As companies like Nvidia and SoftBank focus on industrial robotics as key areas for future R&D, a startup has raised funding today for another facet of how AI is being used on the factory room floor.
Augury , which develops AI-based hardware to identify when machines need repairs and what is wrong with them, has raised $75 million in funding. The company will be using the money to bring on new customers, and continue developing its technology, which measures vibrations, sound, temperature and other factors.
The company has so far monitored more than half-a-billion hours of machine operations, covering a wide variety of equipment manufacturers and processing. “We have by far the largest data set of mechanical signals,” CEO and founder Saar Yoskovitz said in an interview. He calls this trove of information “the malfunction dictionary.”
“We’re at a point where if you have a pump in your factory, we don’t need to build a model for your specific machine, because we’ve seen over 20,000 pumps before,” he said.
This equity investment is the first tranche of a Series F round that the company is still closing. Yoskovitz said the final amount is likely to be around $100 million, and the round should be completed in the coming months. He declined to comment on the company’s valuation except to confirm that this is an up-round and values the startup at over $1 billion.
Lightrock is leading this round. Returning investors who participated include Insight Venture Partners, Eclipse Ventures, Munich Re Venture Capital, Qualcomm Ventures, Lerer Hippeau Ventures and Qumra Capital (which led a $55 million round in 2020).
The fundraise comes on the heels of a strong wave of business since Augury last raised money in 2021. Its revenue has increased five-fold and its customers now include major manufacturers like PepsiCo, Nestle and Dupont, as well as several gas and energy companies via a partnership with Baker Hughes , one of its strategic investors.
As Yoskovitz describes it, the COVID-19 pandemic put supply chains into focus around the world. While all the talk was about “digital transformation” in IT, at the industrial level, that cycle was going to take longer, since expensive equipment is rarely ripped out if it’s still working or just needs small fixes. Typical lifecycles can extend into decades in industrial environments.
That is where Augury comes in: Its sensors effectively sit within or alongside machines to listen to and observe how they work. The company then uses that data to train its algorithms to understand when a machine is not working, and what might be wrong.
This algorithm then acts as the guide for factory workers who can then fix the machines. Those people could one day be replaced by robots, but they will still need the data to understand what to do, which gives Augury a way of extending its data play into future factories regardless of how many people or robots are employed.
But right now, it sounds like there are very few robots being used by Augury’s customers: Yoskovitz said around 80% of its deployments are in legacy, “brownfield” environments, and the remaining 20% are in “greenfield” factories built recently and with more modern equipment (yet still often absent of robotics).
It could be argued that Augury’s technology is another example of how AI is taking jobs away from people, but Yoskovitz presents a different take: “The biggest challenge the industry is facing is actually talent shortage. There is a gap. There is an aging workforce, where all of the experts are going to retire in the next five or six years. At the same time, the next generation is not coming in, because no one wants to work in manufacturing.”
But when these new people do enter the space, he added, they will know less than the generation that came before, because they will be more interchangeable and responsible for more (due to there being fewer of them).
Augury’s solution is to “digitize the knowledge” to help factories and those working in them, and then repair their equipment.
Lightrock, the lead investor in this round, focuses on sustainability investing, which has become an interesting field in the last year — not because of the opportunity and optimism, but the opposite.
Paul Murphy, a general partner at Lightspeed, summed up the situation well in a passionate argument that he called “ RIP Climate Tech .” He said, effectively, that due to changing regulatory and political climates, the days are numbered for startups and investors who look at sustainability as an altruistic goal in itself.
The next stage, for those who want to continue to put money behind their own sustainability goals, must be to focus on companies that address this while also building solid businesses.
This is effectively where Augury sits, and it’s one reason why Lightrock invested.
“It’s surprising, but machines which are installed in factories run for 20 or 40 years. It’s a huge capex involvement, and so they don’t change a lot of parts in the factory. They don’t rip and replace the machines altogether,” said Ashish Puri, a partner at Lightrock who led on the deal. The VC firm marks sustainability as an important focus for investing, and Puri describes it more specifically as “sustainable capitalism.”
“Augury is a good example of a business that marries productivity with a green approach,” he said, noting that building tech to help manufacturers use their equipment for longer is, essentially, a green ideal.