Daedalus Secures $21M Investment to Build AI-Powered Precision-Manufacturing Factories

A fledgling startup founded by one of OpenAI’s first engineering hires is aiming to “reshape manufacturing,” with AI-powered factories for creating customized precision parts.

Named Daedalus, the company is based in the southwest German city of Karlsruhe, where its solo factory is presently located. Here, Daedalus receives requests from sectors such as medical devices, aerospace, defense, and semiconductors, each necessitating unique components for their goods. For instance, a pharmaceutical company might need a personalized metal housing for a valve utilized in the production of a certain medicine.

As it looks to intensify operations with the intention of establishing additional factories in its local marketplace, Daedalus disclosed today it has secured $21 million in a Series A round of financing led by Nokia-funded NGP Capital, with participation from existing backers Khosla Ventures and Addition.

This takes Daedalus’s total funding past the $40 million threshold, with other notable investors including Y Combinator (YC) which became involved after Daedalus took part in YC’s Winter 2020 program.



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The Daedalus factory floor

The Daedalus factory floor Image Credits: Daedalus

Split fabrication

The manufacturing industry — especially in the context of precision component fabrication — is extremely dispersed by almost every evaluation. While it’s attractive to envision that a common manufacturing setup in 2024 is something similar to that of a large automotive assembly plant, this only holds true where high-volume products (like cars) are involved — the actuality is quite distinct when it comes down to precision parts utilized in industrial machinery.

A firm that has been designing industry-specific valves for decades likely won’t be manufacturing everything itself internally. It will generally depend on an old-school network of producers which may entail collaborating with a small company consisting of a single expert “craftsman” and a few assistants working from a small facility.

“What this implies is they’re not doing much in terms of digitalization, and it’s hard to change that because they’re just used to working with pen and paper, essentially,” Daedalus founder and CEO Jonas Schneider told TechCrunch. “So you have these very low-tech producers supplying the most crucial components for these extremely premium products.”



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Daedalus founder & CEO Jonas Schneider

Daedalus founder & CEO Jonas Schneider Image Credits: Daedalus

Formed in 2019, Daedalus uses similar ready-made hardware available to any producer, but its unique ingredient lies in the software it deploys on top to govern and improve the “shop floor” — in other words, it automates many of the manual tasks involved in producing a specific part. So a client will forward their CAD (computer aided design) drawings as usual, and Daedalus transforms these drawings to a finished part with automation seeping into the process.

“It’s about directing all of the workflows across the production, planning and scheduling of those running around on the factory floor doing the work,” Schneider explained.

When production kicks off for a new “part” in a machine, there are often dozens of steps and hundreds of decisions involved that influence what tooling will be necessary, what settings to use to create the precise shape and dimensions of the part, and so on. And this is where Daedalus comes into the picture — its software captures the manufacturing decisions data of one “part,” and uses that to guide the decisions around how a similar part is created in the future. So a slightly larger valve, or a valve with an additional fitting, might be fundamentally the same as an earlier part, and thus Daedalus uses pattern matching to apply that previous knowledge to configure its machines for the new part.

In numerous ways, Daedalus extends the fundamental concept of 3D printing, which has been making the manufacturing process more accessible for over a decade. But with machine learning intelligence under the hood, it’s taking things to the next level — it’s like 3D printing on steroids.

“The comparison is very apt — as an outsider to this industry in the beginning, to me it seemed like custom manufacturing had [already] been solved with 3D printing. But it mostly comes down to technical limitations of the process,” Schneider said. “With 3D printing, it still means that you need to design a new part specifically so that it can be 3D-printed, and that actually ends up being quite an expensive process. But for the vast majority of the industrial base, it’s not really feasible, and they can’t do 3D printing because it’s not precise enough, or the materials are not strong enough.

You can frame what what we’re doing, in a sense, as taking this idea from 3D printing and applying it to industrial grade, high-end parts.”

The narrative so far

Prior to Daedalus, Schneider was technical lead at OpenAI where he played a key role in launching the company’s robotics division in 2016. Although OpenAI may be better recognized today for its flagship ChatGPT AI chatbot, the company also ran a robotics department that conducted research into things like solving a Rubik’s Cube with a robotic hand, a project that Schneider was directly involved in.



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OpenAI's Rubik's Cube hand

OpenAI’s Rubik’s Cube hand Image Credits: OpenAI

OpenAI ultimately disbanded this team in 2021, but Schneider had spearheaded the software engineering aspect of operations for over three years before he left to start Daedalus in 2019.

While there were various reasons why Schneider ended up leaving to form his own startup, there was one experience he encountered building the Rubik Cube hand which played a bit part in his decision to launch Daedalus.

“At one point, the robot hand broke down and we had to get spare parts,” Schneider said. “And guess what? They needed to be precision manufactured. So there were these machines just like ours today, but we had to wait months to get these parts. And I thought, why is it so hard to get spare parts here? All of this contributed to me looking at this whole manufacturing space a bit more.”

For now, Daedalus has a single 50,000 square-foot factory factory in Karlsruhe from where it largely targets the German-speaking markets including Austria and Switzerland. In the near term, the plan is to expand to a second factory in Germany,

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