Robotic Tire Changing Business Goes Bust

A Detroit-based startup hoping to normalize robotic tire changes has filed for bankruptcy, perhaps offering hope to all the humans worried that they're about to be displaced by automation. RoboTire, which launched in 2019, had stated its intention to speed up vehicle maintenance for auto repair shops, fleet operators and dealerships. Now its status is Chapter 7.

Some of the claims made were pretty lofty, however. The business had said that its robotic arm would have the effect of reducing multi-hour repairs into 15-minute tasks. While the device does seem to be adept at changing tires, it’s hard to imagine a scenario where it actually saves that much time. Footage of the arm is impressive, as it optically measures the wheel and can perfectly apply the correct torque values. But it's quite slow and can only tackle one side of the vehicle.

Your author remains confident that he could have removed all four tires in less time with the aid of an impact wrench. RoboTire’s main advantage seems to be its ability to work in tandem with automated wheel mounting and balancing robots. However, that means interested businesses would have to pay far more money to reap the rewards. A human mechanic is still far more versatile and takes up much less space.

With support from Discount Tire, the company had secured a round of Series A funding in 2021 and was reportedly seeking more investors as it sought to expand the business.

"Our focus is to revolutionize the way tires are changed, and collaborating with Discount Tire — an iconic automotive and tire industry leader — will make our innovative technology more widely available to consumers who need both speed and service as part of their daily lives," RoboTire Chief Executive Victor Darolfi previously stated. "We are immensely proud to receive this backing from our investors and know this is just the first turn down a long road to success for our company."

But the road appears to have stopped with the firm filing for Chapter 7. According to Crain's Detroit Business, RoboTire Inc. filed for protection in the U.S. Bankruptcy Court of Delaware on Friday carrying $12.7 million in liabilities. CEO Darolfi listed $12.3 million in assets — most of which reportedly pertained to copyrights and trademarks.

From Crain’s:

That intellectual property is subject to a lien by Reinalt-Thomas Corp., doing business as Discount Tire. The Scottsdale, Ariz., tire retail giant, which was founded in Ann Arbor in 1960, has a $1.6 million secured claim against the value of the debtor’s intellectual property. The retailer is also the startup’s largest unsecured creditor, with a separate $3.3 million claim.

A spokesperson for Discount Tire declined to comment on the case. Inquiries were left with RoboTire and Alessandra Glorioso, attorney at Dorsey & Whitney LLP in Delaware, who represents RoboTire in the case.

The company, launched in suburban Detroit in 2018, designed technology to automate tire-changing using a robotic arm, claiming it could dramatically reduce the time it takes to complete a job. The startup landed a $7.5 million Series A financing round in 2021.

In addition to Discount Tire, participants in that round included Detroit Venture Partners, the venture capital firm founded by billionaire Dan Gilbert. The firm was just a small equity investor and is not listed as a major creditor in the bankruptcy case.

RoboTire has numerous systems being piloted around the United States. But it had been ramping up operations in Metropolitan Detroit and with its headquarters located in nearby Plymouth, Michigan, shortly before openly confronting financial difficulties.

Last month, American Funding Services filed a lawsuit against RoboTire and Mr. Darolfi over claims that the business owed more than $130,000 after going into default last October. But it looks like it wasn’t the only business RoboTire still needed to pay.

Cain’s reported that there are roughly 70 unsecured creditors involved in the case. Many of those were said to be located in Michigan — including Alro Steel of Jackson, Allied Inc of Ann Arbor., H&P Technologies Inc. of Warren, Herkules Equipment Corp. of Walled Lake and Michigan Glass Coatings of Auburn Hills. The full details of the RoboTire bankruptcy have yet to be provided. However, all assets are assumed to be liquidated in the hopes of settling some corporate debt as this is a Chapter 7 filing.

[Image: RoboTire Inc.]

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