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This week Sarcos Technology and Robotics Corporation (“Sarcos”) (NASDAQ: STRC and STRCW) announced a merger with RE2 Robotics, creating a team dedicated to delivering robots that can solve difficult and dangerous problems for the aviation, construction, defense, energy and medical industries.
The marketplace for robotic solutions is growing and diverging. Some companies like Boeing or AeroVironment are pursuing the military market by building drones and mobile platforms designed for the battlefield. Others like iRobot and Samsung continue to target consumers who need household help tackle chores like vacuuming.
The industrial sector is also both rapidly expanding and atomizing as companies work to support particular niches or industries. Some like Amazon (formerly Kiva), Dematic and Cyngn are focused on the supply chain where humans work in a controlled environment ripe for automation. Others are tackling similar areas, like farming and manufacturing, where labor costs are high and the work is repetitive enough to welcome basic automation.
Sarcos and RE2 grew up working on defense projects, but they’re now aiming to expand and take on industrial roles. They’re particularly interested in supporting and maybe replacing humans working in unstructured spaces where complete automation is difficult, if effectively impractical, today. They’re planning on building machines that act more than extensions of their human operators than freethinking and freemoving autonomous agents.
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Sarcos is an almost 40-year-old company in Salt Lake City that began as a startup emerging from the University of Utah. It was purchased by Raytheon in 2007, which began a period of tackling projects for government agencies. In 2015, a team from Raytheon spun it off again and raised capital to tackle more commercial applications while continuing to support governmental work.
RE2 is a 21-year-old startup that began in Pittsburgh to support some of the robotics research at Carnegie Mellon University. Along the way, it focused on creating agile unmanned robots to solve challenges in difficult environments for contracts from defense agencies. Lately, it’s been expanding to apply their robots to industries like aviation, construction and energy.
The deal is structured as an acquisition that Sarcos is funding with $30 million in cash and $70 million in stock. Kiva Allgood, the current CEO and president of Sarcos, will remain in that role. Jorgen Pedersen, the founder and current president and CEO of RE2, will become Sarcos’ COO after the merger.
The product line will bring together two complementary approaches to targeting different markets. RE2, for instance, builds lightweight, intelligent mobile robotic arms or terrestrial, at-height and subsea applications. Sarcos offers full-body exoskeletons as well as robotic arms that can be mounted on platforms like construction lifts 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 very long time. It’s a small ecosystem.
Jorgen Pedersen: From my perspective, it’s having shared values and having a shared mission of improving workers safety and productivity. That’s paramount, right? If you have a company that is all about people, and if you have the right chemistry and you have the right shared goal, then you just 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. We’re stronger together.
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 which is known as Robotics Row. From a production and commercialization perspective, the merger gives us access to a lot of the technicians and technical talent that we need in order to be able to drive products to market.
VB: What are some of the big synergies?
Allgood: We’re gaining access into markets that we currently don’t sell into. Our roadmaps are very complementary. So if you think about the medical robots and the subsea robots that RE2 makes, we don’t play in either of those places. Those are multi-billion dollar markets ]. So I think for us super excited from the standpoint that we will 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 in the commercial space has increased. That doesn’t mean we won’t continue to partner and work on the defense side too.
Between the labor shortage, aging population and limits on skilled and technical talent, there definitely is a lot more pull from the commercial side for applications and robots to handle them. Consider an industrial site. Perhaps they have a single individual and their goal is for those folks to become fleet operators so that they can manage multiple robots that basically do a single task, but typically in a diverse environment.
VB: So the human isn’t being replaced, but just multiplied, right?
Allgood: Correct. Say you’re on a construction site. Every single time you show up to a construction site, it looks a little bit different and the weather is a little bit different. You can’t just plop a robot down and have it repeatedly do a single task. It has to be able to do multiple tasks. The human is key. We’re definitely starting to see that kind of pull on the commercial side.
VB: Are there other industries where you’re feeling the pull?
Pedersen: I can speak to the subsea. Currently the Navy has been the early adopter of our specific technology and we are performing missions such as autonomous mine neutralization. It’s about keeping divers out of the water and keeping people safe. That’s the main mission we’ve been tackling so far and have had great success to date. There are clearly commercial analogs applications as well that we are exploring in terms of inspection type of tasks. We are going to be looking into other types of tasks such as welding.
VB: And how are your robots delivering?
Pedersen: The value that our system brings is that it’s human performance at human scale. It’s like really having a diver there so we can go places only humans can go, which is an advantage over the traditional larger ROVs that can’t really get into tight places. So if you can provide the near-equivalent strength and capability of those larger systems in a smaller package, you can really open up some new opportunities across the commercial markets as well.
VB: What does scaling your devices to be human-sized or smaller unlock for you?
Pedersen: If one steps back and looks at this world, it was designed by humans for humans. It’s human scale. So most jobs are centered around the form factor of a human being. When you look at it from that perspective, you want to replicate human capability or remote human capability.
VB: And so robots that are direct replacements or analogs for humans are an easy option for the market to grasp.
Pedersen: When the question is whether a market is ready for the technology, more and more markets are because of skilled labor shortages and aging workforces. These markets are really pulling. 20 years ago, it would have been a push. Today it’s a pull because the world has changed and the world needs robotics to help it move forward.
VB: Your company has obviously had plenty of success with the human scale. Your exoskeletons that essentially add robotic strength to human workers are a perfect example. But are there opportunities at other sizes?
Pedersen: The technology does scale, although at a certain point, you do start to defy the laws of physics. Because our start was in defense, some of our early adopters were explosive ordnance disposal squads, so rendering IEDs safe. One of the products that we currently ship is our small lightweight manipulator to Teledyne FLIR. They needed 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 gear, etc. We have a lot of experience in making very lightweight compact solutions that are also sealed and we’re going to bring that expertise.
For larger jobs, scaling up is always easier than scaling down, but we’ve already started at, you know, the really small scale. So we have a good starting point for any applications that require that scale of robot.
VB: A number of the other robotic companies are tackling jobs in much more structured environments like the warehouse floor or the assembly line. They can achieve high degrees of automation because everything in the environment is controlled. It seems like you’re going in a different direction.
Allgood: It really does come down to that unstructured environment where you show up every day and it looks a little different. That’s where we perform. We bring a human-like dexterity that augments someone who is a professional at that task. They bring their skill, knowledge and capability to that job and we extend that with a robot that goes into harm’s way. That’s the formula that we really think will work right now for commercial adoption. You’re not removing the human, you’re leveraging the benefits. It’s the machine plus the human, leveraging the benefits of both.
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