Robotics Business Review Examines Dive Technologies’ Recent Equity Round


Robotics Business Review Examines Dive Technologies' Recent Equity Round

Robotics Business Review reviews Dive Technologies’ recent equity funding round.

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‘RBR Says’ for January 2nd, 2021

Robotics Business Review examines recent announcements, articles, research and more. Today’s review features Dive Technologies’ recent equity funding round.


UNMANNED UNDERWATER VEHICLES

Dive Technologies Closes US $4 Million Equity Financing Round

 

Dive Technologies LogoDive Technologies, a Boston-based designer and manufacturer Autonomous Underwater Vehicles (AUVs), announced a US $4 million equity funding round led by Tanis Venture Management. Other investors including Virginia Tech Carilion Innovation Fund, Mill Town Capital, Virginia Tech Carilion Seed Fund, Cavalier Angels, and Charlottesville Angel Network. Dive representatives noted that the company will use the funds for business development and to commercially harden and scale its DIVE-LD platform.


A pure platform play, especially in the rarefied AUV space, is unlikely to receive two rounds, in quick succession, of sizable funding amounts. The question then becomes why and why so much?


RBR Says… Proven Solution, Solid Management, RaaS Business Model and Sizable Market = Investment
Dive’s latest US $4 million investment round follows a US $3 Seed round secured in November 2019. The follow-on round speaks well of the opportunities investors perceive for the AUV market for work in the defense, research, and commercial sectors.

A pure platform play, especially in the rarefied AUV space, is unlikely to receive two rounds, in quick succession, of sizable funding amounts. The question then becomes why and why so much?

Solid Management
First, the Dive Technologies management team is solid. The company’s CEO, CTO and others are former employees of General Dynamics Mission Systems (GDMS), a business unit of General Dynamics, which produces the Bluefin medium-class AUV and the Knifefish, an AUV designed for the U.S. Navy for mine hunting operations. A few of these were also employed at Bluefin Robotics, the developer of the GDMS’ Bluefin platform, prior to the acquisition by GDMS.

RaaS Business Model
The second reason for funding approval is Dive Technologies’ business model. The company’s revenue source is not limited to supplying AUV platforms, but instead the company has embraced a Robotics-as-a-Service (RaaS) solution where Dive systems are made available as a service.

The business advantages of a RaaS approach for suppliers and end-users of robotics solutions have been well documented. For some types of robotics firms, a business model that relies on largely on hardware sales is simply untenable. Potential customers are often wary of the cost and risk of adopting novel robotics solutions. With RaaS, companies can avoid the high capital costs of purchasing robotics systems and instead pay a more manageable subscription fee.

RaaS also allows companies to rapidly demonstrate value and payback to their customers. Customers can implement systems and realize economic value immediately.

As such, service-oriented business models are becoming more common in the robotics sector where the high upfront capital expenditures for systems and risk aversion to new technologies on part of protentional customers can impede growth. For example, RaaS is becoming increasingly popular among suppliers of autonomous mobile robots (AMRS) and providers of drone systems for applications such as industrial inspection.

RaaS Compelling for Investors
For the investment community, RaaS based business models are equally compelling. RaaS provides companies with an immediate, recurring revenue stream. By removing large capital purchase decisions, RaaS companies also remove one of the biggest hurdles for robotics solution providers – the capital expenditure budgeting and approval process. That is, RaaS speeds the approval process.

Sizable Market
In addition to Dive’s RaaS business model and seasoned management team, investors are attracted to companies targeting sizeable, well funded markets with solutions that have proven their effectiveness in the field and deliver real business value. For the Dive Technologies investors, their AUV solution fits the bill. Taken together the reasons for Dive’s quick succession of funding rounds, along with the amounts, are evident.


Dan Kara Vice President, Robotics, WTWH Media

Dan Kara is Vice President, Robotics at WTWH Media where he chartered with driving the company’s robotics initiatives including online and print publications, and in-person and digital events. Prior to joining WTWH, he was Practice Director, Robotics and Intelligent Systems at ABI Research and Chief Research Officer for Myria RAS, both research and advisory services firms focused on automation, robotics and intelligent systems. Dan also served as President of Robotics Trends, an integrated media and research firm serving the personal, service and industrial robotics markets. (Contact: https://www.linkedin.com/in/dankara/)

 


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