A recent report out of MIT found that only 10% of U.S. manufacturers leverage automation in their production facilities, but one Chicago startup that offers robots on demand to manufacturers wants to change that.
Formic Technologies Inc. announced Tuesday it raised new funding to bring automation to more manufacturers, adding another $27.4 million in Series A financing. The new funding brings the total round to more than $50 million following a $26.5 million Series A raise in January 2022.
Led by Blackhorn Ventures, the new funding comes as U.S. manufacturers continue to increase their investments in automation by installing more robots at industrial facilities. Total installations of industrial robots rose by 12% and reached 44,300 units in 2023, according to preliminary results released by the International Federation of Robotics.
Other backers in the round included Mitsubishi HC Capital America, NEC, Translink Capital, Alumni Ventures, FJ Labs, Lux Capital, Initialized Capital and Lorimer Ventures.
Founded in 2020, Formic lets manufacturers rent robots by the hour and offers customized robotics solutions to help companies automate their processes. In the past year, the startup has seen sevenfold growth in total robot production hours for U.S. manufacturers and has doubled its customer base.
Formic Technologies is now deployed in nearly 100 manufacturing facilities, according to Saman Farid, co-founder and CEO.
"Now that we have that infrastructure in place, we'll start scaling up our sales team and marketing capabilities and opening up in more regions and more categories of robots," Farid told Chicago Inno.
He described the recent raise as an "A prime" round, which better fits the company's current stage than a Series B growth round.
Formic works mainly with small and midsized American manufacturers, and in two-and-a-half years, its fleet of robotic equipment has completed 100,000 production hours with another 100,000 hours expected in the next 170 days. Farid said that 60% of Formic's customers are in the consumer packaged goods space.
With this additional financing, Formic will take on more of the heavy lifting for more manufacturers, handling things like financing, deployment and management to enable better productivity outcomes for customers. Formic currently has around 60 employees with plans to add an additional 20 to 25 following the raise.
The new funding will also help Formic expand its fleet — which offers rapid deployment and shorter lead times for manufacturers — and increase its network. The money will also be used to improve Formic's software, which leverages artificial intelligence for planning and predictive maintenance.
