Industrial Tech SW: Category Renewal and Creation

Every industrial revolution has created a new set of categories and a new set of players.
Multiple new technologies have emerged, but Samsara and C3.ai are only two companies which have gone public so far.
Manufacturing startups constitute the largest pipeline share of unicorns and IPO candidates in the SF Bay Area, and software startups dominate in Germany.

1. ConfidentialWUNDERVC
Industrial Tech SW:
Category Renewal And Creation
Christian Dahlen, June 2024

2. ConfidentialWUNDERVC 2
Executive summary
•Every industrial revolution has created a new set of categories
and a new set of players
•Multiple new technologies have emerged, but Samsara and
C3.ai are only two companies which have gone public so far
•Manufacturing startups constitute the largest pipeline share of
unicorns and IPO candidates in the SF Bay Area, and software
startups dominate in Germany.

3. ConfidentialWUNDERVC
Newtechnologiesbirthedindustrial revolutions, and each
has created new categories and a new set of players
3
IndustrialistsSW GeneralistsSW Specialists
Siemens1847
GE1892
Schneider1836
Rockwell1903
Honeywell1906
ABB1883
SAP1972
Oracle1977
Epicor1972
PTC1982
Dassault1981
Autodesk1982
Ansys1970
1870 1969 2011
INDUSTRY 2.0
Mass production,
assembly line,
Electrical energy
INDUSTRY 3.0
Automation,
computers,
electronics
INDUSTRY 4.0
Cyber physical
systems, IoT,
networks
?
?

4. ConfidentialWUNDERVC
DesignPlanProcureMakeAssembleDeliverOperate
Industrial automation business processes span from
upstream ‘design’ to downstream ‘operate’
4
CAD -Computer
Aided DesignSCM –Supply
Chain MgmtProcurement
analytics
TMS –Transport.
Mgmt. Systems
WMS -Warehouse
MgmtSystemsPLM –Product
Lifecycle Mgmt
CMMS –Maint,
management
ERP –Enterprise Resource Management
Monitoring
Supervising
Sensing
Manipulating
Production
MES/MOM –
Manufact. Execution System/
Manufacturing Operating Mgmt.

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Consolidation of the past years is evidence that growth
opportunities had become sparse
5
DesignPlanProcureMakeAssembleDeliverOperate
Industrialists (Siemens,
Schneider, GE,
Rockwell, Honeywell)
Expanding from electro –
mechanical automation
into software
SW Generalists (Oracle, SAP, Epicor,…)
Started in ERP and moved top down into specific applications
SW Specialists (Autodesk,
Dassault, Ansys, PTC,…)
Moving downstream from CAD
Bus.
ops
Manuf
act.
ops
Monitoring
and
supervision
Sensing and
manipulating
Production process

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Multiple new technologies have emerged
6
3D
Printing
Image
recognition
Hyper
scalers
Virtualiz
ation
AI and
LLM
Robotics
DesignPlanProcureMake AssembleDeliverOperate
Monitoring
Supervising
Sensing
Manipulating
Production
SW as a
Service

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Entrepreneurs exploit disruptions for creative destruction
7
“The function of entrepreneurs is to
reform or revolutionize the pattern of
production by exploiting an invention…”
“Entrepreneurial profit is the expression of
the value of what the entrepreneur
contributes to production.”
Joseph Schumpeter

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Sidebar
Two automotive industry disruptions: EV and SDV

9. ConfidentialWUNDERVC
Samsara and C3.ai have been the only IPOs in the industrial
tech space (excluding the disastrous 3D printing SPACs)
WUNDERVC
Samsara
Cloud platform to harness Internet of Things (IoT)
data for insights and improved operations
•Revenues: $937M (FYendingJan ’24)
•Market cap: $16.8B (June‘23)
•IPO in Dec 2021
•Founded in 2015
C3 AI
Enterprise AI software for accelerating digital
transformation
•Revenues: $310M (FY ending May ‘24)
•Market cap: $3.7 B (June’24)
•IPO in Dec 2020
•Founded in 2009

10. ConfidentialWUNDERVC
Startupscreate new categories and renew existing ones
10
Category creation
•Unmet need
•A different problem
•Exponential improvement
•Education
•Evangelizing
•Establish the rules
•Own the market
Category renewal
•Existing need
•A better solution
•Incremental improvements
•Differentiation
•Selling
•Play by other people’s rules
•Compete for share

11. ConfidentialWUNDERVC
Each industrial revolution has created new categories and a
new set of players
11
IndustrialistsSW GeneralistsSW Specialists
Siemens1847
GE1892
Schneider1836
Rockwell1903
Honeywell1906
ABB1883
SAP1972
Oracle1977
Epicor1972
PTC1982
Dassault1981
Autodesk1982
Ansys1970
1870 1969 2011
INDUSTRY 2.0
Mass production,
assembly line,
Electrical energy
INDUSTRY 3.0
Automation,
computers,
electronics
INDUSTRY 4.0
Cyber physical
systems, IoT,
networks
New players
Samsara2015
C3.ai2009
?
?
?

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Emerging industrial tech startups in the SF Bay Area:
Manufacturing dominates
Category creationCategory renewal
•Figure $854M
Humanoid robotics 2022
•Bright machines $311M
Manufacturing cells 2018
•Carbon $683M
3D printing 2013
•Covariant $212M
Pick and place robotics 2017
•Velo3D $275M
Metal 3D printing 2014
•Flexiv $196M
Adaptive robotics 2016
•Arris composites $153M
High performance parts 2017
•Fictiv $193M
Part sourcing 2013
•Diamond Foundry $350M
Reactor produced diamonds. 2012
•Mycoworks $187M
Non plastic biotech 2013
ManufacturingRobotics
SW

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Emerging players industrial tech startups in Germany:
Software dominates, followed by IIoT
Category creationCategory renewal
•Konux $131M
IIoT for railways 2014
•Agile Robots $270M
Robotics 2018
•Wandelbots $121M
Robotic software 2017
•Neura Robotics $76M(e)
Robotics 2019
•NavVis €96M
Indoor mobile mapping 2013
•Emnify $79M
Managed IoT connectivity 2017
•Twaice $72M
Battery analytics software 2018
•Simscale €52M
CAE software 2012
•HiveMQ €49M
Data connectivity platform. 2012
•Kinexon $130M
Digital twins 2012
Robotics
IIoT
SW

14. ConfidentialWUNDERVC
The past decade of industrial tech software has lacked IPOs and has been
dominated by consolidation among existing players
Aplethora of new technologies has emerged during the past decade
The pipeline of emerging industrial tech startups in the SF Bay Area and in
Germany is stacked with many promising candidates