Venture Investments In Deep-Tech And Physical AI – Seed To Exit

Physical AI and AoT® (Autonomy of Things) is all about sensing and movement. The IoT revolution 3 decades ago ushered in connectivity between static physical machines and computers. AoT® connects static and moving Things, sensors and localization data to create autonomous movement. The environments in can vary – from uncontrolled (autonomous cars in dense urban environments), semi-controlled (autonomous trucking on highways, autonomy of blue collar vehicles in construction, agriculture and mining, drones in regulated airspace, robots and drones monitoring infrastructure) and controlled (robots in industrial settings and campuses, rail and shipping yards, warehouse logistics). The operations are typically carried out in harsh conditions - weather, dust, vibration and shock. The drivers for AoT® are capital efficiency, productivity, quality of life, safety, and addressing the acute shortage of skilled human labor in various physical industries.

In general, the AoT® revolution was driven by large corporations – Caterpillar and John Deere have been investing in partial or full autonomy for at least 3 decades, while the DARPA Grand Challenge of 2006 spurred on the driverless car movement, initially pioneered by Google (Waymo), and subsequently by Baidu, Uber, Tesla and large automotive OEMs. Physical AI is tough – it takes patience, innovation, data and extensive testing before it can generate revenues. Traditional venture capital stayed away from it.

Linse Capital - We fund companies that move the world

Linse Capital, has backed deep-tech and physical AI companies for the past 2 decades, with ground breaking investments in companies like Skydio, Waabi and Wayve. Linse’s evaluates investment opportunities starting at the seed to later stages. Actual funding was limited to late rounds where it took controlling positions and made large investments (~$100M/deal, ~$1.7B total).

Examples of the investment areas and companies are discussed below and Figure 1: