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Merger will take automation start-up public after 3 years

18 May, 2021

A Californian start-up that specialises in intelligent, software-based manufacturing, is merging with a SPAC (special-purpose acquisition company) to become a publicly listed company just three years after it was founded. San Francisco-based Bright Machines has doubled its revenue every year since its inception in 2018 and currently employs more than 500 people, including 150 software engineers. It is projecting a CAGR of more than 84% for the five years from 2020 to 2025, and expects to achieve $727m in sales and a gross margin of 50% by 2025.

The proposed merger with SCVX values Bright Machines at $1.1bn, with a post-transaction equity value of $1.6bn. The deal is expected to provide up to $435m in gross cash, including $230m of cash held in trust from SCVX and a Pipe (private investment in public equity) of $205m. Bright Machines plans to use the funds to accelerate its growth, expand into new markets and develop software for applications such as production analytics and quality inspection. The transaction is expected to complete in the second half of 2021

Bright Machines’ founders believed they had spotted an opportunity to bring software-defined intelligence to the factory floor and enable customers to modernise their manufacturing operations with speed, simplicity, and flexibility. There are now about 60 installations of its flagship product, the Bright Machines Microfactory, being used by 25 customers in areas ranging from network infrastructure and consumer goods, to automotive and medical devices.

Bright Machines has r&d centres in the US and Israel, with field operations in Mexico, China and Poland. The company has an IP portfolio based on AI algorithms and 36 patent filings.

Bright Machines argues that the recent supply chain disruptions, compounded by pandemic-induced factory closures and labour shortages, and increasing tensions around global trade and tariffs, have turned global manufacturing on its head. Many companies are accelerating efforts to onshore or re-shore production to secure their supply chains and build products closer to their end-users. Bright says that it can offer these companies the ability to deploy fast, flexible, and intelligent automation at a speed and cost that will scale with their operations, and offer them benefits such as increased productivity, improved yields, and reduced headcounts.

In one application, Bright Machines helped a power tool manufacturer to automate the assembly of brushless motors.
Previously, tedious manual operations were needed to mount the motors' control PCBs. The original processes also required a plug to be inserted every 10s, which was impossible to maintain in a manual operation. Bright Machines’ Microfactory now handles all of the necessary steps: dispensing sealant onto the back of the control board; picking up the board and placing it; and then welding the pieces together. The assembly line in fully automated and almost touch-free, and has cut costs by 72%. The cycle time is now 6s and the yield 98%.

Bright Machines’ Microfactory is a flexible, modular assembly line that can be configured to handle almost any assembly process previously done by hand
Photo: Business Wire

“At Bright Machines, our mission has been clear from the start: to bring software-defined intelligence down to the factory floor and enable our customers to effortlessly modernise their manufacturing operations,” says CEO and co-founder, Amar Hanspal. “Our industrial automation platform, powered by proprietary software and AI-driven solutions, allows even the most traditional manufacturing companies to quickly and easily deploy flexible automation solutions at scale.

“We believe that our technology represents a big leap in the transformation of manufacturing, as companies adapt to growing consumer demand, intensifying competition and the refactoring of global supply chains to improve resiliency and sustainability,” he continues.

“Going forward, we plan to substantially accelerate our growth and better service our customers by doubling down on software and expanding our reach through new sales channels and geographies. We believe our fundamentals are strong, we are executing to plan, and we are well-positioned to continue driving value creation and improved manufacturing outcomes.”

Bright Machines’ chairman Carl Bass – who is a former CEO of Autodesk – adds: “It is clear that Bright Machines’ differentiated, software-driven approach to industrial automation has the potential to completely up-end traditional manufacturing methods. The company has demonstrated product-market fit and is seeing accelerating customer interest and broad deployment of their solutions. The opportunity in front of the team is simply enormous.”

Mike Doniger, CEO and chairman of SCVX, with which Bright is planning to merge, says that its “innovative, industrial automation technology provides a crucial pathway for manufacturers to upgrade and secure their factories for the realities of the 21st century. Geopolitical tensions and the increasing threat of cyber-attacks on manufacturing facilities are making it even more important for companies to minimise their supply chain risks and prepare for a world of distributed manufacturing.

“The momentum we have seen from Bright Machines in the nascent, but critical, space of software-defined manufacturing proves the strength of their solution and strategy,” he adds. “They are dramatically improving the speed and economics associated with the adoption of smart production lines and, eventually, fully programmable factories. We are thrilled to be partnering with Bright Machines and look forward to working together to revolutionise how products get made.”

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