Oregon robotics company says the industry needs a reality check: ‘I really want to pop that bubble’

The internet is full of videos of robots running races, doing backflips, dancing and playing soccer.

Doing real work, though? Jonathan Hurst says that’s harder than it looks.

He’s co-founder of Agility Robotics, the Salem company that makes Digit — the rare humanoid robot with an actual job. Standing 5 feet, 9 inches tall, Digit works in warehouses and factories, lifting and stacking heavy boxes.

That kind of activity doesn’t make for a great social media video, but Hurst said it’s useful work that adds to productivity — something customers will actually pay for. In an increasing competitive industry, he said that’s what separates Agility from the pack.

“There’s so much hype and so much storytelling that is not connected to reality. And I really want to pop that bubble a little bit,” Hurst said.

Founded in Oregon State University’s robotics lab a decade ago, Agility hopes this is its breakout year. The company is opening a big engineering office near Silicon Valley, readying the fifth generation of Digit, and preparing to go public in a deal that values the business at $2.5 billion.

Agility wants to differentiate itself with workhorse robots that can safely work alongside people. Digit v5 will be the first of its robots engineered to watch out for its human colleagues, and Hurst said that increases its utility immeasurably.

“A humanoid robot is so much more valuable when it doesn’t have to be in a cage,” he said. The company says it doesn’t expect robots will eliminate human jobs, asserting instead that the kinds of work people do will change — and that robots need to be built to work with people.

Agility has already raised about $390 million from early investors. It anticipates raising another $600 million by offering shares to the public.

It plans to accomplish that by merging with a publicly traded investment fund called a special purpose acquisition company. SPACs bypass the cumbersome regulatory steps associated with a conventional initial public offering.

Many SPACs haven’t withstood investor scrutiny, though, with valuations collapsing when they hit the public markets.

That’s what happened to Portland vacation management company Vacasa, which went public in 2021 with a market value of $4 billion. Vacasa failed spectacularly in delivering on its promises to investors and sold last year for just $114 million after a string of layoffs.

Agility hopes the heightened expectations that come with going public will prove that its robots are more than hype, and that it’s already a viable business.

A Digit robot costs about $400,000 to buy and operate over its lifetime, according to Agility. Analysts at Bernstein Research crunched the numbers on humanoid robots in a report this month and concluded prices must come down 30% to 50% for them to be commercially viable.

Agility says Digit already pencils out, because it operates for 20% less than it would cost to employ a person doing the same job over the robot’s five-year life.

“We are just about at that cost, at that exact cusp, where we’re able to make a profitable business selling robots while also providing value to a customer,” Hurst said. He said costs will come down, though, as Agility improves its materials and the underlying technology and as production scales up.

The company says its “RoboFab” in Salem is capable of producing 10,000 robots a year. Agility hasn’t said how many it makes now or reported detailed financial results but it says it spent about $100 million last year on operations.

Agility employs about 400 people across the company. It’s planning for 200 employees at its new software office in Fremont, California. Hurst said the company, which also has an office near Carnegie Mellon University in Pittsburgh, had to go elsewhere for software engineers because it can’t find those workers in Oregon’s small tech ecosystem.

“We don’t have experienced talent here in the specific areas that Agility needs,” he said.

The state does occupy a strong niche within the robotics industry, said Hurst, owing to the robotics program at Oregon State. He said the emerging fields of robotics and artificial intelligence are so big they can’t all be in California, giving Oregon the opportunity to create an ecosystem that welcomes entrepreneurs and embraces new technologies.

“Do we need to go and beat them and be better than MIT or Carnegie? No,” Hurst said. “We just have to be successful in Oregon.”

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