The industrial

of the future
A look at the industrial conglomerate of the future, and
how startups are making change

June 2018

1
Contents
3 Upcoming trends

7 Trend 1: Industrial cybersecurity

16 Trends 2: Edge Computing + Identity of Things

26 Trend 3: Biology + 3D Printing

41 Trend 4: Computer Vision

51 Trend 5: The future assembly line

61 Appendix of mentioned startups

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WHAT TO DO ABOUT IT

Upcoming trends
in industrial tech

3
NEXTT Framework: tracking emerging trends

Higher
Customer Adoption

Industrial Cybersecurity
Edge & Identity

Bioprinting New Assembly Line

Industrial Computer Vision

Lower

Lower Higher
Market Strength
Market Strength measures future market sizing forecasts, venture capital investment, investor quality, and similar metrics
4
Customer adoption measures current market sizing estimates, usage and churn data, social media sentiment, news coverage, and similar metrics
Startups enabling the industrial of the future
A visualization of the companies and themes discussed in this report.

CB Insights Content 5
New Trends Summary: findings & implications

Findings Implications

 Cybersecurity is transforming to handle industrial  Startup opportunity is booming for this new computing paradigm, and
edge devices industrial companies are poised to buy in

 Bioprinting is very nascent and unproven, but has  Today, it’s mostly in university labs, but a serious challenger could be
massive potential on the horizon

 Computer vision makes a strong business case  Defects are too small for the naked eye (especially in electronics),
and industrial robotics (currently booming) will also see
transformation with better computer vision-based safety

 Factories are planning for modularity  Names like Audi are piloting startup technology, and expecting that
modularity will yield greater efficiency than standard assembly lines

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TREND 1

Industrial
cybersecurity

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NEXTT Framework: tracking emerging trends

Higher
Customer Adoption

Industrial Cybersecurity
Edge & Identity

Bioprinting New assembly line

Industrial Computer Vision

Lower

Lower Higher
Market Strength
Market Strength measures future market sizing forecasts, venture capital investment, investor quality, and similar metrics
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Customer adoption measures current market sizing estimates, usage and churn data, social media sentiment, news coverage, and similar metrics
Industrial systems have proven vulnerable

Honeywell Opens First Asian Industrial

Cyber Security Center in Singapore
- ARC Viewpoints May 1, 2018

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Malware volume
has boomed 11X
since 2016
From 2016-17, threat
researchers from Cisco
discovered 224 new
vulnerabilities on third-
party devices, of which 74
(33%) were related to IoT
devices.

Cisco 2018 Annual Cybersecurity Report 10

Industrials face cyber damage but don’t change

N E A R L Y 1 / 3 RD O F M A N U F A C T U R E R S BUT HABITS AREN’T CHANGING

HAVE BEEN CYBERATTACKED

28% of manufacturers in a recent survey said they saw a loss Yet only 30% of executives said they’ll increase IT
of revenue due to cybersecurity attacks in the past year. spend in the coming 12 months.

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Good timing: C-suites are now showing interest
Mentions of “cybersecurity” on quarterly earnings calls. Q1’13 – Q4’17

Cybersecurity
mentions

CB Insights Content 12
AUTOMATE INDUSTRIAL CYBERSECURITY

Funding
$22M
Dragos is an automated industrial
cybersecurity company that sits on-
premise with customers to provide
them visibility into their assets.
The platform compiles and correlates
suspicious events at a scale and
speed that augments the work of
human experts.

Comparable companies
CyberX Claroty Indegy
$29M $32M $18M

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IT SECURITY FOR UNCARPETED AREAS GE Ventures
Investment

Funding
$85M
Mocana is developing a
device-independent Smart
Device Security Platform that
secures all aspects of IP
addressable devices as well
as the information,
applications, and services
that run on them.

SELECT INVESTORS

In-Q-Tel, GE Ventures,
Symantec, Trident Capital
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 INDUSTRIAL CYBER STARTUPS
Other names to watch
CyberX detects abnormal behavior by
analyzing the operational behavior of
the Industrial Internet.
SELECT INVESTORS
Upwest Labs, ff Venture Capital, Flint
Capital
Claroty provides extreme visibility into
the widest range of industrial control
system devices using passive
monitoring.
SELECT INVESTORS
Mitsui & Co, Innovation Endeavors,
Bessemer Venture Partners
Indegy provides real-time situational
awareness, visibility and security for
Industrial Control Systems (ICS) used
across critical infrastructures
SELECT INVESTORS
Aspect Ventures, Shlomo Kramer, Magma
Venture Partners
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TREND 2

Edge Computing &

Identity of Things

16
NEXTT Framework: tracking emerging trends

Higher
Customer Adoption

Industrial Cybersecurity
Edge & Identity

Bioprinting New assembly line

Industrial Computer Vision

Lower

Lower Higher
Market Strength
Market Strength measures future market sizing forecasts, venture capital investment, investor quality, and similar metrics
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Customer adoption measures current market sizing estimates, usage and churn data, social media sentiment, news coverage, and similar metrics
THE NEW NETWORK PARADIGM

More computation at the device level

Going to the edge

Thanks to better hardware and software, more machine learning is
possible at the device level, or the “edge” of the network. Peter
Levine of a16z anticipates an end to cloud for AV, drones, and IoT
objects.
Cloud computing latency has drastic downsides in IoT. Mission-
critical systems such as connected factories can’t afford delay for
certain connected machines.

