Bain Capital’s Ajay Agarwal bet on robots when Silicon Valley wouldn’t. Now he sees a ‘golden era’ for physical AI

Bain Capital Ventures' Ajay Agarwal identified an early opportunity in robotics, backing a startup that SV investors dismissed. Kiva Systems, later acquired by Amazon, revolutionized warehouse logistics by employing robots to bring shelves to workers. Agarwal's initial skepticism waned after meeting Kiva's cofounder Mick Mountz, who presented a compelling case for robot-driven warehouses.

Bain's investment yielded a remarkable 26.6-fold return. Today, Agarwal anticipates a "golden era" for physical AI, an expanding field enabling robots to perceive and act in the real world. This optimism stems from a surge in hardware and physical AI funding, with 2025 witnessing $27.6 billion in investments across 1,009 deals. TerraFirma, a construction robotics startup backed by Bain in 2024, is one such example.

Agarwal attributes this momentum to the availability of cheaper components, increased competition, and advancements in AI. These factors have transformed hardware costs and improved machines' ability to handle real-world scenarios. While the initial skepticism of his partners has eased, Agarwal now faces the challenge of identifying opportunities that haven't already garnered the attention of the broader venture capital community.