Bankruptcy liquidation, Chinese capital takes over, another star German company changes its name to China?

introduction:

After Kuka, Franka also became a "national brand".

The recent explosion of humanoid robots seems to mark 2023 as the first year of robot awakening. Not only has it attracted cross-border giants to enter the market, VCs have also invested heavily, leading a number of concept stocks to take off on the spot, and the "Guiding Opinions on the Innovation and Development of Humanoid Robots" issued by the Ministry of Industry and Information Technology has added fuel to the hot track.

Under the huge momentum of humanoid robots, even the collaborative robots that have attracted huge investments from many star capitals such as Sequoia, Hillhouse Capital, and Matrix Partners and are hailed as the "favorite" of the financing circle have been dimmed.

Who would have thought that the collaborative robot, which has been keeping a low profile for a long time, has made a big move quietly. In just a few months, it has brought two explosive news, causing a "big earthquake" in the industry capital circle:

First, South Korea's Doosan Robotics was successfully listed and its market value reached 3 billion US dollars; second, the German robot company Franka Emika, which was recognized as an "academic star" in the industry, filed for bankruptcy, and after two months of liquidation and fundraising, it was acquired by Agile Robots at a "bargain price" of 28.5 million euros.

01 The collapse of a collaboration giant?

Academic darling

In terms of market response and public awareness, Franka is not eye-catching in the busy collaborative circle, and is even so low-key that it is difficult to find. But for the academic community, Franka, which has helped countless researchers complete experiments and graduation projects, can be regarded as an unavoidable mountain in the field of collaborative robots.

Franka Emika was founded in 2016 and is headquartered in Munich, Germany. It was founded by Dr. Sami Haddadin, formerly of the German Aerospace Center (DLR).

Franka has few products, one is Franka Production 3 (FP3) for industrial manufacturing, and the other is Franka Research 3 (FR3) for scientific research and education. However, for the industrial field, seven-axis force control lacks suitable application scenarios. The price of one FP3 is almost enough to buy two six-axis collaborative robots with similar configurations. It is too extravagant and a bit overkill, so FP3 did not make much of a splash.

What really made Franka famous was Panda (now upgraded and renamed FR3). Panda is open, can provide rich information and control interfaces, has a higher control frequency than similar products, and has very smooth force control, making it a collaborative robot very suitable for experimental teaching.

At that time, collaborative robots with force control were often expensive, and the KUKA iiwa, which cost nearly one million RMB, was daunting for many laboratories. However, based on a deep insight into the pain points of the industry and inspired by human agility and touch, Franka innovatively developed an affordable force-controlled robot, filling the gap in lightweight seven-axis collaborative robots. Two years after the product was launched, it was successfully featured on the cover of Germany's Time magazine as one of the 50 innovative projects, and won the German Future Award and Innovation Award.

Franka became famous overnight and successfully attracted the well-known equipment manufacturer Voith to invest in it. Skion, an investment company controlled by Susanne Klatten of the BMW family, also provided it with a loan.

Bankruptcy liquidation

In September 2023, Franka's official website announced that the company had filed for bankruptcy liquidation in the context of irreconcilable shareholder disputes. At the request of Franka's management, the Munich District Court ordered preliminary bankruptcy management on August 25, 2023, and appointed restructuring expert Matthias Hofmann as preliminary bankruptcy administrator. The company's founder Sami left the company's board of directors, and Franka officially entered bankruptcy proceedings.

The industry was shaken when the news came out. No one expected that Franka, which frequently appeared in major top magazines and had almost become a standard feature of major robot laboratories, would go bankrupt.

On September 4, Franka announced that although the conflicts at the shareholder level would not be disclosed for the time being, the rumor that the company's sales were poor due to the lack of in-depth industrial applications was just a rumor.

But selling well does not mean making money. Whether a company is profitable is closely related to product lines, cost control, sales volume, inventory and shipment, supply, etc. Franka, which has made a name for itself through academic reputation, has also fully reflected the characteristics of scientific researchers' entrepreneurship in its development: it targets targeted customers in niche fields, has a stable customer base but a narrow sales area.

