Peggy Johnson took the robots to Wall Street. Can they make a profit?

When Peggy Johnson began her engineering career in 1985, personal computers were just beginning to make their way into homes, the World Wide Web had not yet been invented, and humanoid robots were largely science fiction.

Four decades later, Johnson, 65, took the first humanoid robotics company in the United States public.

On Thursday, Johnson took Oregon-based Agility Robotics public through a merger with a specialty acquisition company that raised about $465 million. This money will help Agility accelerate the production and deployment of Digit, its two-legged robot designed to perform tasks in warehouses and factories. Amid market volatility following the midterm elections, Agility shares, trading under the symbol AGLT, closed Friday at $9.90, down nearly 14% from their Thursday close.

For Johnson, the listing marks a major milestone in a career that has taken her from Qualcomm to the upper echelons of Microsoft, where she served as CEO Satya Nadella’s chief dealmaker, and then to head of augmented reality startup Magic Leap.

Now she’s tasked with tackling the most daunting challenge she’s ever faced: turning humanoid robots into a profitable business.

“I like to take early-stage technologies and bring them all the way to commercialization,” Johnson told Business Insider.

Despite the billions invested in humanoid robotics, experts And investors remain divided over whether robots should look like humans, and the technology has yet to be proven on a large scale. Agility generated just $1.8 million in revenue last year while posting a net loss of $138.1 million, according to regulatory filings.

The Agility nevertheless has a head start on its competitors. Its robots operate at nine customer sites, including those of Amazon, Toyota and logistics company GXO. The company disclosed orders worth more than $300 million for 1,000 robots from a single customer with financial ties to the company.

But competition is intensifying. Competitors such as Figure AI, recently valued at $39 billion, and Apptronik, valued at around $5.5 billion, have attracted significant investor support and are testing their robots with customers. Elon Musk has staked Tesla’s future on Optimus, which Tesla has started producing at its Fremont factory.

Johnson is betting that Agility’s experience implementing robots will give it an advantage.

“This is a real business problem right now, and we can address this need for business automation,” she said.

From negotiator to CEO

Johnson grew up in a crowded Los Angeles house filled with bunk beds. Her father died when she was young and she grew up in a blended family of 15 children. Their parents encouraged them to attend college but expected them to pay their own way.

Johnson worked odd jobs so he could attend San Diego State University and earned a degree in electrical engineering. After beginning her career at industrial giant General Electric, she joined Qualcomm, then a young wireless technology company, in 1989. A self-described introvert, Johnson initially found working in the male-dominated world of engineering difficult. “I struggled to make my voice heard,” she said.

But she found her niche, rising through the ranks of engineering, sales and business development over 24 years to become executive vice president of global market development. Along the way, she led the division that launched BREW, an early mobile app platform that helped sell over $1 billion in apps.

Former colleagues told Business Insider that Johnson was known as an avid runner and a tough negotiator who had relationships in the wireless industry. Paul Jacobs, former CEO of Qualcomm, highlighted two deals that cemented his reputation: a 2002 deal with Nextel for walkie-talkie-style mobile phone technology and a $1.925 billion sale of wireless spectrum to AT&T in 2010.

“Those two deals made Peggy’s star shine,” Jacobs said.

Johnson’s reputation eventually caught the attention of Satya Nadella, who had just taken over as CEO of Microsoft. In 2014, he recruited her to lead the company’s business development efforts. During her six years there, she helped shepherd Microsoft’s $26.2 billion acquisition of LinkedIn and launched M12, its venture capital arm, to forge closer ties with emerging Silicon Valley startups.

Nagraj Kashyap, who worked under Johnson at Qualcomm and Microsoft, recalled a boss who gave his employees considerable freedom. “She gave me air cover to allow me to do my job the way I wanted,” he said. “His motto was to hire good people, then let them thrive and execute.”

But Johnson had long wanted to run a business herself. “I kept thinking: I just need a little more experience here, a little more experience there,” she said. When the pandemic arrived, she decided to take the plunge.

In 2020, Johnson became CEO of Magic Leap, the augmented reality startup that was struggling to turn its futuristic technology into a viable business. Johnson continued the company’s pivot toward professional customers and oversaw the launch of a new headset.

But as enthusiasm for the Metaverse waned, Agility came knocking. Founded in 2015 as a spinout from Oregon State University, the startup has spent nearly a decade developing robots. Johnson saw the technology ready for commercialization.

“I saw a working robot that could actually do real work and provide value to a real customer,” Johnson told Business Insider.

Johnson’s big test

After two years of service, Johnson now must convince public market investors that Agility’s technology can generate a return on their investment.

Agility’s regulatory filings highlight the challenge ahead. The company estimates its new Digit 5 ​​robot will initially cost $150,000 in materials alone, but expects that figure to drop to $75,000 for an annual production rate of 1,000 robots and $30,000 for 10,000 robots. Its financial model also assumes that the robots will last five years and recoup their costs in about 18 months under a robot-as-a-service model – projections that rely on agility significantly increasing production and reducing costs.

“There are a lot of challenges when it comes to solving the economics of a unit,” Michelle Sun, a robotics analyst who writes Substack Core Matter, previously told Business Insider.

Johnson’s immediate goal is to make Digit more useful to industrial customers by expanding the range of tasks it can perform. Agility recently opened a 60,000-square-foot engineering center in Fremont, California, to teach its robots new skills. The company claims to have accumulated 65,000 hours of business operations data, with each new deployment providing insights to improve its technology.

Although Johnson envisions humanoids eventually entering homes, she doesn’t expect that to happen in the next five years.

For now, she’s betting the labor shortage will spur demand in factories and warehouses. She cites a Deloitte study that estimates 1.9 million U.S. manufacturing jobs could remain unfilled by 2033. Agility has 30 qualified potential clients in its portfolio, she said.

“They can’t find anyone,” Johnson said. “It’s definitely existential for these companies and we can help solve the problem.”

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