Optimizing the E-Commerce Supply Chain

Announcing our investment in Locus Robotics

We are delighted to announce our recent Series B investment in Locus Robotics, a Boston-based developer of autonomous mobile robots, which enhance the productivity of today’s e-commerce warehouses and distribution centers. The infrastructure underlying the e-commerce category has never been under greater pressure to optimize, and Locus has developed a flexible solution that allows warehouses to demonstrate step function improvements in their fulfillment productivity.

E-commerce has been on a tear over the last decade. Last year, online revenues in the US reached $395B, having grown consecutively by double-digit percentages in each of the last eight years. Amazon continues to post market leading numbers and is setting the expectations of consumers for next day (or even same day) delivery. The trajectory of e-commerce has become inexorable and other retailers have no choice but to compete.

Yet with such rapid acceleration in demand, the core infrastructure on which the e-commerce category relies – the warehouses and third party logistics providers (“3PL’s”) that store, pick, pack, and ship the items that consumers order online – is still far behind. Most distribution centers today still rely on dozens of manual processes and hundreds (if not thousands) of associates that will walk anywhere from 12 – 15 miles per day locating items that need to be shipped. Kiva Systems, which was the first significant autonomous warehouse automation solution to come to market in the US, was acquired by Amazon in 2012 and became what is now known as Amazon Robotics. With the acquisition, the company left a void in the market that is now primed for the next wave of automation solutions. These dynamics, coupled with some of the tightest labor markets in recent history, have left fulfillment centers struggling to keep up.

This is precisely the opportunity that Locus is addressing. The Company’s fully autonomous mobile robots work directly with warehouse associates by assisting in locating, identifying, and picking items during the fulfillment process and dramatically reduce the amount of time that each task requires. Their individual bots provide the best lower cost alternative to large scale industrial conveyors and retrieval systems, and can be flexibly deployed in a matter of days without requiring any changes to the existing warehouse footprint. We see the flexibility as a key to helping operations managers scale up based on customer demand and to relieve the pressure of seasonal variability.

The Locus bots sit at the intersection of several strategic trends that we have been following here at ScaleVP, including autonomous navigation, machine learning, computer vision, the rise of e-commerce, and the related demand for warehouse automation, and we feel as though the opportunity for continued innovation is promising. Locus is leveraging the huge investments going on in the autonomous driving field that is driving down the cost of LIDAR sensors, and iterating rapidly in the fields of motion planning and computer vision.

The Locus team brings to bear an unusual depth and understanding of warehouse operations, and experience in building related automation solutions and logistics software. We are excited to partner with Rick and the rest of the team, and have strong conviction that Locus Robotics is in a compelling position to address the expanding need for automation within the e-commerce category. Welcome to the ScaleVP family, Locus!

Sam Baker co-authored this blog post.