The reason why Panda is so popular, in addition to its performance, is that it is cheaper than other similar seven-axis force-controlled robots. This is crucial for scientific research institutes with tight funding. It also means that Franka has kept its own profits very low.

However, Panda is cheap only for scientific research and experimental scenarios. If it is put into industrial applications, it will be a losing deal for both Franka and the manufacturer in the short term. In addition, Franka's product matrix is ​​not perfect, and it has not established a product line with multiple loads, multiple arm spans, and multiple speeds. If it wants to achieve large-scale deployment to meet production needs, it will undoubtedly have a long way to go.

At the end of last year, Franka was involved in a number of labor disputes and was suspected of subsidy fraud, and was in a dilemma of not being able to pay wages normally after accepting orders. Franka, which has not really entered the industrial market and lacks external financial support, has come to the point where it is difficult to continue, which is in line with the saying that success and failure are due to Xiao He.

02 Acquisition battle resumes

The bankrupt Franka needs to find a buyer, but time is very tight as bankruptcy relief is only paid until the end of October.

For investors, Franka's accumulated technology and reputation are in themselves a huge fortune. At this sensitive time, the market value is bound to take a big dive. Taking over at this time is undoubtedly a very cost-effective transaction.

As expected, as soon as the news came out, three companies extended olive branches to Franka: Agile Robots, which also focuses on high-end collaborative robots, Schoelle Group, a well-known German company, and Neura Rootics, a well-known robot startup that was once thought to be a subsidiary of Han's Robotics in Germany.

After fierce competition, Siling Robotics finally won and successfully acquired Franka for 28.5 million euros (220 million yuan). The target company's revenue last year was 7.9 million US dollars. This price can be called a "bargain".

Recently, the acquisition plan of Franka by Siling Robotics was also approved by the bondholders committee. Both parties said that the specific details are confidential. Siling Robotics also announced on its official website that after the acquisition, it will provide continuous support for Franka Emika's team of more than 100 people in subsequent business expansion, product development and R&D projects.

Why is Si Ling?

The fact that Si Ling was able to successfully win over Franka is inseparable from his background.

Siling Robotics was founded in Munich, Germany in 2018. Its founding team was also born out of DLR. Its technical background is the same as Franka. Its flagship product is the Likong seven-axis collaborative robot and its supporting solutions. It has also been deeply rooted in the fields of education and scientific research.

The two companies have overlapping backgrounds and applications, so it will be much easier for them to integrate in the future. Franka's strong R&D capabilities are the icing on the cake for Siling. As the company's CEO and founder Chen Zhaopeng said, "This transaction not only enhances Siling Robotics' industry competitiveness, but also benefits customers across the industry."

Moreover, Siling has strong capital strength and management advantages. RMB 200 million is a very suitable price for Siling, which is favored by capitals such as Softbank, Hillhouse, Sequoia, and Xiaomi, and has a valuation of over US$1 billion, becoming a unicorn.

This transaction can be regarded as a natural outcome due to the promotion of various factors.

There are still variables in the acquisition

Cross-border acquisitions have always been subject to scrutiny by both countries. Given the blockade of Chinese high-end technology by Western capital, it remains to be seen whether Siling can successfully acquire China.

The controversy stems from Siling’s Chinese background. Although Siling’s technology originated from Germany’s DLR, its investors are mainly Chinese institutions. Therefore, once Siling successfully acquires Franka, it will be equivalent to allowing Franka, a German local robot company, to transform itself and enter the Chinese capital camp.

This is a sensitive issue for Germany, which is in the vortex of Sino-US technological competition. After all, as the Sino-US struggle intensifies, technology is hard power, and the pros and cons of Chinese companies entering the German merger and acquisition will rise from the commercial level to the political level.

After Schoeller was eliminated from the bidding, a warning letter was sent to the German Federal Ministry of Economics, launching a fierce public opinion offensive against Siling. The letter stated that Siling Robotics is actually a company headquartered in China and controlled by Chinese institutions. Future production will be mainly carried out in Beijing and Shenzhen. The members of the Supervisory Board are also basically Chinese. There is a risk of cutting-edge technology flowing out of China, and intervention is required. At the same time, the group also wrote a letter to the German Ministry of Foreign Affairs, warning that if the transaction is successful, Franka technology may be used for military purposes.