✂️2/3/23 - Scythe Robotics
Step aside, Tesla autopilot.
Happy Friday! When I initially read about this startup in this week’s edition of CTVC, I was heavily reminded of the feeling of reading about Rinsed for the first time. Unlike Rinsed, however, this startup is… surprisingly revolutionary. This week’s edition is 880 words (~4 minutes). Hope you enjoy!
Scythe Robotics: electric autonomous lawnmowers
The landscaping market has faced severe labor shortages for many years. It has failed to advance technologically for decades, and there have also been few remedies for the lack of manual labor. In full-service landscape management companies, mowing operations account for 40 percent of labor utilization.
Scythe Robotics is using automation to tackle labor shortages in the commercial landscaping industry. With their autonomous electric robots, Scythe offers a sustainable and versatile lawn mowing solution.
Co-founders Jack Morrison and Isaac Roberts were ex-cofounders of Replica Labs, a computer vision software for smartphones. Replica Labs was acquired in 2015 by Occipital where Davis Foster, Scythe’s third co-founder, worked at the time. Until recently, gas-powered push lawnmowers have been the only option on the market. The investor hype surrounding Scythe will likely bring attention to the stunted landscaping industry.
Product
Scythe’s most recent generation of M.52, their proprietary lawn mower, provides a few unique features:
Autonomous. The M.52 eliminates the need for manual labor. Their AI enables each robot to rapidly adapt to unstructured environments and uses its 360° perception to optimize pathing. Their robots adjust mowing speeds based on grass thickness to avoid damaging vulnerable grass which guarantees a clean, uniform cut.
Electric. Gas-powered lawnmowers account for 5% of air pollution in the US, and every hour of operation emits the same amount as a 300-mile car ride. Scythe’s electric robots reduce emissions significantly. Each charge lasts enough for a M.52 to run for an entire day.
Cost-effective. Instead of selling their robots directly, Scythe leases their robots and charges customers based on usage. Users also don’t need to pay for fuel (although they are responsible for charging). Each robot's lifetime is nearly 50,000 hours, over 10x as much as standard lawnmowers, allowing Scythe to lease at significantly lower upfront costs.
Market
Landscaping Industry
Landscaping services in the US represent a $176.5B industry. Landscape maintenance services such as lawn care and mowing account for 90% of the market. Currently, the industry is extremely fragmented, with 33 states having at least one large landscaping firm.
The success of the industry is heavily dependent on levels of disposable income. Landscaping services encountered a prolonged decline throughout the COVID-19 pandemic due to social distancing as well as higher price consciousness. Widespread economic optimism for 2023 has revived the industry, posing an opportunity for growth.
Target Customer
Scythe’s robot fleets are intended for commercial landscape contractors seeking to electrify their utilities, increase efficiency, and reduce labor pains. Since coming out of stealth in June 2021, they’ve amassed over 7500 reservations and claim to be booked until “late 2023/early 2024”. Scythe currently has robots deployed in Texas and is currently rolling out to customers in Florida. It is unclear whether they are currently targeting southern states out of high demand or due to tricky grass types/heights native to northern states.
Source: Husqvarna. “Warm season” grass in southern states is recommended to be cut shorter than “cold season” grass in northern states.
Competition
The landscaping equipment industry is dominated by multinational corporations, many of which have pursued autonomous and/or electric lawn-mowing technology themselves. Husqvarna, a Swedish outdoor power products company and one of the oldest continuously running companies globally (founded in 1689), provides a wide array of autonomous robots capable of accommodating different blade heights and yard sizes. Toro (NYSE: TTC), a Minnesota-based manufacturer of landscape & irrigation supplies, plans on releasing its IoT-integrated autonomous lawn mower in the spring of 2023. Both appear to primarily operate as B2Cs but also have product lines across all sectors - public, private, commercial, and residential.
Scythe’s competitive advantage lies in its focus strategy. By targeting commercial landscapers, Scythe addresses a niche customer segment. This enables various unique benefits; for example, by aggregating fleet analytics, they can minimize operating inefficiencies much more easily compared to individual customers.
Business Model
Scythe operates on a Robots-as-a-Service business model (RaaS) where they lease their robots to landscapers, then charge their customers on a pay-as-you-mow pricing model. While their customers are in charge of basic functionality (namely charging the robot & keeping the tires inflated), Scythe retains responsibility for the maintenance and upkeep of each robot, allowing for reduced mowing costs by up to 40%.
Traction
Since its founding in 2018, Scythe has raised over $60M in fundraising. The most recent Series B was a $42M round led by Energy Impact Partners, True Ventures, and Inspired Capital, putting their valuation at $102M.
Their website features the logos of 17 different leading landscaping firms they’ve partnered with, suggesting a significant need to rapidly upscale to meet the 7500+ reservations. Despite this, their open positions are largely engineering jobs, which points towards prioritization of product development.
Key Opportunities & Risks
Rise in Automation
“Automation has found its way into other segments of the market beyond just supporting automotive applications”
- Jack Morrison, co-founder & CEO of Scythe Robotics
Robots, namely robotic arms, have predominantly been a tool used to streamline the automotive supply chain. However, since 2020, the automotive industry no longer represents the majority of automation use cases. The growth in modern technology has enabled an expansion in robot use cases horizontally (farming, inventory management, e-commerce, etc.) and even vertically (not just robot arms, but also drones and IoT smart devices). The hype around automation significantly affects customer willingness to pay for autonomous devices, including autonomous lawnmowers.
Thank you for reading! This week’s startup was pretty amusing - kind of like Rinsed, a B2B SaaS for carwash businesses. Feel free to check out my memo on it here. See you all next Friday!