Source: A16Z 18
Edge devices numbers are booming in industrial areas
Industrial devices are slated to be the largest segment of IoT. Already, manufacturing spend is already 3X
that of consumer IoT.

~18% YoY

Source: WSJ, Economist 19

WHAT DOES TOMORROW LOOK LIKE?

The future of industrial devices

As predictive insights get democratized (via GE Predix and other analytics suites), the final
chapter of IIoT will center on autonomy, decision-making, and nearing the “lights-out” factory.

Where we are now

Installing ‘things’ via Predictive insights Autonomous

retrofits and IIoT & digital twin responses

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 IOT & EDGE COMPUTING POSES NEW SECURITY RISKS

Edge computing is a new era of IoT/ IIoT whereby intelligent machines make
processing decisions locally vs. via a centralized cloud.

But we still don’t have security standards or fingerprinting.

Startups are developing tech to help identify and authenticate autonomous

machines for ensuring data protection, availability, integrity, and privacy.

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CHIP-LEVEL FINGERPRINTING FOR IOT

Funding
$6M
Intrinsic ID delivers device-unique data
security and authentication solutions for
the connected world.
Using proprietary SRAM technology,
security keys and unique identifiers can be
extracted from the innate characteristics
of each semiconductor. Similar to
biometrics measures, these identifiers
cannot be cloned, guessed, stolen or
shared.

Comparable companies
MagicCube CloudPost Xage
$10M $4M $12M

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BLOCKCHAIN FINGERPRINTING FOR INDUSTRIAL DEVICES GE Ventures
Investment

Funding
$12M
Xage, formerly Sensify Security,
offers a blockchain-based security
fabric for industrial edge devices.
Using blockchain principles like
Shamir’s Secret Sharing, Xage’s layer
creates a secure and tamperproof
fingerprinting environment in which
devices can operate.

SELECT INVESTORS
GE Ventures, City Light Capital, March
Capital Partners, Plug and Play
Accelerator, The Hive

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EDGE PROTOCOL FOR MOBILITY AND INDUSTRY

Funding
$7M
XAIN began as a University of
Oxford research project in
2014. As a universal access
control protocol, Xain is
looking to apply blockchain to
the edge devices in industrial
production and mobility.

SELECT INVESTORS

Early Bird Venture Capital,

Porsche Automobil Holding
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 THING-LEVEL IDENTITY AND SECURITY

Other names to watch

Rubicon Labs develops secure
communication products and protocols
that utilize underlying hardware, device-
level software, and cloud-based
computing architectures designed for
data center and IoT applications.
ReFirm Labs is developing products CloudPost Networks develops IoT
to detect security vulnerabilities in security and risk-reduction solutions
firmware that runs on Internet of that protect business-critical devices
Things devices. and systems.

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TREND 3

Biology + 3D printing

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NEXTT Framework: tracking emerging trends

Higher
Customer Adoption

Industrial Cybersecurity
Edge & Identity

Bioprinting New assembly line

Industrial Computer Vision

Lower

Lower Higher
Market Strength
Market Strength measures future market sizing forecasts, venture capital investment, investor quality, and similar metrics
27
Customer adoption measures current market sizing estimates, usage and churn data, social media sentiment, news coverage, and similar metrics
AROUND 2011, HYPE FOR 3D PRINTING BUILT UP

Early 3DP was a lot of smoke, little fire

In 2009, IP on fused deposition modeling (FDM) expired, allowing low-end challengers such as
MakerBot and Ultimaker to sell desktop 3D printing units below a then unheard-of $5K.

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Today’s 3DP market is mostly industrial-scale
A collapse in consumer demand has led to a commercial-scale renaissance with startups like
Carbon and Desktop Metal (both GE portfolio companies) taking center stage.

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CB Insights Content
Tomorrow’s 10X technology includes biology
It’s exotic now, but the vanguard of additive manufacturing is in university labs depositing cells.

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What does bioprinting solve?

P r o b l e m : Tissues and organs are in extremely

high demand in healthcare, often resulting in waiting
lists and donor matching. Additionally, today’s meat
and animal product industries have many negative
externalities.
S o l u t i o n : Leveraging innovations in biology and
regenerative medicine, bioprinting deposits cells in
3D, which can create tissues and organs from
scratch. The technology has a long way to go, but in
theory there is also no chance of rejection using the
patient’s cells. And future biogenerated materials
could be used in leather and meat production.

