The Partnership Between Sarcos Robotics and VideoRay Indicates a New Trajectory Underwater ROVs; Proof Is in the Persistence of Innovation

In May 2023, Sarcos Robotics partnered with VideoRay to develop an advanced Underwater Remote Operated Vehicles (ROV), having combined VideoRay’s underwater robotics systems with Sarcos’ underwater robotic arm. This collaboration follows a partnership between Sarcos Robotics and Jabil, enabling increased production capacity for Sarcos as they tap into Jabil’s resources to produce sub-systems for the Guardian XT dexterous robotic system, the Guardian XM intelligent robotic system, and may also include the Guardian Sea Class Robotic System. This partnership with VideoRay, however, focuses primarily on the Guardian Sea Class Robotic System. Sarcos and VideoRay will each be able to sell an integrated ROV system and their respective individual products, in addition to the replacement parts and repair services.

In the first quarter of 2023, Sarcos Robotics recorded a US$0.7 million increase in revenues up from first quarter 2022, totaling a revenue of US$2.3 million. Crucially, this revenue increase was attributed to the rise in product development revenue and was a result of a spike in research and development expenses. Specifically, Research and Development (R&D) expenses increased to US$9.4 million in first quarter 2023, up from US$5.9 million in first quarter 2022. Sarcos Robotics pumped a significant amount of money into R&D, given their newly increased headcount following the acquisition of RE2 in 2022, as well as increased direct materials charges. The acquisition of RE2 led to the expansion of Sarcos’ robotic portfolio to include Underwater and Medical ROVs.

Considering that Sarcos Robotics produces the robotic manipulation arms required for ROVs as opposed to the ROV itself, the company’s interest in the Underwater ROV market is a unique way to expand their profile. Under the partnership agreement terms, VideoRay will provide its Underwater Robotic Systems while Sarcos will contribute their robot manipulation arm. The ROV will form the Guardian Sea Class and be marketed as one of Sarcos’ lighter Class II hybrid ROVs that holds both observation and light work capabilities. At 75 kg, it weighs significantly less than other ROVs under Sarcos’ product line, which range between 1000 to 3000 kg. As an underwater ROV, the Guardian Sea Class is covered with yellow foam for buoyancy and has a payload range of 20 to 40 kg. It has demonstrated a working depth of 1000 meters, intuitive teleoperation capabilities, and can be configured based on the use-case to have single- or dual-arm configurations. It can be used in a variety of applications, including naval Explosive Ordnance Disposal (EOD) and mine neutralization, offshore inspection and maintenance, underwater welding for construction, and renewable energy inspection and maintenance. The Guardian Sea Class requires human operation and is attached to a tether, which may potentially present inconveniences with managing the ROV due to ocean currents and weight in the water.

From an economical perspective, the Guardian Sea Class offers light work capabilities for lower solution costs. This is the result of reduced support personnel and equipment. Sarcos Robotics’ go-to-market strategy is also an accelerated one, as seen by their recent partnerships with ROV operators and considering that they have an existing underwater robotic manipulation arm. Alongside this, the Guardian Sea Class presents itself in between heavy duty and lightweight ROVs out on the market presently, in addition to having dual capabilities for observation and mild investigation and intervention. The versatility of this ROV suggests that it can be flexibility configured to fit the use-case. Overall, the introduction of a new robotic manipulation arm player in the market will surely shake up the market.

The Underwater ROV market is a rather unique one. While not yet as significant as the outdoor field ROV markets, ABI Research anticipates a market value of US$ 2.04 billion by 2030 (MD-MOROBO-101). The market potential is likely to be driven by the efficacy of deploying underwater ROVs over human divers (particularly in unchartered territories of the ocean), the rise of more sustainable robotic systems in the ROV market, and the lower Total Costs of Ownerships (TCOs). Crucially, Sarcos Robotics has identified the Underwater ROV as one with exciting business potential. At the same time, it also appears that there are several existing Underwater ROV companies in the process of upgrading their ROV fleet to have both observation and light work capabilities (Class II, B ROVs). For instance, Nauticus Robotics launched a new aquanaut ROVs as of April 2023 which can function without the presence of humans and is fully electric (meaning greener energy). The aquanaut can also function without a tether and has a payload of 90 kg, making it more efficient and cost effective for end users. For Sarcos Robotics to thrive in what seems like a market that already has an established number of players, they will have to be attentive to what they are able to offer the market.  

Thus, the success of Sarcos Robotics in the Underwater ROV market will be heavily dependent on the company’s ability to drive more innovation in their research and development processes, aside from enhancing their production capacity. Together, these factors help to beef up Sarcos Robotics’ profile in the Underwater ROV market as a reliable provider of robot manipulation arms. The partnership with VideoRay is a great starting point to achieve this. With VideoRay’s annual revenue of US$30 million as of fourth quarter 2022 and its strong position in the market presently, perhaps Sarcos can consider forming more partnerships with other ROV system operators to boost the company profile. Another way that Sarcos can set itself apart from other competitors in the Underwater ROV market may be working towards either improving the hardware of the Guardian Sea Class robotic arm to operate without a tether and the need for human operations, or to function on wireless communications without having to tradeoff a shorter battery life.

In the future, like other robotic systems, Underwater ROVs innovations will also advance towards more sustainable and green robotic systems. The quicker Sarcos can keep up with these trends, the easier it will be for Sarcos to distinguish themselves in the market.