Agility Robotics faces strategic crossroads amid production expansion

Agility Robotics, a pioneering company spun out of Oregon State University, is navigating a pivotal phase in its evolution as it scales up production of its flagship robot, Digit.

At the Fortune Brainstorm Tech event in Park City, Utah, Digit, the leading robot from Oregon's Agility Robotics, lifted its hand in a wave as CEO Peggy Johnson addressed the audience.

Johnson clarified to Fortune tech reporter Jason Del Rey why Digit's knees are positioned like bird legs, noting that this design enables the robot to efficiently handle tasks in large warehouses by minimizing interference when picking up and placing objects, Caliber.Az reports citing the foreign media.

Digit, after a decade in development with its unique backward-knees design, has secured its inaugural job: handling tote picking duties at a Spanx facility in Connecticut, transferring them onto conveyors. This marks the beginning of a multi-year partnership with logistics provider GXO Logistics, generating monthly revenue for Agility Robotics through their robot-as-a-service initiative, according to CEO Peggy Johnson.

Johnson, who assumed the CEO role just four months ago, highlighted the significant demand for warehouse jobs in the US, with approximately 1.1 million positions currently unfilled that involve repetitive and mundane tasks like those performed by Digit. "Nobody wants these jobs," she emphasized, noting that the repetitive lifting of heavy objects often leads to injuries and high turnover rates among workers. "That's where the injuries come in. That's where the turnover comes in," she explained.

She also pointed out that former physical laborers in warehouses are transitioning into roles as robot managers. "They need to be upskilled," Johnson added, underscoring the shift towards managing and overseeing automated systems like Digit.

Agility Robotics, originating from Oregon State University research, secured $150 million in Series C funding in April 2024 to expand its deployment of Digit in logistics and warehouse settings. With Digit now actively operating in warehouse environments, CEO Peggy Johnson revealed plans for the next generation of Digit robots to launch in the fall. Supported by a newly established factory in Salem, Oregon, the company aims to release hundreds of Digit units initially, scaling up to thousands in the following year, with a long-term goal of reaching 10,000 to meet rising demand.

However, Johnson stressed that it's not just about the robots' physical capabilities, including their distinctive backward knees. More importantly, she emphasized the integration of Digit into existing corporate IT infrastructures to seamlessly enhance operational workflows. "We need to integrate with corporate IT infrastructure and adapt to their needs," she explained.

Agility Robotics recently confirmed a "small number" of layoffs as part of its efforts to optimize operations while scaling up production of Digit robots. CEO Peggy Johnson mentioned ongoing capital raising efforts for future funding rounds. However, she emphasized the current focus on determining the optimal deployment sectors for the existing Digit robots. Johnson noted significant interest from automotive and retail grocers and is evaluating the best strategic direction moving forward.