Robot domination may have just taken another step forward.
Just as venture capital investments in robotics are beginning to take off, the granddaddy of consumer robotics companies, iRobot, is launching a venture capital firm.
The robot masterminds behind Roomba have made a few venture capital investments over the years, but only started taking steps to formalize the program now, according to iRobot chief executive, Colin Angle. The fund’s first official investment was in Paracosm — a seed deal which closed in November 2014.
They’re currently out looking for an investor on the West Coast to head up their shop and have reached out to potential candidates through recruiters.
The vision for a west coast investor makes sense given the heavy collection of venture-backed startups already creating a new robotics market on the West Coast. Looking at a map generated from CrunchBase data, the Bay Area is becoming a new hub of robotics innovation.
Under the program, iRobot will make five to ten investments per year in seed to Series A companies. The size of the company’s investments would range from $100,000 to $2 million with an expected median investment size of $200,000, Angle said.
One investor familiar with the company’s plans said at that level, the firm would be looking at a fund size of roughly $25 million (using some back of the napkin math)
“There’s a lot going on in the robotics space and really the best way to understand it is to participate in it.,” says Angle. “By establishing the venture fund we’re able to go out and get to know emerging companies that are building robots and robot-related technologies and get involved in these companies.”
For startups, tapping iRobot as an investor means more than just raising money. They get the company’s 25 years of experience developing, manufacturing, and distributing robots to the consumer, defense and security markets, and for manufacturers other businesses, according to Angle.
Angle’s not wrong about the market. Investments in robotics peaked in the third quarter of 2014, with 28 companies raising almost $200 million. And those deals are only the investments in robotics directly, and do not include the ancillary industries in which iRobot has also expressed interest.
Areas of particular interest to the purveyor of consumer robotics include robotics manufacturers focusing on consumer uses and elder care, as well as companies dealing with robot-related technologies around cloud computing, navigation, and manipulation of objects, Angle says.
As for the interest among venture investors, Angle ascribes the newfound appetite to a number of exits in ancillary spaces, while saving a bit of credit for iRobot’s own Roomba, which he says popularized robotics.
“One of the big things is Roomba. There are 13 million roombas that have been sold [and] 18% of all money spent on vacuum cleaners is now spent on robot vacuum cleaners,” says Angle.
Given the number of big deals and companies that are coming to market with their own consumer-facing robots, Roomba might soon have company.