Startup Impressions: Rosotics
Cheaply Printing Large Metal Structures Will Disrupt Heavy Industry
Recently I’ve been thinking about issues relating to manufacturing in the aerospace and defense domain, and want to share a deep dive I put together for myself about a startup.1
Historically, to build large and complex structures, manufacturers would create subassemblies by removing raw material from feedstock, and then join the subassemblies together. This creates significant waste. Additive metal manufacturing, 3D printing, typically uses a laser to sinter metal powder and extrude a structure. This enables the creation of more complex structures and reduces waste, but creates two new issues: it’s energy intensive, and the maximum size of the structure is constrained by the size of the fabrication chamber.
Rosotics is solving these new challenges with a Rapid Induction Live Interpass (RILI) 3D printing robot. RILI, which heats printing feedstock using a magnetic field, is both less wasteful and more energy-efficient than the laser approach; the robot runs off one 240V outlet. Rosotics’s printer can produce hardware larger than the competition, with a maximum size of 30 ft. It’s developing the capability to print HY-80, an alloy used in the maritime domain which has not been printed before. Beyond the aerospace, defense, and maritime markets, they intend to disrupt forges and other traditional hardware vendors. Their business model is hardware as a service.
The co-founders are Christian LaRosa and Austin Thomas. Christian is the CEO; he studied Aerospace Engineering at Arizona State University. Austin is the COO and studied finance and violin performance at ASU. For a startup this ambitious, I find young, inexperienced founders more compelling. They may make first-time founder errors, but their background means they’re likely taking a clean sheet approach to the technology. I think this makes them less likely to make the mistakes everybody else in this space is making and not realizing.
The opportunity here is substantial; Rosotics has a great moat because of its unique RILI method and industry-leading maximum structure size. Success for Rosotics means becoming a leading vendor for heavy machinery manufacturers. Beyond their beachhead customers, they’re looking at vendors who serve the energy, transportation, and manufacturing industries. I also expect them to sell hardware directly to the DoD, because they can produce large military-grade metalwork in complex shapes relatively quickly (45 kg/hr) with low waste. An IPO is not out of the question; nor is acquisition by a defense prime contractor.
There are three key risks to this thesis.
Both co-founders are first-time founders. This has inherent risks rooted in the fact that neither of these people has built a company before. This could be mitigated somewhat with a stellar advisory board, but information about a board is not available.
They need to interrupt very long sales cycles. They’re using demos, loaner robots, and discounts to engage academics; we don’t know how successful they are, but they’re selling to large enterprises. Considering their marketing efforts, a sales hire would mitigate this risk.
To serve their beachhead customers, they must certify the quality of their products. Based on their readiness to perform educational demonstrations, their robot is at least at Technology Readiness Level 6, and I have confidence in the firm’s ability to get the needed certifications.
Rosotics raised an angel investment of $0.09MM in August 2019, a pre-seed round of $0.75MM in August 2022 led by Draper Associates, and a pre-seed round of $0.548MM in July 2023 (only on Crunchbase) led by H.E.N.R.Y Collective Ventures. Sequoia Capital, Trajectory Ventures, Correlation Ventures, and Vibe Cap have also invested. Draper Associates participated in both pre-seed rounds, which is a strong positive signal. The firm has raised $1.39MM to date.
Valuation data is unavailable, likely because the firm has yet to raise a priced round. This is common at the pre-seed stage. To provide indications about data that should be related to the entry price, the plot below compares cumulative venture capital funds invested in Rosotics with three robotic manufacturing startups and three 3D printing startups:
Machina Labs shapes metal with robots
GrayMatter Robotics automates surface treatments for high-mix applications
Path Robotics welds parts together autonomously
Velo3D does additive metal manufacturing with a laser
Formlabs specializes in 3D printing parts with complex geometries
Desktop Metal makes and sells 3D printers
Rosotics’s investors have provided a relatively small amount of capital at this point, even accounting for the recent reduction in fundraising amounts. Of the other seed rounds shown, Rosotics has raised more money than only one as of now. This suggests either a lower valuation or less founder dilution; either of these should enable an investor in the next round to negotiate an attractive entry price with respect to recent history for both robotics and 3D printing startups.
Rosotics is solving a problem that impacts many commercial and government institutions. Their young, bold founding team is backed by an impressive list of investors and has already taken the firm to an advanced state of technical development with remarkably little capital. Between the problem, the team, the technical moat, and the size of investments into comparable firms, this looks to me like an attractive opportunity.
If Rosotics were fundraising right now, I would recommend investing.
All the information used in this writeup is available publicly or commercially; I’ve never spoken with the founders.
Loved this!! Great work as always