Private equity funds hit ‘jackpot’ with robotics investment

Doosan Robotics Inc.’s collaborative robots. [Courtesy of Doosan Robotics]

As robots are increasingly used in various industries, both domestically and internationally, private equity fund (PEF) management companies invested in this rapidly growing sector in the spotlight. Several PEF management firms that bought stakes in major companies in the robot business years ago, amid skepticism about the widespread adoption of robots, are now hitting the jackpot.

According to the investment banking industry on Tuesday, the financial investors (FIs) of Doosan Robotics Inc., which is set to list on the Kospi market in late October, are expected to earn a return of more than double their investment. Doosan Robotics’ FIs are Praxis Capital Partners and the private equity division of Korea Investment Partners Co., who hold a 9 percent stake in Doosan Robotics. At the time of the investment, the two FIs valued the company at around 400 billion won ($299.9 million) while investing 40 billion won. The company is currently expected to debut on the Kospi with a market capitalization of 1.7 trillion won.

Doosan Robotics is a subsidiary of Doosan Corp. that manufactures collaborative robots such as robotic arms. The company, founded in 2015, rose to the top in terms of market share in the domestic collaborative robot market in 2018. It sells collaborative robots specialized for jobs that involve high speed, precision, heavy loads, and food and beverage.

Bear Robotics, in which IMM Private Equity Inc. (IMM PE) invested $50 million in 2021, is rapidly expanding its market presence. In June this year, the company signed an investment agreement with Daegu City to build a research and manufacturing facility, the Bear Robotics Tech Center, by investing 68.3 billion won on 22,424 square meters of land in Daegu Technopolis. The facility is expected to be operational as early as the end of 2024.

Bear Robotics is a Silicon Valley-based startup that develops and sells serving robots for restaurants. The company’s flagship products, Servi and Servi Plus, are used in numerous local restaurants, including Paris Croissant, Abiko Curry, and Mong Jung Heon. At the time of IMM PE’s investment, the company was reportedly valued at 500 billion won. The company is currently looking to raise a new investment of 40 billion won and is thus expected to be valued at around 700 billion won.

Meanwhile, Korean venture capital (VC) firms that had been investing in collaborative robotics company Neuromeka Co. since 2016, reaped the fruits of their investment as the company went public last year. Founded in 2013, Neuromeka makes collaborative robots that are utilized in smart homes and factories to perform tasks alongside humans. KTB network Co. invested 2 billion won in the company in 2016, and KT Investment Inc. and others also invested billions of won in 2017. While the stock debuted with a price of over 20,000 won per share, its hovers around 43,000 won at present.

More investors are expected to purchase robotics stocks as the growth of the robotics industry is just beginning. According to market research firm MarketsandMarkets, the service robot market is expected to grow to $103.3 billion in 2026 from $36.2 billion in 2021 Robotics startups are also actively attracting investment, with Avis Partners investing in domestic kitchen robot company Wave Lifestyle Technologies, Inc.