Business

SoftBank-backed warehouse robot group doubles on first transaction

Rising retail wages will boost demand for warehouse robots “super-fast,” the SoftBank-backed company that is automating all of Walmart’s distribution centers in the US predicts as its valuation rises. more than doubled to $10 billion in its first trading day.

Symbotic, which uses artificial intelligence and wheeled groups of devices to help retailers store packages and assemble pallets in their warehouses, has raised $725 million through a consolidation with a special purpose acquisition company affiliated with SoftBank.

Shares of Symbotic jumped 120% to close at $20.07 on Wednesday, leaving it with an equity value of just over $10 billion.

SoftBank, the Japanese investment group, shelled out $200 million for a 5% stake, while Walmart, Symbotic’s biggest customer, poured $150 million and now owns 11% of the company.

Rick Cohen, the chairman of Symbotic, still owns 77% of the company. Cohen, whose net worth was estimated by Forbes last month at $6 billion, built Symbotic to automate warehouses for C&S Grocery Wholesale, the chain his grandfather founded in 1918.

Michael Loparco, Symbotic’s chief executive, told the Financial Times that rising hourly wages and labor shortages have made the warehouse automation market “red hot”.

Symbotic’s system, he said, allows retailers to eliminate warehousing jobs and address high turnover in their workforce, although he added that it also creates skilled positions. higher.

The company serves five customers including Walmart, Albertsons, and C&S, and reported $11.1 billion in backlogged revenue after Walmart agreed to install the Symbotic system in May at all 42 its distribution center. Symbotic reported nearly $400 million in revenue and $122 million in net loss for the past four quarters.

The company’s listing comes amid historically high inflation and unpredictable supply chains that are putting pressure on US retailers for cost savings and efficiency in their distribution networks. their distribution. Stocks in retailers include Target and Walmart fell sharply in recent weeks after they reported that high inflation and inventories would reduce their profit margins.

Symbotic says its systems, which typically cost $50 million to install, can help customers’ bottom lines by saving 30 to 60 percent of warehouse space and cutting operating and shipping costs. transfer. The company estimates the system could save the typical customer $10 million per warehouse.

Loparco notes that changing consumer needs are also driving the warehouse automation market.

Consumers expect product “when they want it, where they want it, and they’re used to getting it wherever they need it,” he said. “So consumer demand is forcing retailers to find ways to get consumables – products – in the hands of their customers more efficiently.”

Symbotic faces competition from automation companies including Amazon Robotics and AutoStore, but Loparco says the competitors largely offer services “more downstream” in the supply chain in making microprocessors work. model, while Symbotic focuses on the warehouse. That focus, he said, allows the company to tap “undiscovered value” in a market the company estimates is worth more than $350 billion.

About 95% of warehouses in the US and Europe do not have end-to-end automation, Loparco said. But analysts expect demand to continue to grow, with research and consulting firm Gartner predicting that three-quarters of large enterprises will deploy “some form of intralogistics intelligent robot” in warehouses by year 2026.

The acquisition of Symbotic going public is the first Spac merger that SoftBank has completed.

Source link

news7h

News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button