Robocraftsman raises new round, deploys versatile metal-forming robots for aerospace and auto at scale

Speaker 2: Style and substance. Hopefully. Amazing. Hopefully. Anyway, thank you so much for coming out.

Speaker 1: Great. Sarah.

Speaker 2: We'll talk Thank to the Sarah. Bye. And without further ado, we have Ed from Muckin' Labs in the studio. Good see Good to see you. Fantastic. Welcome to the show.

Speaker 1: What's happening? Come Why

Speaker 15: don't you go?

Speaker 2: Let's let's kick off

Speaker 1: Woah. Some Got some heavy metal.

Speaker 2: Can we oh, can we knock this? Let's knock the gun. What do you got? Wait. Sit down. Tell us the number. One twenty four minutes. So you guys put our

Speaker 15: ad in our logo in your ad yesterday. We thought we should put you in metal. Amazing. Amazing. Amazing. Nathan, our new engineer, took some time off from customizing cars and It's so cool. Put this put this in. Yeah. So Wow.

Speaker 1: Very, very, very cool.

Speaker 2: It's amazing. Okay. So this is metal deforming. Explain what's going on here. Right. Explain what machine made this.

Speaker 15: Yeah. So we build a machine called Robocraftsman. It basically does different types of metal operations like a craftsman would. Yeah. Core operation is sheet forming. Mhmm. Is a slight kind of indentation to kinda get your logo out. Yeah. But we can form, you know, aircraft panels. Sure. Airframes, you know, car bodies. We do a lot of customization work with Toyota right now. So but the system is designed to do all kinds of manufacturing operation. You know, you kind of think about it as kind of versatile Sure. Manufacturing robot that can do different types of operations Yeah. Just through software.

Speaker 2: And what unlocked the new round? Is it a partnership with a big automotive OEM or just sort of broad adoption unlocking certain technical milestones? Like, what what jumped off the first slide of the pitch deck?

Speaker 15: Yeah. So we're now going actually from kinda like, you know, technology development at this stage to actually scaling.

Speaker 2: Mhmm.

Speaker 15: Right? So we are deploying at facility number three Here we go. Facility number four

Speaker 8: Here we go.

Speaker 15: Right? So this third facility is gonna be 250,000 square foot facility, which is twice the size, more than twice the size of our, you know, second facility

Speaker 2: Wow.

Speaker 15: Which is 75,000 square foot right here in the in the valley. Yeah. So for the and also, we're gonna expand the scope of operation. Mhmm. So we initially built a platform to do sheet forming. Now, we're adding welding.

Speaker 9: Mhmm.

Speaker 15: We're adding adding assembly, machining. So we can do full end to end, you know, complex metal structure assemblies

Speaker 2: Yeah.

Speaker 15: For our customers. For example, we're doing a lot of work right now with aerospace primes

Speaker 2: Mhmm.

Speaker 15: To do missile airframes. Mhmm. So this actually, this first facility is gonna do that at larger volumes. We're gonna do thousands of missile airframes Mhmm. A year out of that facility. But the beauty is that tomorrow you can just switch it and do aircraft panels or do car and automotive panels.

Speaker 2: Yeah. Do you want to ever allow someone the flexibility of something that feels almost like three d printing? You you know, you're you're able to do r and d low volume, but then when someone says, Okay, I'm going to make the cyber truck. You need to gig a press. Is that something you want to get into or is that something you see as like antiquated, we won't need stamping anymore in the future?

Speaker 15: Yeah. I think in the short term, I think we could cover up to a few thousand a year. Right? And the big question is long term, you know, what does the manufacturing look like? Mhmm. My view is that long term we're going to have less high volume of making the same thing over and over again

Speaker 1: Yeah.

Speaker 15: And more just keep changing. And then you look at the software, you know, how many apps you have on your phone? Yeah. Like, you know, hundreds. Like, you can download thousands

Speaker 1: software used to make it, it would get you put it on a disc, sell it Right. Just pray, basically.

