Sanctuary AI is targeting US$175 million in new capital by selling its majority stake in a hardware supplier and securing two prominent U.S. venture capital firms as co-lead investors in a new fundraising round, The Logic has learned.

The Vancouver-based startup has found buyers for its US$125-million stake in Apptronik, according to an April 1 email Sanctuary’s chief executive James Wells sent to shareholders, a copy of which The Logic obtained.

In 2022, Sanctuary took a US$10-million stake in the Texas-based company which, like Sanctuary, makes humanoid robots. In February, Apptronik announced it had raised a US$350-million financing round that included participation from Google and a partnership with DeepMind, Alphabet’s AI research arm. According to Wells’ letter, Apptronik had a US$1.4-billion pre-money valuation, making Sanctuary’s stake worth over 12 times its initial value.

Sanctuary has found buyers for the entire stake, Wells’ letter said. “This provides a large amount of non-dilutive financing which will help fund the company’s strategy for several years,” it said.

Reached via email on Thursday, Wells declined to comment.

Sanctuary is also working to raise another US$50 million in venture financing, Wells’ letter said. New Enterprise Associates and Kleiner Perkins are contributing US$10 million as co-lead investors in the round, which the letter described as a Series B-2. The company has targeted the end of May to close the round, and has set a minimum target of US$30 million.

Alongside the US$50-million round, Sanctuary will acquire San Francisco robotics firm Rapid Robotics. Wells’s letter said the firm—which was valued at US$193.7 million in August 2021 when it raised a $36.7-million Series B, according to PitchBook data—had “significant product development, customer deployment and system integration experience.” The acquisition will strengthen Sanctuary’s senior management team and give it more of a presence in the U.S., Wells’s letter said.

Rapid Robotics is also backed by New Enterprise Associates and Kleiner Perkins, as well as by international investment giant Tiger Global.

Since it was founded in 2018, privately held Sanctuary has raised around $140 million from backers including Magna International and BCE. Some investors have had concerns about its ability to raise enough capital to compete with bigger, better-funded robotics startups worldwide. They include Figure AI, Norway’s 1X and Elon Musk’s humanoid robotics endeavour through Tesla. Silicon Valley’s Figure AI is in talks for a US$1.5-billion round, which would value the firm at US$39.5 billion, according to a Bloomberg report in February.

China’s Ministry of Industry and Information Technology wants to develop a dominant humanoid robot supply chain by 2027, bolstered by government subsidies, according to a report from the U.S.-China Economic and Security Review Commission in 2024. 

In January, Sanctuary’s chief financial officer Philip Smith told shareholders the company was raising a US$10-million two-year convertible note offering, and that it hoped to close the round by February. 

The company’s board ousted chief executive and co-founder Geordie Rose last November, and laid off around 30 employees at the same time.