OTTAWA — Boisbriand, Que.-based robotics company Kinova is gearing up for a major expansion, with plans for a new facility and products designed to help smaller and Canadian firms automate their manufacturing lines, machine shops and warehouses. The firm has secured $20 million in financing from the federal government’s flagship innovation fund as part of its ongoing fundraising for the project, which CEO Charles Deguire says will “democratize access [to] robotics.”

Founded in the Montreal suburb in 2006, Kinova makes robotic arms used in surgical suites, research labs and classrooms, as well as by people with disabilities. It currently makes 90 per cent of its revenue in export markets, according to Deguire, who declined to share exact figures from the privately held company’s books. But the company’s expansion plan focuses on the domestic market, and industrial settings.

“We realized in recent years that labour shortages [were] affecting our neighbors and us, as manufacturers based in Canada,” said Deguire. “If we are to remain competitive, Canada needs to catch [up] on adopting automation.” 

The country’s stock of industrial robots has grown steadily during Kinova’s corporate lifespan, growing from $608 million in 2006 to just over $1.06 billion in 2017, led by manufacturing subsectors like machinery and electronics, according to a recent Statistics Canada study. But business investment in machinery and equipment and IP products has been flat or flagging for much of that time, and productivity growth lags the U.S. and other OECD countries.

In an October 2018 report, the Deguire-chaired advanced-manufacturing economic strategy table—one of six sector-specific committees then-innovation minister Navdeep Bains set up to advise him—called for Ottawa to support and incent small manufacturers to adopt technologies like automation, machine learning and data-driven systems. That experience was “really eye-opening of the challenge we had nationally,” said Deguire. 

Kinova’s first new product is a collaborative robot, or “cobot,” designed to operate in close proximity to human workers in places like warehouses or plants’ machining or welding stations, with a hardware price tag of $30,000 to $50,000 per unit. Deguire said integration and deployment can raise that price as much as fourfold, an expense it plans to reduce by supplying its own software. It will also offer visual programming tools and ongoing support to allow companies whose workers have “no pre-existing knowledge on robotics” to operate them.    

The firm is already conducting a cobot pilot project, and plans a public release next year. Other applications for its planned new machines include professional services like waste management.

Kinova’s next-generation robot project will cost the company “way over $100 million,” according to Deguire. The company has closed a round of private capital to fund the project, and is currently raising another, said Deguire, who declined to disclose the amounts raised or the investors. Fonds Manufacturier Québécois led the company’s last announced financing of $25 million in September 2017, which also included investment from BDC Capital, Taiwanese contract-manufacturing giant Foxconn and South Korean VC firm KTB Network.

In November 2020, Kinova also signed a contribution agreement with the federal government for $20 million in funding from the Strategic Innovation Fund (SIF). The $13.9-billion program provides financing to help domestic firms scale and conduct R&D, and to incent large foreign firms to invest here.

Last year, Kinova recruited a former senior government official to its team, adding David McFarlane, who worked for Bains between March 2016 and March 2020, primarily as director of policy. McFarlane joined the firm as a senior advisor to the CEO in April 2020, according to his LinkedIn profile. Deguire said McFarlane was brought on as a business-development consultant to help on large international accounts and R&D contracts, and “wasn’t involved at all with the SIF.”

McFarlane said he received clearance from the Office of the Conflict of Interest and Ethics Commissioner to take the role at Kinova.

Kinova submitted its initial application for the program in October 2018, said Hans Parmar, spokesperson for Innovation, Science and Economic Development Canada (ISED). The department provided The Logic a copy of a July 2020 email from Bains’s then-chief of staff Ryan Dunn to ISED deputy minister Simon Kennedy confirming that the minister had asked to delegate all Kinova-related SIF decisions to the department. ISED also commissioned an additional independent review of the project before authorizing it, said spokesperson Yara El Helou.

Neither Kinova nor the federal government has yet announced the award. Kinova is the only one of the 92 companies and organizations backed by SIF that hasn’t been the subject of a ministerial event or news release, and isn’t listed on the program website. The funding is disclosed on the federal government’s grants and contribution database.

Kinova currently has 200 employees in Canada and 10 in Germany, and plans to more than double its headcount by 2025. Deguire said its doubled production capacity over the last two years by automating and modernizing its existing manufacturing facility. A new robot factory, part of the SIF agreement, will triple it again in the next two and a half years.

Other countries like Germany, South Korea and Japan, which also have historically strong manufacturing industries, surpass Canada in robot adoption, Deguire noted. “But you also have large manufacturers of robots in those hubs that can educate, influence and share risk with their peers in the local industries,” he said.

A similar complex of firms is growing here, around firms like Kinova, Kitchener, Ont.-based Clearpath Robotics, Robotiq in Lévis, Que., and Montreal-headquartered Vention, according to Deguire. “You have a base for a very competitive ecosystem in industrial automation that is suited for SMEs and the type of manufacturers in Canada.”