Speaker 2: Right. Right. Future your car, you don't have a daily and a weekend. You have different panels that you could chunk off, change it.

Speaker 1: I mean Jeep does that.

Speaker 2: Yeah, they do. They do.

Speaker 1: Already. Yeah. Yeah.

Speaker 15: So that that world is I think, you know, you look at any sci fi book, you know, it just tells you about this world where, you know, like every building looks different, every car looks different, you know

Speaker 1: Basically a lot more version of

Speaker 15: it. A lot more variety. Yeah. So I think in long term, we're probably not gonna have as much of like make the same thing over and over again.

Speaker 2: Yeah. Yeah. Yeah. When you talked to Lukasz Ziggur about three d printing for the hyper car he built, it feels like there's certain trade offs that he's optimizing for where certain weight to strength ratios are only unlockable with certain structures. They look more organic. What what are the other optimization parameters that you're

Speaker 1: looking at? Yeah. Go for it.

Speaker 2: Yeah. I'm just thinking like cost, speed, flexibility, any anything else that's like jumping off the page so Yeah.

Speaker 15: Right off the bat is just the speed. Right. You know, that's why also we start out of defense because Yeah. Like, you know, that's where you want you wanna have a new idea and new weapon system, you wanna scale it really fast. Sure. But not only just to scale it

Speaker 2: fast Quickly, it's like quantize that speed because I've seen, you know, heat the the image that I'm conjuring, you can correct me, is like two massive like sort of robotic arms pushing against this metal sheet. Right. And it's working for like a few hours. Right. Is that right? Is that hours, days, or how how long

Speaker 15: are we taking? Yeah. Depending on the geometry Yeah. You know, the tack time could be a few hours Sure. Up to maybe a day.

Speaker 2: Okay.

Speaker 15: Right? Yeah. Yeah. But, you know, you have to compare it to the traditional paradigm where you have to go make a dies and tooling. Sure. So now you're looking at three months up to a year Yeah. Depending on how many tools you need Yeah. Can potentially be longer before you even get your first one.

Speaker 2: Oh, yeah. And that wait time is terrible. I've seen that for like even just like plastic forming. Takes forever. Injection molding. Like, make a mold that makes the mold that makes the mold. Know, it's seven steps and every and then someone goes on new year and

Speaker 15: you're And the fundamentally comes down to like, okay, what is the dollars went into building a part because you can horizontally scale. Yeah. Right? So if let's say, hey, you know, have to spend $200,000,000 to set up a facility and pay for all the dyes to get to production. Okay. With $200,000,000, how many of Robocraftsmen can run-in parallel?

Speaker 2: Sure. Sure.

Speaker 15: And that's where it becomes a little bit more relevant because we get speed through parallelization, whereas as you know, traditional manufacturing gets to speed through decreasing tach time. Right? Like, I do it fast, but I have one assembly line that things go through, it needs to be fast. Whereas we're saying, okay, have a matrix operation, have 200 of these cells. Yeah. Same cost

Speaker 2: Yeah.

Speaker 15: But then to get you same throughput, but tomorrow you wanna change from, you know, you know, model a to model b, you can just do that.

Speaker 1: Yeah. Who who are you actually competing with? Is it is it operations in China? Like, that is that like when you're when you're really when when somebody's kind of comping you out? Right. I I imagine there's not there just can't be that many super tech enabled kind of manufacturing companies of the future in Southern California to where I often imagine your competition is overseas? Right.

Speaker 15: Yeah. No. So I think, well, it could be for some of the sectors. In commercial world, yes. But then in defense, you know, these are already within The United States.

Speaker 1: I meant more like in auto manufacturing.

