In 1985, when Peggy Johnson first began his career as an engineer, personal computers were just starting to enter households, the World Wide Web had not yet been invented, and humanoid robots were largely still a part of science fiction works.
Forty years later, at the age of 65, Johnson took America's first humanoid robotics company public.
On Thursday, Johnson facilitated the listing of Agility Robotics, which is headquartered in Oregon, through a merger with a special purpose acquisition company, raising approximately $465 million. This funding will help Agility expand the production and deployment of its two-legged robot Digit. Digit is a robot designed to perform tasks in warehouses and factories. Affected by market fluctuations after the mid-term elections, Agility's stock, which trades under the code AGLT, closed at $9.90 on Friday, a decrease of nearly 14% from Thursday's closing price.
For Johnson, this listing marks an important milestone in her career. Her professional path has taken her from Qualcomm all the way to a senior position at Microsoft, where she once served as the chief transaction facilitator for CEO Satya Nadella. Later on, she took charge of the augmented reality startup Magic Leap.
Today, she is facing the most daunting challenge to date: turning humanoid robots into a profitable business.
Johnson to Business Insider says: "I really enjoy taking early-stage technologies to the commercialization stage."
Despite billions of dollars flowing into the field of humanoid robots, experts and investors still disagree on whether robots must resemble humans, and this technology has not yet proven itself in large-scale applications. According to regulatory documents, Agility had revenue of only $1.8 million last year and a net loss of $138.1 million.
However, Agility still has a first-mover advantage among its competitors. Its robots are already in operation at nine customer facilities, including Amazon, Toyota, and the logistics company GXO. The company disclosed that an order for 1,000 robots from a single customer with financial ties to the company amounted to over $300 million.
But competition is intensifying. Competitors, including Figure AI and Apptronik, have attracted substantial investment and are testing their robots with customers. Figure AI was recently valued at $39 billion, while Apptronik is valued at around $5.5 billion. Elon Musk has bet the future of Tesla on Optimus, and Tesla has already begun producing this robot at its Fremont factory.
Johnson believes that the experience accumulated by Agility in actually putting robots into use will give the company an advantage.
She said, "This is indeed a real-world business problem, and we can meet the companies' needs for automation."
From transaction matchmakers to CEO
Johnson grew up in a crowded home in Los Angeles, with the house filled with double beds. Her father passed away when she was young, and she grew up in a stepfamily consisting of 15 children. The parents encouraged their children to go to college, but they required them to bear the tuition costs themselves.
Johnson completed her studies at San Diego State University by doing odd jobs and earned a degree in electrical engineering. She initially started her career at the industrial giant General Electric, and then joined Qualcomm in 1989, which was still in its infancy as a wireless technology company. Johnson considers herself introverted, and at first, she found it very difficult to establish herself in the male-dominated field of engineering. She said, "It was indeed challenging for me to get my voice heard."
But she gradually gained a firm footing, advancing through positions in engineering, sales, and business expansion, and 24 years later, she became the Vice President of Global Market Development. During that time, she led the department that launched BREW. BREW is an early mobile application platform that facilitated app sales in excess of one billion dollars.
A former colleague told Business Insider that Johnson is known for his passion for running and his relentless ability to facilitate transactions, and he has a wide network of contacts within the wireless industry. A former CEO Paul Jacobs from Qualcomm specifically mentioned two transactions, believing they laid the foundation for Johnson's reputation: one was an agreement regarding walkie-talkie-style mobile phone technology reached with Nextel in 2002; the other was the sale of wireless spectrum to AT &T for $1.925 billion in 2010.
Jacobs said, "It is precisely these two transactions that have brought Peggy's reputation to shine."
The reputation of Johnson eventually caught the attention of Satya Nadella, who had just taken over as CEO at Microsoft. In 2014, Nadella recruited her to be in charge of Microsoft's business expansion efforts. During her six years at Microsoft, she helped facilitate the company's $26.2 billion acquisition of LinkedIn and established Microsoft's venture capital department, M12, in order to build closer ties with emerging startups in Silicon Valley.
Nagraj Kashyap, who has worked under Johnson at both Qualcomm and Microsoft, recalls that this boss gives employees a great deal of freedom. He said, "She gave me enough space to work in the way I deemed appropriate. Her motto is to recruit outstanding people and then let them grow and execute."
But Johnson has always wanted to run a company on her own. She said, “I kept thinking to myself that I just need to gain a little more experience here, and then a bit more there.” When the pandemic came, she decided to take this step.
In 2020, Johnson took on the role of CEO at Magic Leap. This augmented reality startup has always struggled to transform cutting-edge technology into viable business models. Johnson continued to drive the company's transformation towards corporate clients and oversaw the launch of a new headset.
However, as the hype around the metaverse subsides, Agility has come into play. Agility was founded in 2015 and was initially a spin-off startup from Oregon State University, spending nearly a decade developing robots. Johnson believes that this technology is now ready for commercialization.
She said to Business Insider, "What I saw is a robot that can truly get the job done and bring value to real customers."
The big exam of Johnson
Two years after joining the company, Johnson now has to convince public market investors that the technology of Agility can generate returns.
The regulatory documents for Agility highlight the challenges ahead. The company estimates that the initial material cost for its new Digit 5 robot alone is as high as $150,000, but if the annual production reaches 1,000 units, this figure will drop to $75,000; if it reaches 10,000 units, it will further decrease to $30,000. The company's financial model also assumes a robot lifespan of five years and that costs can be recouped in about 18 months under the robot-as-a-service model – all these projections depend on Agility significantly expanding production and reducing costs.
The robot analyst Michelle Sun who writes for the Substack column Core Matter previously stated about Business Insider: "There are many challenges in addressing unit economics."
The current focus is on making Digit more useful to industrial customers by expanding the range of tasks it can perform. Agility recently opened a 60,000-square-foot engineering facility in Fremont, California, for teaching robots new skills. The company states that it has accumulated 65,000 hours of commercial operation data, and each new deployment provides information that helps to improve the technology.
Although Johnson imagines that humanoid robots will eventually enter people's homes, she expects that this will not happen within the next five years.
At present, she bets that the shortage of labor will drive demand for factories and warehouses. She mentioned that a study by Deloitte estimates that by 2033, there could be 1.9 million vacant positions in the US manufacturing sector. Johnson said that Agility currently has 30 qualified potential clients in the pipeline.
She said, "They can't find the right people. This is definitely a matter of life and death for these companies, and we can help solve that problem."
