Warehouse Automation investments exploding
Investors included existing shareholders and Thomas H Lee Partners and Softbank Vision Fund. Both THL and Softbank have invested heavily in the warehouse automation and robotics space for some time, most recently with their combined deal bringing AutoStore to public markets in 2021.
e-Commerce is the common thread
The common thread among the massive warehouse automation raises is a belief that e-commerce will continue to grow in the short to medium term... AND order more warehouse automation equipment because there is a lack of people who wants to work in warehouses.
This hypothesis is correct to some extent with Amazon and others having increased their average hourly pay up to and above $20 in many cases just to attract people.
However, this is also a property play. A lot of "e-commerce warehouses" are often located in areas with a high penetration of warehouses that can often deplete the available staff pool in these areas.
So why do people continue to build warehouses in these areas? Good question. Often it can be advantageous to build next to another warehouse for courier benefits and these warehouses are often located to key arterial highways that can improve delivery times.
Many 3PLs and retailers have located in the same areas as there has been access to a population willing to do work in warehouses, but the growth of the sector has meant that the available staff pool has dried up in some places. The result is a focus on automation to draw down labour requirements in these warehouses.
The $240m valuation...
According to a Forbes article (source) on RightHand Robotics' fundraise, the company was valued at $240m in its Series C round.
So, did Ocado overpay in 2020 or did RightHand Robotics sell its shares on the cheap in 2022? What is Your view?
Note that STIQ is not a valuation expert and this article is not investment advice. For more insights, download our Goods to Person reports: Link to STIQ's free warehouse automation reports
Source: STIQ research & analysis, Forbes Feb 2022 article (link)
Think Different? Add a comment!