Plenty of logistics experts have spoken of the benefits of warehouse automation, things like more efficient workers, faster fulfillment speeds and lower operating costs, to name a few.
So why is the adoption rate for warehouse automation still so low? In short, the problem for most brands is getting started: For many of them, adding automation means high upfront costs and the scrapping of existing infrastructure.
Nimble Robotics, a San Francisco Bay Area-based autonomous logistics firm, wants to address that problem with a fully automated, nationwide fulfillment system. The company on Thursday announced a $65 million raise to support the buildout of a network of robotic fulfillment centers, which will pick, pack and ship e-commerce orders — while reducing warehouse space by up to 75%.
The Series B round, which brought Nimble’s total capital raised to $115 million, was led by Cedar Pine, a private investment firm. It also included participation by DNS Capital, GSR Ventures and Breyer Capital, among others.
“Finding and retaining warehouse labor, while meeting a 2-day delivery standard, is our customer’s number one operational problem,” said the company’s founder and CEO, Simon Kalouche. “Brands want to leverage robotics and automation solutions to address this issue but are often challenged by the economics. Our autonomous fulfillment centers and 3PL service will give brands access to state-of-the-art robotic fulfillment systems in a cost-effective way without large upfront investment.”
In essence, Nimble will allow its midmarket retail clients to outsource their warehousing and fulfillment operations to a network the company claims will be able to reach 96% of the U.S. population within two days.
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At present, the firm has “between one and 10” automated warehouses across the country, the first of which began operating about a year ago. It has yet to reach full autonomy — some functions are still done manually. But the picking and packing process is handled entirely by robots. The result? Up to a 75% reduction in warehouse size.
“Many companies are working to incrementally automate the warehouse. They’re taking legacy old-school warehouse concepts that were designed around the ergonomics, safety and productivity of people and trying to automate each manual process one step at a time,” Kalouche explained. “We believe that approach leads to a suboptimal solution design — one with marginal gains and very high integration costs which ultimately dilutes the ROI.”
To reach the amount of people it says it wants to, Nimble will need to add to its facility footprint.
Walmart, for example, leverages thousands of stores and a growing number of automated fulfillment centers, which it says will help it offer next-day shipping for 95% of the population. But since Nimble’s clients don’t have the same store footprint, its network will need to rely more heavily on dedicated fulfillment centers.
For what it’s worth, Nimble appears confident in its ability to scale. The company highlighted its growing engineering team, which comprises veterans of NASA, SpaceX, Boston Dynamics and GoogleX — companies with track records of driving innovation.
As with any new fulfillment offering, the comparisons to Amazon are inevitable: Every retailer is looking to recreate the speed and convenience offered by the e-commerce giant. While Nimble’s offering isn’t close to that level yet, the model could eventually create a viable alternative for midsized shippers.
By lowering operating costs through automation, Nimble figures to be able to offer a cheaper fulfillment option, albeit one that comes without the branding and reputation of Amazon. The hope, Kalouche says, is to eventually expand the company’s clientele beyond midmarket firms to include enterprise and individual sellers.
“We’ve built intelligent robots that automate the hardest manual task in the warehouse, the unit-picking and packing process,” he said. “Rather than inefficiently retrofitting warehouses that were designed for people, we’re completely reimagining and reinventing the warehouse to be conducive to robots — where robots can go and what robots can do. This first-principles approach unlocks a completely new type of autonomous warehouse that’s simpler, smaller, faster and more efficient than the best warehouses in the world today.”
It’ll take time for Nimble to add enough next-generation warehouses to compete with Amazon or Walmart’s coverage. But its autonomous, tech-driven fulfillment model could soon gather momentum as brands catch on to the operational savings and efficiencies of automation.