Things looked grim for Franka Emika recently: The robotics company, founded in 2016, had to file for insolvency in August of this year after failing to secure follow-up financing. According to industry publication Automationspraxis, this occurred due to differences between shareholders. At the time, it was reported that Franka Emika’s order books were full and the interim insolvency administrator was confident that investors could be found to continue business operations.
At the same time, the Munich I state prosecutor’s office is investigating the startup for subsidy fraud, as first reported by Bayrischer Rundfunk. The company is accused of having employees continue to work full-time despite receiving short-time work benefits.
Agile Robots plans to invest in Franka Emika’s growth
Agile Robots is now acquiring the struggling company for an undisclosed sum. According to Business Insider, 33 million euros changed hands. The company plans to continue operating Franka Emika with its approximately 100 employees. It also aims to invest in the company’s further growth in Bavaria. This includes expanding the product portfolio, strengthening global sales, and continuing R&D activities.
Zhaopeng Chen, CEO and founder of Agile Robots, says:
“The merger of Agile Robots and Franka Emika is a strong signal for Germany’s robotics and AI location. With this acquisition, we have found an industrial solution that gives us the unique opportunity to create a Bavarian technology company with genuine global perspective. We look forward to shaping the future of Industry 5.0 together with Franka Emika’s employees.”
Rory Sexton, VP Operations at Agile Robots, adds:
“With this merger, we accelerate the implementation of our international growth strategy. The combination of high AI and software expertise with leading robotics technology strengthens our innovation power and ability to bring demand-driven, market-ready products to market. This is good for the location, for the employees, and for customers of both companies.”
Patent issues
However, the acquisition is accompanied by a problem that could prove troublesome for Agile Robots. According to Handelsblatt, Franka Emika sold the rights to approximately 700 patents just weeks before filing for insolvency. While the insolvency administrator is working on unwinding the sale and shareholders have obtained preliminary injunctions against the purchase agreement, whether these steps were successful remains unclear.
At the same time, Agile Robots’s connections to China are being scrutinized. For example, Foxconn Industrial Internet, based in Shenzhen, China, is among the investors in the startup. Together with Japanese SoftBank and the founders, the OEM holds a majority stake in the company. Among other investors are Linear Ventures and Hillhouse Capital, further investors from China. Additionally, five of the seven board members of Agile Robotics are entrepreneurs and investment managers from Shanghai and Beijing, according to Business Insider. The publication also reports on a letter from Munich entrepreneur brothers Christoph and Martin Schoeller to the Federal Ministry for Economic Affairs warning against a sale to Agile Robots, as the company is “controlled by entities and institutions based in China.” The brothers were also interested in acquiring Franka Emika.