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Bioprinting vs. traditional 3D printing

BIOPRINTING STEPS TRADITIONAL 3D PRINTING STEPS

1. Prepare a CAD file with 3D software 1. Prepare a CAD file with 3D software
2. Take a postage stamp-sized sample of cells from
2. Load plastic filament (the ink)
patient (which can get turned into any type of cell)
3. Process cells into “bioink” and print into shape 3. Print into shape

4. Suture or surgically implant printed tissue onto 4. Post process (optional)

human
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‘WESTWORLD’ MEETS ADDITIVE

Less transplants, more implants

In 2016, Wake Forest’s Institute for Regenerative Medicine announced success
printing living tissue researchers designed over a decade, and indicate that the
structures have the right size, strength, and weight to be used in humans.

CAROTID ARTERY BLADDER LIVER

Source: Wake Forest 33

Biology and 3DP names are exploring bioprinting

L’ORÉAL AND POIETIS SIGN AN EXCLUSIVE

RESEARCH PARTNERSHIP TO DEVELOP
BIOPRINTING OF HAIR
- Loreal September 28, 2016

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GUTENBERG MEETS HUMAN TISSUE

Funding:
$22M
Aspect Biosystems
specializes in 3D bioprinting
and tissue engineering. The
company's proprietary Lab-
on-a-Printer platform
technology is enabling
advances in understanding
fundamental biology, disease
research, development of
novel therapeutics, and
regenerative medicine.

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MAKERBOT FOR LIFE SCIENCES

Funding
$2M
With a typical gantry and
single extruder, Allevi’s
desktop design is a riff on
consumer 3D printers. But the
company’s printers can
deposit collagen, protein inks,
and biopolymers like PLGA.
Right now, 90% of Allevi’s
customers are academics.

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CELL AND ORGAN PRINTING

Funding:
$2M
Based on 3D laser lithography,
Prellis’ tissue printing creates
layers of extracellular matrix
containing cells, at ultra-fine
resolution. Currently, the
company is printing single layers
of cells, as well as scaffolds for
organs from the inside out.

SELECT INVESTORS

SOSV, True Ventures, 415 Ventures,

IndieBio, Plug and Play Ventures

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SIX-AXIS COBOT ARM FOR 3D BIOFABRICATION

Bringing innovations from

collaborative robotics, Advanced
Solutions is using a six-axis arm
(now standard in industrial
robotics) to deposit bioink in 3D.
Its BioAssemblyBot can
automate printing for tissue
prototyping vascularized tissue.

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3D PRINTING GANTRY, EXCEPT FOR LAB AUTOMATION

Funding
$17M
Opentrons offers affordable,
open-source lab automation
tools that accelerate the
biodesign process. Its OT-2
gantry design is very similar to a
FDM desktop 3D printer, except
used for automated pipetting and
wetlab work.

SELECT INVESTORS

Khosla Ventures, Y Combinator,

Lerer Hippeau Ventures, HAX,
SOSV
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3D PRINTING PILLS FOR CUSTOMIZED RELEASE

Funding
$2M
Multiply Labs leverages 3D printing to
make made-to-order personal
supplements and timed pill delivery.
People can specify the duration of
delivery for drugs like caffeine to
take effect at the right time. The
company claims to use patent-
pending release technology
developed at MIT and the University
of Milan.

SELECT INVESTORS

Y Combinator, Fenox VC, Graph

Ventures
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TREND 4

Computer vision

41
NEXTT Framework: tracking emerging trends

Higher
Customer Adoption

Industrial Cybersecurity
Edge & Identity

Bioprinting New assembly line

Industrial Computer Vision

Lower

Lower Higher
Market Strength
Market Strength measures future market sizing forecasts, venture capital investment, investor quality, and similar metrics
42
Customer adoption measures current market sizing estimates, usage and churn data, social media sentiment, news coverage, and similar metrics
“Quality means doing it right when
no one is looking.”
Henry Ford, father of the assembly line

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 COMPUTER VISION CAN HELP FACTORIES GET LEAN

But there are limitations to how much

a human can be looking.

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 “DOING IT RIGHT” IS A MASSIVE INDUSTRIAL PROBLEM

“Despite huge investments in quality control,

automakers recalled nearly as many cars as they
sold in the U.S. in 2012. Ford and GM made
warranty payments of $5.7 billion in 2012, more
than half of the $10.5 billion they reported in net
income.”
Jon Sobel, CEO Sight Machine (GE Portfolio Company) via Wired

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INDUSTRIAL COMPUTER VISION, STARTING WITH FOXCONN

Landing.AI aims to help

enterprises transform for the age
of artificial intelligence, focusing
on the manufacturing industry.
Through mid- and long-term
strategic partnerships, the
company provides in-house AI
solutions, and has backing from
founder Andrew Ng’s AI Fund.

