Our Investment in Formic: Making Automation Accessible for Those Who Need it Most

Blackhorn Ventures is thrilled to announce our latest investment in Formic, a business set to revolutionize manufacturing with their industrial Robots-as-a-Service (RaaS) platform. Leading the $27.4 million Series A+ round alongside co-investors Mitsubishi HC Capital America, NEC, Translink Capital, Alumni Ventures, FJ Labs, Lux Capital, Initialized Capital and Lorimer Ventures, we are excited to support Formic in their mission to revolutionize manufacturing by making automation accessible to the 90% of US manufacturers not currently leveraging automation – especially to small and medium-sized manufacturers.

Led by serial entrepreneur Saman Farid, Formic is democratizing access to the latest robotic systems, offering a scalable, flexible solution that aligns with the diverse needs of manufacturers.  What the PPA did for solar, Formic is doing for industrial robots; offering Robots-as-a-Service to make automation simple, affordable, and fast – ensuring businesses of all sizes can thrive in the global marketplace. Formic handles all scoping, design, deployment, monitoring, and maintenance for a robot for one low hourly rate, saving manufacturing and industrial companies time and money from their first day of service.

Formic has deployed its fleet of robotic automation equipment in 60+ facilities, generating $20M+ in total contract value, wth a 97% renewal rate, and strong upselling of the expanding customer base. Formic delivers a 50% reduction in industry standard implementation time, delivering value faster than traditional robotics vendors.  They are OEM agnostic, and boast a 99.43%+ uptime over the last 12 months with over 100k production hours achieved this year.  Most importantly, they allow for cost-competitive robotics in areas where labor shortages are a major limiting factor for manufacturing output.

The adoption of robotics and automation on the factory floor are being accelerated by rising labor costs, growing production demands, advancements in technology, geopolitical pressures, and supply chain disruptions necessitating reshoring​​. The U.S. is currently facing a severe labor shortage, particularly in the manufacturing sector: compared to pre-pandemic levels this critical pillar on economic competitiveness has 1.9 million fewer workers. This shortage is exacerbated by an aging workforce;10,000 baby boomers retire every day, which will result in 2-2.5 million manufacturing jobs unfilled by 2030. The traditional labor market is struggling to keep up, driving the need for solutions to boost industrial productivity amidst an unprecedented boom in American manufacturing.

Introducing automation into a manufacturing production process for the first time using the traditional playbook is a daunting task. There is only 1 robotic programming engineer for every 11 manufacturing facilities in the US. Existing engineering and maintenance teams inside these facilities don’t have the skill sets to operate and maintain automation equipment after it is deployed. This leads to a continued degradation in system performance over time, resulting in abandonment of automation and a return to “the way we’ve always done it”. These failures are the hallmark of traditional automation projects and the entire reason Formic was founded. The team developed Robots-as-a-Service to eliminate financial and operational barriers and deliver a guaranteed way for US manufacturers to have continued operational success resulting in increased productivity, quality, and safety.

A Brighter Future Through Automation in Manufacturing

Formic provides fully managed automation with no upfront capital expenditure. Their service includes 24/7 monitoring, maintenance, and performance guarantees. By leasing robots to industrial customers on a short-term basis, Formic allows businesses to reduce operating expenses by 40%, double production capacity, and start making payments only after the system is operational. Formic offers flexible contracts and the ability to scale automation as needed, making it easier for manufacturers to adopt and benefit from off-the-shelf robotic technology.

Formic’s vertically integrated RaaS platform de-risks the process of scoping, deploying, maintaining, supporting, and repurposing of robots for its customers. Key components of Formic’s technology stack include:

• Ant (Edge Device): An embedded IoT product that interfaces with Formic’s robotic fleet, enabling real-time data gathering for advanced analytics and diagnostics.
• Core (Operating System): An equipment agnostic operating system accessed through a simple touch screen interface, making deployment and operation faster and easier than ever before.
• Colony (Fleet Management): A SaaS product that integrates maintenance, billing, asset management, and performance data, automating fleet management decisions with machine learning.
• Portal (Customer UI): A mobile and web-enabled application providing customers with comprehensive data on their robots, from billing to usage specifics.
• Swarm (Engineering Tools for Integrators): Augmented reality and workflow automation tools for scoping, designing, simulating, and generating blueprints for robotic deployments​​​​.

Enhancing Competitiveness and Sustainability Through Automation and Reshoring

Formic’s approach enhances manufacturing competitiveness by unlocking capacity to enable streamlined reshoring and reduction of transportation-related emissions. Domestic supply chains, estimated to emit 25% less than their global counterparts, will benefit from increased production efficiency and reduced workplace injuries. Robots are expected to create more high-quality jobs than they displace, transforming the manufacturing landscape and improving working conditions. By enabling a significant reduction in long-distance transportation by strengthening domestic production capabilities, Formic is having a meaningful impact on reducing greenhouse gas emissions.

The Formic Team: Domain Expertise Across Robotics and Fintech

Formic is led by a seasoned team of experts in robotics, finance, and automation:

• Saman Farid, Co-Founder and CEO: An experienced operator and investor, Saman previously founded an e-commerce company and Comet Labs, a venture capital firm focused on robotic automation. He also served as Head of US Investing for Baidu Ventures.
• Jack Wagler, CFO: Promoted to CFO in June 2022, Jack was previously Treasurer and VP of Finance at Formic. He has extensive experience in specialty finance, having worked at Tyr Partners and EY.
• Steve Olszewski, COO: Prior to joining Formic, Steve was General Manager at Financeit and President and CEO of Spruce Finance, where he managed residential distributed energy resources​​.
• Shawn Fitzgerald, VP of Marketing & Sales: In his previous roles as President of Thomasnet and CMO at Xometry, Shawn managed manufacturing marketplaces providing supply chain solutions for US manufacturers.

At Blackhorn Ventures, we believe in the transformative power of automation to revitalize our industrial base.  We’re proud to support Formic in their mission to revolutionize the manufacturing industry. For a limited time Formic is allowing select US manufacturers to try robotic palletizing in their facility for just $4,750 / month, shipped in 24 hours, fully installed and with 100% maintenance included – for more info click here. For more information on open roles at Formic, visit their job board here.