Investments are Causing Massive Disruption in the Automation and Robotics Field

Alex Haines | 17 March 2021

Technology and automation have had a place in distribution and supply chains for decades. Typically, high-end automation was reserved for the largest multi-national organizations with ample capital and a vision to improve efficiencies in their supply chain. While the technology adoption curve is much more mature in Europe than North America, North American business investment in supply chain automation and distribution is increasing rapidly due to changing customer buying behavior, labor shortages, ecommerce adoption, and access to various technologies both mature and emerging. The amount of new technologies emerging to support distribution and supply chain automation is also rapidly increasing; and for good reason.

According to LogisticsIQ and Markets & Markets, the warehouse automation and robotics market is expected to surpass $35 billion by 2026. This market potential is driving venture capital (VC) and private equity (PE) firms to make significant investments in many new and growing automation and robotics companies.  

An Inside Look: Supply Chain and Distribution Automation Fields

Microfulfillment, goods to person (GTP), and robotics are well-known leading automation trends in the supply chain and logistics industry. As expected, they are at the top of investment focus as well. Let’s look closer at recent activity:

Microfulfillment

Microfulfillment, the automation of small fulfillment centers in back-of-store or dark stores, are increasingly common in heavily populated urban areas:

Sample companies with recent funding rounds:

• Fabric provides robotic and aisle-based GTP technology, focused on the microfulfillment space. They received $110 million in Series B, bringing the total to $136 million.
• Takeoff Technologies delivers shuttle-based GTP technology, focused on the microfulfillment space. Takeoff received $25 million in Series C, bringing the total to $86 million.
• Established providers include AutoStore and Dematic.

Goods to Person Technologies

Goods to person technologies like automated storage and retrieval systems (ASRS) with high throughput rates, generally focused on each picking. This is popular with omnichannel and ecommerce industries.

Sample companies with recent funding rounds:

• Attabotics delivers cube-based GTP technology, received $50 million in Series C, led by “Ontario Teachers’ Pension Plan Board, Canada’s largest pension plan”. This brings the total to $82.7 million.
• Exotec provides robotic and aisle-based GTP technology, $90 million Series C, bringing the total to $111.5 million.
• Established providers include AutoStore, OPEX, TGW, Dematic, and Kardex.

Robotics with AI and Custom EoAT

Robotics, specifically standard robotic arms fitted with advanced vision systems and custom end-of-arm tooling is on the rise.

Sample companies with recent funding rounds:

• Covariant provides AI based vision systems for robotic applications, including picking. They saw $40 million in series B funding, bringing total funding to $67 million.
• Berkshire Grey provides AI-imbued, cloud-hosted software that leverages a custom framework to achieve continuous improvement. They received $263 million in series B funding led by SoftBank. Khosla Ventures, New Enterprise Associates, and Canaan participated in the round.
• RightHand Robotics provides AI vision systems that enable robotic picking and robotic movement planning. They received $23 million Series B, bringing the total to about $34 million.
• Boston Dynamics provides AI vision systems for robotic applications such as mixed case depalletization. They are owned by Alphabet, SoftBank, and now Hyundai which shows increasing in valuation.

Autonomous Mobile Robotics (AMR)

Autonomous Mobile Robotics (AMR), self-driving and guided robots, move goods across various waypoints. They can deliver goods to person solutions with robots transporting goods on shelving or by container.

Sample companies with recent funding rounds:

• GreyOrange received $100 million in its fourth round of funding, bringing the total to $270 million.
• OTTO Motors received $29 million in Series C, bringing the total to $83 million.
• Scallog received undisclosed amounts from multiple investors

Automation Technology Advancements

These multiple funding rounds for most companies confirms there is significant market interest in automation and robotics; and that investors are willing to continue allocating capital for the growth potential in these areas.

Investment drives innovation which breeds competition. This creates major advances in these technologies, enabling developments such as goods to person solutions with higher throughput rates, increased storage density, and overall enabling more complex applications that can now be managed autonomously. Additionally, it creates new, lower cost and more flexible solutions that can be coupled together with multiple technologies, creating a broader appeal to a larger market base.

Fully autonomous solutions are now becoming viable at scale. For example, autonomous bin picking robotic solutions achieve:

• Human throughput rates
• Low error rates
• High uptime

Artificial Intelligence (AI) is creating a compound learning effect. AI learns from previous installations and work performed, to build an ever expanding and adapting knowledge base. This compounding effect will become exponential as more companies adopt AI technology. The result will be smarter, faster, more efficient and more cost-effective robotic solutions.

The addition of companies in these fields are increasing competition and forcing competitors to lower prices and improve functionality. The economies of scale are lowering prices for all automation and changing financing or renting of equipment as-a-service (e.g. paying for AMRs on a per-use basis). With the increased demand, attention and investment many talented people are moving into the industry which will only increases the pace of innovation.

Increasing Automation System Options

Rapid growth in automation and robotics in the supply chain and distribution industry is undeniable. The increasing accessibility of this technology and adaptability to numerous industries makes them more appealing than ever to consider.

To best understand which solution makes sense for your application and how to integrate them, contact Bastian Solutions. Our experts have decades of experience in creating integrated and custom solutions for our customers in everything from manual to cutting-edge operations.

Author: Alex Haines