Locus Robotics announced Tuesday morning it has secured $50 million in additional funding from existing investor Tiger Global Management.
The funding follows a $150 million Series E round in February, led by Tiger Global Management and IT investment firm Bond. The new investment increases the total funding for Wilmington, Massachusetts-based Locus Robotics to $310 million.
More than 1 million warehouse robots will be installed worldwide over the next four years, with the number of warehouses utilizing the technology expected to grow tenfold, according to market research firm Interact Analysis. Estimates of the current number of warehouses with any type of automation are in the 5% to 10% range. Robotics are “massively underpenetrated” in the warehouse and fulfillment sectors today, said Ash Sharma, Interact’s managing director.
Statista reported the global warehouse automation market is expected to reach $15.59 billion this year, growing steadily to $30.15 billion by 2026. As recently as 2016, it was $9.95 billion. With so much space to grow, it can be surprising to learn that 10% of U.S. warehouses were using some form of automated technology by 2016.
Locus currently deploys more than 4,000 robots in over 80 global locations. In February, the company said it expected to double the number of deployed robots by early next year.
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“At a time of increasing volumes and ongoing labor shortages, this new round of funding underscores how critical flexible, scalable, intelligent robotics automation has become to the warehouse and the supply chain,” said Rick Faulk, CEO of Locus Robotics. “Locus is uniquely positioned to drive digital transformation in this enormous global market.”
Interest in warehouse automation is quickly growing as warehouse costs, especially labor, continue to rise. The average nonsupervisory warehouse worker made $18.52 per hour in February, according to Bureau of Labor Statistics (BLS) data. Add in supervisory positions and the average wage jumped to $22.41 per hour, up from $18.60 in 2016. Preliminary BLS data for March reported 14.1 million people working in warehouse and storage operations. In March 2016, there were 9 million.
According to BLS data, cumulative wages for warehouse operations have grown 88.7% in five years, so it’s no wonder more warehouse operators and shippers are looking for automation tools. Besides costs, there is another impact driving automation.
“We are impressed by Locus Robotics’ proven technology, flexible design and customer obsession,” said Griffin Schroeder, a Tiger Global partner. “As their warehouse partners face rapidly growing e-commerce volumes, rising labor costs and increasingly demanding customers, Locus will be ready to provide solutions that work.”
This summer, it was announced that Locus would provide the robotics in a new Stord innovation warehouse in Atlanta. The 386,000-square-foot facility will include robotics and automation tools serving customers, but it will also feature an area dedicated to testing new innovations, Sean Henry, co-founder and CEO, told Modern Shipper.
In June, DHL Supply Chain reached a “framework agreement” with Locus that would add 2,000 robots to DHL facilities by 2022. DHL already has more than 500 assisted picking robots in use today and plans to add 500 more to more than 20 locations by the end of 2021.
Using artificial intelligence and machine learning, the LocusBots have been able to adapt quickly to new environments, allowing DHL to expand its robot fleet into various types of picking processes when needed. Locus Robotics also works with customers in a robotics-as-a-service subscription model, making it easy for customers to add or subtract from their robotic fleet without fear of a large capital investment.
Click for more Modern Shipper articles by Brian Straight.
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