Vention raises US$110M in bid to automate more manufacturing

Montreal-based Vention has raised US$110 million in new funding as the robotics supplier tries to sign up more major manufacturers and expand its business in Europe.

Investors in the Series D round include new backers Investissement Québec, Desjardins Capital and the venture arm of Nvidia. “We’re building the next industrial automation giant,” said Vention CEO Etienne Lacroix.

The firm will use the money to hire more staff to work with large clients; fund its geographic expansion; develop its physical AI capabilities; and add new sector-specific applications to existing packages like collaborative robot palletizers for food and beverages, and automated welders for machine shops. Vention plans to add as many as 40 people to its 306-person workforce.

Founded in 2016, Vention initially targeted small and medium-sized manufacturers who were putting their first robots on their shop floors. These days, sales to big businesses like 3M, Hershey, L’Oreal and Pratt & Whitney make up half of its revenue.

Manufacturers use Vention’s technology to buy and run everything from a robot arm on a pedestal to full production lines. Engineers can design machines on Vention’s online platform, selecting from a catalogue of the firm’s own components in its signature blue, as well as parts sold by equipment makers like ABB, Fanuc or Boisbriand, Que.-based Kinova.

Vention’s software simulates how the robots will operate on the factory floor, and writes code to make all the pieces work together. The firm then ships the machines to clients, and provides them with ongoing support and servicing. 

Vention makes money from sales of its own hardware and a cut of third-party components, as well as software subscriptions and extra fees for particularly complicated builds. A single order can run anywhere from $40,000 to nearly $5 million. The firm’s revenue is just under $100 million annually, according to Lacroix.

The company’s main competition is system integrators, consultants to whom manufacturers outsource the design and development of equipment. Vention claims it’s 40 per cent cheaper than that approach, and gives its clients more control over their machines because all its hardware and software is interoperable with each other and that of other suppliers.  

“We’ve become the default platform—the standard-setters inside the factories,” Lacroix said. He sees plenty of room to grow in the enterprise market, where large manufacturers are always adding and swapping out machines. 

Vention also sells similar technology to a range of sectors, meaning its business can adapt when demand shifts. “We’re an extremely good proxy for what’s going on in the world of manufacturing,” Lacroix said. 

During the pandemic Vention helped to automate manufacturers of doors and windows when orders spiked during the work-from-home renovation boom. The firm then built machines for electric vehicle makers like Lion Electric, Lucid, Rivian and Tesla that were expanding production. Today, Vention is seeing strong demand from defence contractors selling to expanding militaries, as well as firms that supply cooling and electrical systems for data centres. 

The firm has continued to grow despite subdued manufacturing activity in the U.S., its biggest market, driven by high interest rates and tariff-related uncertainty, said Jean-Simon Cayer, an Investissement Québec principal focused on industrial tech. He added that Vention is likely to benefit from long-term trends like the reindustrialization of Western economies and aging workforces.

The new round marks Investissement Québec’s first direct investment in Vention. It’s a “pivotal time for the manufacturing sector,” said Alex Laverdière, vice-president for venture capital at the provincial business-support agency. “Companies are in a position [where] they need to accelerate automation—the competition is stronger.” 

Vention’s newest backer also plans to help the firm expand in its home province. Quebec’s manufacturing base is dominated by sectors like aerospace or wood products that make a wide variety of goods at low volumes. “It has always been difficult for them to adopt industrial automation,” said Cayer. “It was too complex [and] too costly.”

Investissement Québec hopes Vention’s technology will provide an affordable solution, and help it pursue its mandate to boost provincial productivity. Last week, the agency and fellow Vention investor Fonds de solidarité FTQ launched a new program with non-profit Québec Tech to encourage big businesses in the province to buy from local tech firms.  

Vention’s latest funding round increases the firm’s valuation, which is over $1 billion, Lacroix said. He added that the company has expanded its margins and reduced the amount of cash it’s burning over the last three years, and is likely to reach profitability in another three. The company will eventually look to go public. “Manufacturing automation is a long game,” Lacroix said. “Vention is the startup that has scaled the most.”