June 25, 2019
Cobalt Robotics makes autonomous mobile security robots. They are also one of several autonomous mobile robot companies offering their solution as robots-as-a-service (RaaS). Cobalt announced today that they have secured an additional $35M in series B funding, led by investment firm Coatue. With this series B funding round, Cobalt has raised a total of $53.3M to date.
Cobalt is in Growth Mode
This announcement is important because unlike robot vendors who sell or lease their equipment, RaaS is a highly capital intensive business model for the robot manufacturer. In robots-as-a-service, the customer doesn't actually own the equipment, they are only consuming the service offered by the vendor. In the case of Cobalt Robotics, they are selling security "coverage" of a facility or campus. The physical security market is predicted to reach nearly $119.4 billion in 2023. Security robots are an innovative new tool within the industry that enhances security operations by bridging the gap between traditional technologies and services such as cameras, access control, and manned guards.
Cobalt Robotics customers essentially hire Cobalt to deploy security robots within their facility and then pay for that service on a monthly or quarterly basis. Cobalt has a remote monitoring system which enables the human security guards to see and hear what the robot sees and hears in a "security alert" situation. Likewise, the Cobalt remote operations center can remotely help their customer's security team when there is a problem with a robot. This means that Cobalt customers don't have to be robot experts to use the system, and remote operation is a standard feature of any RaaS solution.
RaaS is emerging as a viable financing option, especially in applications such as security, where the robots are extending the coverage of human security guards and the impact is measurable by a real key performance indicator (KPI). In this case, the KPI is hours of operation. KPI's such as this are very easy to account for and thus charge for on a recurring basis. It also means that the monthly recurring revenue for Cobalt is continuing to grow for Cobalt as more robot security guards are deployed.
RaaS is a Capital Intensive Business Model
RaaS is a challenging business model as vendors such as Cobalt need the larger capital investment to build and deploy an ever growing fleet of AMRs. Here at The Mobile Robot Guide, we think that this is a good sign for Cobalt and the RaaS market in general. It's typical for a RaaS provider entering their "sophomore" years, to need more capital investment than an average capital equipment provider. Cobalt will quickly turn this investment round into real robot systems and ready them for deployment into the field.
One key advantage of RaaS, is that the vendor can easily redeploy used equipment without any penalty since the service delivery is what is being measured, not the age of the equipment. Customers have the advantage of paying for RaaS services with operating expense budget rather than capital expense budget, a feature which helps reduce the length of the sales cycle and the level of approval within most customer organizations.
Bottom-line, we're excited to see Cobalt growing to the next level of maturity. This is a positive sign for the RaaS market and autonomous robot security services.