Speaker 15: Yeah. So I think, you know, going back to your question around like what do we enable? Speed is one thing, but a lot of times we also enable something that traditionally was just not possible. Mhmm. Yeah. That's what we're doing with auto. Right? Traditionally, you could not go, no matter if you did it in China or here, you still have to make dies and unit economics doesn't make sense if you have to customize and make a new die and new mold for every panel or every custom car you're going So in those cases, we're actually creating a completely new paradigm. Like this is a new business model that Toyota's going after. Like, okay, you know, John or Jordy can go on a website and say, hey, I want this Toyota Tacoma and I want t v p n. You guys have to have to get fleet vehicles at some point. Yeah. I can do that

Speaker 2: for you.

Speaker 15: So t v p n on the side door and I want 200 of them. Right? Yeah. Twitter would be like, this is not impo it's just not possible. Yeah. Right? So we're in

Speaker 1: actually a big market. Mean, imagine thinking electricians, like all these different trades where you would want the custom truck because you're like, we're gonna run this into the ground. It's not like a consumer buying something that that maybe they're like, oh, I'll be in it for a few years.

Speaker 2: I just want a sticker on the side. We want something that's, like, permanent. Yeah.

Speaker 1: Right. Makes a

Speaker 2: lot of sense. I have an idea of what your CapEx looks like. I mean, you're buying big robotic arms. What does the OpEx look like in a robotic factory? Are buying a lot of, like, oil cans, like, squeaking Yeah. Things? Like, what like, what what are the what what are the parts that break when you're running a lot of robotic arms?

Speaker 15: Yeah. So I think like robot maintenance is one part

Speaker 2: of part.

Speaker 15: Yeah. Right? Like, you know, changing oil. Yeah. You know, every once in a while you have gear boxes that wear out you have to change those things. Yeah.

Speaker 1: But Motors too? Mhmm. Do motors Burnout?

Speaker 15: Burnout? Motors actually are pretty I think, you know, I've had I've been working with robots, this company in the previous one, Relativity Space. Yeah. Never had a more motor give on me.

Speaker 1: Wow. Really?

Speaker 15: I've had gear boxes give on me. Have supplies give it, you know, but not motors.

Speaker 1: Is that when people talk about humanoids, they're often the criticism is like, hey, you have all these different motors that need to function and they're gonna be under a lot of strain and maybe that's kind of a risk from a depreciation standpoint or just operating

Speaker 2: expense? Yeah.

Speaker 15: I mean, at the end of the I think the way I think about it is, if you go like very fundamental, right, the bill of material that goes into making a robot is not that significantly different than the bill of material to go into building a die. The difference is a die and a mold is a dumb material versus a robot is an intelligent material Sure. That can change its configuration. Yeah. So so I mean, it's the same argument even with molds. Like, you know, if you have your gearboxes kind of like, you know, getting worn out, dyes get worn out. You have to repair dyes. Right? So the argument applies either way. It's a question of like which one is a more longer term ROI, which is usually intelligence has more longer term ROI than Yeah.

Speaker 1: You scaling outside of California yet or Yeah.

Speaker 15: Third So facility is not gonna be in California.

Speaker 1: Oh, okay.

Speaker 15: So volume production, I think obviously California, have lot of engineers, so we want our R and D development be here. But productions, we're looking at Texas now for the third facility, New Mexico

Speaker 5: Mhmm.

Speaker 15: Nevada recently and New Mexico and Alabama.

Speaker 1: So How what's the process with those states? Are they getting or is it fairly competitive? Is is there states that are leaning? Does does tech as because I imagine Texas has a lot of momentum. If you're one of these other states, you maybe offer more incentives to get your get your business.

Speaker 15: Yeah. I think Texas has the benefit like, you know, we're looking at Austin and nearby area like Los Angeles. SpaceX used to

Speaker 1: Yeah. People want to live there. Exactly. The benefit.

