Scaling a robotics start up is difficult in the best of times—Deus Robotics is doing it while dodging missiles.
Deus Robotics designs, manufactures and integrates autonomous mobile robots for the warehouse logistics sector. Launching in 2018, the company based in Kyiv, Ukraine, now employs 25 people and is attempting to scale up from a regional firm to one that supplies robots throughout Europe and North America. Deus was well into this process when Russia’s full-scale invasion of Ukraine brought its economy crashing to a halt. A year after the start of the war, battles rage in eastern Ukraine while those in the capital Kyiv and regions to the west are working to get the country and its economy back on track.
Pavlo Pikulin, Deus Robotics founder and CEO, spoke with Engineering.com about what this process was like, how the company managed to operate during a full-scale invasion and what the future holds. His responses are edited for clarity.
Eng.com: What was Deus Robotics up to in the time leading up to the war?
Pavlo Pikulin (PP):
The company had engaged in negotiations with a dozen of the biggest players in the market, and we secured an investment from BGV Trident Capital. However, the funding was put on hold after Russia invaded Ukraine on February 24, 2022, leaving the company in limbo. (Deus has since secured a new round of funding worth US$1.5 million from SMRK VC, a Ukrainian venture fund)
As the region became increasingly unstable, Deus’ top priority was survival. The team had to quickly evacuate Kyiv and focus on searching for alternative investors to fill the void left by the withdrawn funding.
Eng.com: On February 25, 2022, the day after the invasion, what did you do? Did you discuss closing or try to figure out how to operate?
PP: We weren’t quite prepared for the war. One or two days before the invasion, I was saying, “There will be no war in Kyiv, it’s senseless.”
It turned out I was wrong, and we had to quickly organize the evacuation. On the first day of the war, we didn’t think about business at all, all thoughts were about ensuring the safety of colleagues, family and friends. On the second day we turned back to saving the company.
Employees were offered help to relocate with their families and await further decisions. The question of closing the company was not discussed, as the company had obligations to partners and employees, and we were looking for a way to survive.
Without the company Nova Poshta, evacuation would have been almost impossible, as all trucks were already occupied. (Nova Poshta is a private Ukrainian postal and courier company that provides logistics and related services for individuals and businesses. It’s like the Ukrainian FedEx and is an important customer, investor and partner in Deus Robotics.)
Nova Poshta provided us with free trucks and drivers for the evacuation. It was unclear where exactly the Russian military was located, so the move was risky. However, we still decided to move, choosing a date when a site in Mukachevo— a city in Ukraine’s far west regions, bordering Hungary—was available for testing a project we were working on in Bila Tserkva, near Kyiv. Accommodation was a scamble, so employees settled in different cities in western Ukraine—some had to travel to the office for three hours by car.
Eng.com: Can you compare the supply chain disruption before and during war:
PP: Prior to the outbreak of war, we had set our sights on conquering the Ukrainian market and were already a known entity among the major players in the logistics industry. Our primary focus has been on streamlining sorting tasks and addressing employee retention challenges in retail, construction, supermarkets, mail operators and fulfillment centers. We knew we could pave the way for expansion into untapped markets overseas.
However, the onset of war proved to be a significant setback for Ukraine’s logistics supply chains. Early on, key transportation routes were severed and logistics operators were forced to scramble for alternative delivery options. In fact, several of our potential clients whom we had been in negotiations with before the conflict suffered rocket attacks, with one company even losing their entire warehouse.
To make matters worse, a fuel crisis quickly followed and damage to critical infrastructure resulted in widespread power outages. One of the first post-invasion tasks for engineers at Deus Robotics was to upgrade our robots to ensure they keep a charge level of over 40 percent. This optimized autonomous work time, even when there was a power outage at the warehouse. Nova Poshta operates about 40 Deus robots for parcel sorting and rack transportation.
Eng.com: Designing, engineering and manufacturing robots is hard in normal circumstances. How did war complicate your efforts?
PP: In the early days of the full-scale war, the roads leading out of the capital were overloaded with Kyiv residents, while the sound of rockets and anti-aircraft fire regularly pierced the air. Everyone was in a state of psychological shock. But despite this, we found the strength to evacuate and continue our work.
In March, millions of Ukrainians temporarily relocated to the west, and there was a severe shortage of available housing. Our partner, Nova Poshta, provided us with a temporary office in Mukachevo, but we were unable to house all of our employees there.
After the evacuation, the team needed time to adjust to the new location, as everyone had to rapidly change their lives and move to a new city with minimal belongings. Almost all of our contractors were near Kyiv, so we had to find new ones in western Ukraine. Then a transportation crisis hit, making it nearly impossible to refuel vehicles in Ukraine. This created additional problems for those who lived far from the temporary workplace.
Deus Robots returned to Kyiv in May after the Russian army abandoned its offensive near the capital. Despite the ongoing war, we finalized the software and completed the Nova Poshta integration in Bila Tserkva, a suburb of Kyiv. It increased the peak speed of parcel processing by 200 percent compared to manual warehouse operations. But the external forces continued, with rocket attacks targeting critical infrastructure, work in cold buildings without electricity, and constant internet outages. During alarms, public transportation would shut down, and people were unable to reach the office. There were situations when alarms sounded in the middle of the workday, and work had to be continued at a later, safer time.
The supply chain logistics were disrupted, and business processes significantly slowed down. However, we adapted and established new mechanisms for procuring parts. Unfortunately, the delivery of parts from other countries has become 20 percent more expensive and delivery times have doubled. Nevertheless, the situation is gradually returning to normal.
Eng.com: What have you learned about robotics and running a business in the last year?
PP: We have learned how important robots are during natural disasters or wars. Robots continue to work even if people need to evacuate. We have also developed solutions that have allowed us to improve robots so that they can work under conditions of interrupted communication or temporary power outages.
Also, much can be learned from our partners. Nova Poshta serves as not only a model for the quality of business processes, but also an example for how a company can make a positive impact on people’s lives. In the face of power outages, life-threatening risks and fuel shortages, Nova Poshta continues to deliver goods to its customers, displaying an unmatched level of corporate social responsibility. Nova Poshta has emerged as the central logistics hub for Ukraine, providing critical support to volunteer organizations, the Ukrainian army, and infrastructure workers by supplying ammunition, medicines and technical equipment.
Eng.com: Looking ahead, what are your plans?
PP: We plan to continue collaborating with Ukrainian logistics companies. We remain hopeful that affected companies will recover, and that our robotics solutions can help solve their challenges. Our aim is to help the Ukrainian logistics market become more efficient and technologically advanced. In addition, expanding into the U.S. and European markets is a top priority for us. We intend to open sales and support offices for our clients in both regions. Marketing and service are key priorities in these new markets, and we are committed to investing in them.
(Editor’s note: This story was edited on March 15, 2023 to correct the name of the venture capital firm Deus was working with before the war began from SMRK VC to BGV Trident Capital.)