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An updated 2022 version of this article Robot-as-a-Service (RaaS) Business Models in the Market Today (2022 edition) can be viewed at https://apera.io/p/robot-as-a-service-raas-business-models-in-the-mar.
We are migrating our robotics-related content to apera.io, a platform (beta) which helps you discover companies & products in robotics, AI, IoT, metaverses & other emerging tech. Visit our new home!
An updated 2022 version of this article Robot-as-a-Service (RaaS) Business Models in the Market Today (2022 edition) can be viewed at https://apera.io/p/robot-as-a-service-raas-business-models-in-the-mar.
Diverse Business Models of Robots-as-a-Service
Image credit: TechObjects.io
Image credit: TechObjects.io
Robot-as-a-Service (RaaS) is a compelling value proposition for users and a game-changing strategy for robotics companies. In this year-end report for 2020, we look at the diverse business models employed by different Robot-as-a-Service players in different market segments.
Number of Robot-as-a-Service (RaaS) companies in 2020 by market segment based on search sample (data source)
The top five segments for robot-as-a-service (RaaS) plays are delivery robots, cleaning robots, factory robots, warehouse robots and security robots. These are markets where there are clear existing costs, such as performance fees (e.g. delivery fees) or hourly labor wages (e.g. cleaners and security guards) which robot-as-a-service models can disrupt and optimize upon.
To learn more about the types of Robot-as-a-Service robots deployed and key players in these industries, read our other report on 2020 Robot-As-A-Service Companies (RaaS) - State Of The World.
In this article, we will look at the business model considerations of the RaaS business and survey the business models of key RaaS players, with the following content structure (10-minute read):
Who can afford to offer "RaaS"?
One example of a RaaS company is Kindred, which specializes in versatile, high-performance piece-picking robots.
Benefits. Robot as a service offers compelling benefits to both customers and robotic firms. Customers can immediately use these robots in production without hefty upfront expenses, freeing up capital for other projects. RaaS providers gain a sharp edge over CAPEX-based competitors, accelerate market share and strengthen their foothold onto the customers’ operations.
In other words, the RaaS strategy can help robotic companies acquire customers with higher success and at a faster pace.
RaaS is a moat. However, the underlying challenge is that RaaS companies require a higher startup capital vis-à-vis CAPEX-based built-to-order robotic firms. Yet, for companies that have implemented RaaS successfully, it is this exact challenge that creates a widening moat for competitors that lack the financial and operational wherewithall to run with this strategy.
RaaS 101. Aside from research and development challenges, these are the some considerations that startups grapple with at the outset of their robotic ventures.
Target Market: Are we inventing a new service category or disrupting an existing one? Is the demand for our RaaS offering ripe, premature or soft? What is the size of the addressable market?
Fleet Size: What is the initial robot fleet size needed to serve the market? Target fleet expansion rate?
Risk and Regulation: What are the legal liabilities and insurance requirements of operating a robot fleet? What are the regulatory limitations across countries, cities and jurisdictions?
Financing: Do we raise investment or tap into debt financing? What are the initial robot production costs and the expansion costs for team and operations? How do we sustain negative cash flows in the initial months and for how long?
Business Model: What are the fixed and operating cost models? What are the costs to fulfil the RaaS service-level agreement (SLA) for this market? What are the competitive pricing and revenue models?
In the next page, we continue to explore how startups "figure out" their RaaS models through pilots.
Gary Yates
I cover and write all things robotics @ Insights. Like everyone else, what I do today may be performed by a robot writer one day. So, I get ahead by keeping abreast of what is happening in the robotics world. You should too!