Speaker 15: But then you go to New Mexico. New Mexico has, you know, actually they have a sovereign fund that can invest into Yeah. Into facilities that that you're gonna deploy. Obviously, taxes are, you know, estate taxes are minimal in all all three, you know. Texas is more property related taxes. So, It's different different for each state, but you're right. I think Texas is becoming that premium state, so they value themselves a little bit higher than

Speaker 1: What what was the ten year pitch for investors? Obviously, they're investing based on the, you know, everything you've done to date and the and the current traction. But if when everything goes right, what does the business look like?

Speaker 2: Custom hoods for Ford Raptors.

Speaker 1: Else do you need

Speaker 2: to know? Don't even open the docks app. Right. Just wire the money. Exactly. I think you you

Speaker 15: see I think, you know, what excites us and also like everybody in the company, right, is the world where, you know, when when I got out of school, you know, in order to build hardware, you have to work in big companies. Mhmm. Like like, you know, if you're a software engineer though, you know, you can have a small team, put stuff on AWS, suddenly your app is accessed by, you know, millions of people. Yep. If you're a hardware engineer, you have to go work for like, you know, big companies, Toydas, you know Boeing. Boeing. Yeah. Because your idea requires a lot of CapEx to be built. So Yep. Long term vision is can we make that happen for hardware? Can we make what happen with software for hardware? Where you have an idea, you go on a portal.

Speaker 2: Yeah.

Speaker 15: You know, the AI on it guides you to turn your intention into a design that's manufacturable. And you say, hey, I want 200 of these, you know, in Hollywood, California and the right facility that might be in South Bay or in the Bay Area gets programmed makes it for you and you know, a week later you you get it you get it

Speaker 2: shipped to your door.

Speaker 1: Amazing. What

Speaker 2: about the abstraction layers on top of the robots? You you obviously buy robots that are, you know, off the shelf. I mean, they're they're made by large corporations. But once those arrive, I'm sure they have some computer control system. Have you had to build an abstraction layer on top of that? Or do you have a translation layer from a design you put in an image and that turns it into a three d point cloud or something Yeah. And then translates into robotic motions? Like, what was the process to actually, you know, fire it up? Because you're you're not controlling this with an Xbox.

Speaker 15: No. In early days we did. Yeah. But but yeah, no. So there's two pieces of software that that we developed. So one we call like, you know, cut off line programming software where it takes a design Mhmm. And then modifies the design, then prepares instructions that can be sent to the robot. Mhmm. Then And once the robot is done, it gets the results from all the sensors and allows you to do some analysis or even train models afterwards that gives you better process parameters for the next time. Yeah. Right? So that's our offline software we call it architect. And then there's a software that controls robots every four milliseconds. Look at the sensor data and say, okay, how did you do and do I want to adjust? Mhmm. Right? And so it's so I can improve it. So both of the software is internal. You know, we did decide to try to be as much as we can off the shelf. So 70% of our hardware BOM is off the shelf. There's 30% like things that the robot pick up or the way Yeah. We, you know, hold the material or the whole platform itself because it's a portable platform. Those are built and designed by us. But we wanted to be able to go to market with, you know, limited amount of CapEx requirements where something that can be easily financed with debt as opposed to try to spend a lot of equity dollars on Smart. On building, you know, custom machines. But yeah. So software is all us. Yeah. Hardware side, 30% is is designed and, you know, 70% off.

Speaker 2: Yeah. Talk more about the capital sources. What's the role of debt in this business? What's the role of strategic partnerships? It feels like at this level of the stack, we often see companies teaming up with bigger players. What are the pitfalls of that best practices?

Speaker 15: Yeah. You know, I think, yeah, that's one of the things that I learned. It's like a company like this, you need to basically have very diversified capitals. Mhmm. Right? So obviously, get equity dollars for development. Mhmm. But I think the best use of the equity dollars is just put into engineering Yeah. Build something that gives you long term money.

Speaker 2: Yep.

Speaker 15: Most of our, you know, CapEx is fine as finance with debt Sure. Even up to this date.

Speaker 2: Yeah. You get a mortgage, basically.