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QUALITY ASSURANCE AT 50 AND 50,000 UNITS

Funding
$10M
Instrumental makes easy-to-
deploy inspection stations
with computer vision
software that helps
engineering teams discover
and fix issues quickly on the
assembly line, whether they’re
in development or mass
production.
SELECT INVESTORS

Eclipse Ventures, Root Ventures,

First Round Capital
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 AUGMENTING WORKERS AND MACHINES

Machine vision will also enable

safer factories

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MAKING BIG ROBOTS SAFE

Funding:
$13M
Veo Robotics offers smart device
sensing and control solutions to
industrial robotics. Traditionally,
heavy-duty robots are unsafe and
need to be caged, but the
company’s vision system allows
these robots to be smart enough
to work alongside humans.

SELECT INVESTORS

Lux Capital, Google Ventures, Next47

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AR RELIES ON COMPUTER VISION TO MAP ENVIRONMENTS GE Ventures
Investment

Funding
$47M
Upskill develops enterprise software
for augmented reality devices in
industrial settings. Upskill's Skylight
software product runs on many types
of devices, integrates with existing
business systems, and is used today
in a wide range of industrial
operations including manufacturing,
field service, repair, training, and
compliance.
SELECT INVESTORS

GE Ventures, Work-Bench, New

Enterprise Associates, SalesForce
Ventures, Boeing HorizonX

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TREND 5

The future assembly line

51
NEXTT Framework: tracking emerging trends

Higher
Customer Adoption

Industrial Cybersecurity
Edge & Identity

Bioprinting New assembly line

Industrial Computer Vision

Lower

Lower Higher
Market Strength
Market Strength measures future market sizing forecasts, venture capital investment, investor quality, and similar metrics
52
Customer adoption measures current market sizing estimates, usage and churn data, social media sentiment, news coverage, and similar metrics
Today’s assembly lines vs. tomorrow’s modularity

ASSEMBLY LINE MODULAR LINE

• Low variety • Many model varieties

• Predictable, repeatable jobs • Variable process sequence

• High standardization for mass production • Mass customization

53
 90% of auto makers in a
BCG survey said they expect a
modular line setup will be relevant in
final assembly by 2030.

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MODULARITY PLATFORM FOR AUTO

Arculus offers a software and

AGV (automated guided
vehicle) platform to bring
Modular Production into
factories and warehouses
with real-time visualization.

SELECT INVESTORS

Audi

55
Beyond auto: Amazon patenting robot grippers
for modularity

Photos from a recent Amazon patent for a robotic manipulator that calls for a multi-
tooled end effector to handle both heavy/durable items and be flexible for light/soft
goods. Designing systems for variability is a key tenet of modular production.
Patent: Robotic Gripper With Digits Controlled By Shared Fluid Volume 56
ON-DEMAND MODULAR EQUIPMENT

Funding:
$2M
Vention is a browser-based 3D
machine builder platform that
enables designers to design and
order their custom industrial
equipment in a few days. The
platform is suited for the design
of fixed and automated
equipment in the fields of small
business automation, lean
manufacturing, product
validation and research, and
industrial design.

57
3D PRINT SERVICES + COBOTS

Funding:
$6M
Voodoo Manufacturing is a
Brooklyn-based startup that uses
commoditized 3D printing
technology to manufacture
plastic parts and products. The
company produces anywhere
from 1–10,000 parts in less than
2 weeks at injection molding
prices.

SELECT INVESTORS

KPCB Edge, Y Combinator,

General Catalyst
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 TODAY: TOMORROW:

Single-manufacture Decentralized factory

plants & supply chain networks collaborating

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DECENTRALIZING 3D PRINT SERVICES GE Ventures
Investment

Funding
$30M
Xometry is an on-demand
platform for decentralized
manufacturing that allows
firms to upload 3D models for
instant pricing, and then
employs a wide network of
CNC machining, 3D printing,
urethane casting, and sheet
metal fabrication.
SELECT INVESTORS

GE Ventures, BMW i Ventures

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Appendix: mentioned startups
Industrial Cybersecurity Biology + 3D Printing
Dragos Aspect Biosciences
Mocana Allevi
CyberX Prellis Biologics
Claroty Advanced Solutions Life Sciences
Opentrons
Multiply Labs
Edge Computing + Identity of
Things Computer Vision
Intrinsic ID Landing.ai
Xage Instrumental
Xain Veo Robotics
Rubicon Labs Upskill
Refirm Labs
CloudPost Networks
Future Assembly Line
Arculus
Vention
Voodoo Manufacturing
Xometry
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@cbinsights

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