisition is that while this is a great outcome for Universal Robotics, it also shows several interesting facts. Universal became dominant in the fast growing small arm market. Even though they became dominant in what is perceived as a hot market they only achieved a $350M exit after 10 years. While this is a great outcome for them, it tells me that VC funded arm companies have to do something beyond what Universal did in order to provide a desired “venture return”. If Universal defines success in this market and other robotic markets, this puts other upstarts like Rethink Robotics in a tough situation. I think the challenge here is two things. One is that the market was too small, and is growing too slowly. Given that the small, cooperative arm market is only $100M, it is really hard to achieve a huge outcome, or for Universal to continue a growth rate faster than the market.
This should give all hardware startups pause – is the market you are entering big enough to sustain a $500M/yr revenue stream, or even a $200M/yr. If not, can you also attack adjacent markets, or make money in other ways (software/services).