Speaker 15: Yeah. So you basically get mortgage against the asset. You know, it's still pretty cheap. Used to be much cheaper. Yeah. Now it's like, you know, maybe 2% to 3% above the prime rate. Sure. Right? So so and then and then I think customers play a big role. Because we're such a fundamental change.

Speaker 2: Are those loans typically interest only or are you paying down the principal over like ten year depreciation schedule?

Speaker 15: Yeah. So like You can do either. All flavors. Okay. Yeah. Right? So so we have like some of them that like, you know, couple of years interest rate only Okay. Then you have five, six years of repayment.

Speaker 2: Got it. Yeah.

Speaker 3: You know

Speaker 2: Just like a house, but a little bit shorter because it matches the depreciation schedule. Yeah. Makes sense.

Speaker 15: And then, obviously, you brought customers. I think for us, was actually pretty crucial. Like most of the time people think of, okay, know, if you're a venture funded business, don't go to customers, they change your direction, maybe they give you a little bit Yeah. You know, they they kind of force you to do things you might not want to do. I think in our case, it's such a fundamental change. I mean, Toyota's of the world, aerospace problems of the world, manufacturing is their thing. Right? So I found actually it's better to partner with them and actually get them involved because some of these manufacturing changes takes five, six years to do. Right? So if the executives, even the CEO of the prime is not in it, you know, doesn't have a stake in the long term, there might not be, you know, the success might be a little bit iffy, right? Yeah. Because they're not committed to for the long ride, right? Yeah. And then, I think the last source of capital, I think, you know, this is, you know, we talk about manufacturing as a national security Yeah. Kind of advantage. So a lot of governments.

Speaker 1: Mhmm.

Speaker 15: You know, we work with a lot of governments to provide, you know, kind of certain level of support so that we can deploy these factories in their in their countries. We recently announced a partnership with UAE.

Speaker 2: Oh, yeah.

Speaker 15: Cool. So that's gonna be

Speaker 1: where our fourth facility Yeah. They haven't seen incentives around. They have so much power and so much land and they just want things to be made there.

Speaker 15: Yeah. And they have a huge I mean, that area I mean, speaking of I'll call it like, you know, Abrams is a core two point o. That area is like so much going on there in terms of instability. Yeah. All the kind of sane countries in the region are trying to Sure. You know, have some level of defenses. And I think UAE is doing a smart thing. They want to become the defense manufacturer in the region next to Turkey and Israel. So Cool. Spending a lot of money and time on it.

Speaker 2: That's great. How big is the company? What's the hiring plan? Big new round?

Speaker 15: So right now, are roughly 70 people planning to get to two forty

Speaker 2: Two forty.

Speaker 15: In the next year and a half Wow.

Speaker 2: Yeah. That's a lot of people. Is that manufacturing jobs sort of is there blue collar element to any of the work?

Speaker 15: Yeah. Yeah. So we still need a lot of technicians Technicians.

Speaker 2: That's

Speaker 15: I think, you know, there's a lot of scare when people talk about, you know, kind of AI and like automation. It's like, okay, where are the jobs going? I think we're actually gonna see a revival of blue color a little bit. I think the blue color is not just gonna be, I call it not as blue as it used to be. Like Sure. They're gonna be, you know, they're gonna be working with robots and iPads and they're gonna be enhanced. But, we still significantly need technicians, manufacturing engineers on the shop floor operating these systems. That

Speaker 2: makes a lot sense. Jordy, anything else?

Speaker 1: No. Thank you for this wonderful gift. This is

Speaker 2: a wonderful gift. Thank you so much.

Speaker 15: Awesome. Thank you.

Speaker 2: Great to

Speaker 1: meet in person.

Speaker 15: Good to meet you as well. Have a

Speaker 2: great rest of your day. Impressive. We'll talk to you soon. We gotta talk about France, right? Do we get to We gotta out with France.