Leveraging Robotic Platforms in the Warehouse

👋 Welcome

Welcome to this week’s edition of the Supply Chain Tech Newsletter and thanks to everyone who subscribed recently! Through this newsletter, our goal is to build an ecosystem of founders, operators, investors, and industry experts who share the same vision.

One of our key interests in the past year was and still is on robotics within the realm of supply chain. Recent years have especially highlighted the impressive operating efficiency of new robotic platforms in warehouses and beyond, fueled by the respective funding into the sector. In this edition, we dive deeper and understand the different pillars of the warehousing robotics ecosystem.

Leveraging Robotic Platforms in the Warehouse

Logistics and supply chains have been at the core of disruption over the past decades, going from same-day delivery to digital freight forwarding. Nevertheless, one key area that was less driven by automation and disruption relying more on human labor rather than automation is warehousing.

Despite larger inventories and fewer workers, customers expect faster shipping times, especially in the business-to-consumer (B2C) space. Many enterprises also struggle with tracking inventory effectively through their current ERP systems which are riddled with human errors. As a reference, the process for an article running through a logistics warehouse can be summed up in three steps:

• On arrival, items are scanned and registered as inventory for operators to understand what is currently available in the warehouse

• Once registered, items are placed & stored in the warehouse to be picked up once a request for delivery comes in

• If goods are to be shipped, they are collected based on their registered location, packaged and made ready for departure

Many of these processes are still fully or partially managed by humans, underscoring a major challenge for logistics companies today: a shortage of workers needed to maintain and oversee inventory. This creates a conflict with the push for greater efficiency, as more warehouses seek to automate while still relying on human oversight. E-commerce, which holds the largest share of the logistics market and is experiencing the fastest growth, is particularly eager to scale its capabilities—especially since preparing items for shipment remains the biggest bottleneck.

To address these issues, logistics providers are turning to an all-in-one approach for digital warehouses that leverages robotics to optimize inventory management, order picking, and inbound/outbound logistics. Robotic solutions come in several forms, including fully autonomous AMRs (Autonomous Mobile Robots), semi-autonomous robots that require task allocation, and tele-operated AGVs (Automated Guided Vehicles) where humans remotely control the robots.

What can be done by robots within a warehouse?

Whilst we see different levels of autonomy, we have yet to understand what kind of tasks & respective markets open up to include robotic platforms. Given the plethora of tasks, robots have found their first application spaces in the warehouse over the past years:

Order Picking: Put the right pieces in the right location

Picking, packaging, and manipulating goods remain the toughest actions to automate in a warehouse as the operations and the goods to be handled vary strongly. Automated lines of operation for single usage have been part of the game for decades, where a new wave of robots enables more complex handling of tasks and working at a similar level to humans. Given the traction in this space, order picking is the largest industry of the tasks mentioned, reflected in a $9.19bn market size in 2023 and growing to $17bn in 2030.

Nomagic is applying autonomy to order picking with its robotic arm that can grasp a wide range of SKUs. Using computer vision, the arm scans items on a tote, picks the correct ones, and places them in an order box. Similarly, Sereact.ai offers any manipulation of goods similar to hands, being able to cover tasks through natural language. Scallog offers a similar picking system with a fleet of AMRs that retrieve totes and bring them to picking stations equipped with robotic arms.

Warehouse Operations: Orchestrating the Flow

Running a warehouse and optimizing for efficiency can grow tiresome and initiatives might be counterproductive in the long term, if not integrated properly. This cluster represents the highest variability in solutions to move goods between two places, depending on the location & the goods to be transported. Overall the industry is set to grow from $3.45bn in 2024 to $9.11 bn by 2032 with a CAGR of 12.9%

Enabl found that each of its teleoperated forklifts could perform the work of three humans with less risk of accidents or damage. Mytra's AMRs use computer vision to build real-time maps of facilities and navigate autonomously to transport pallets, eliminating manual workflows. Outrider's autonomous yard trucks can complete trailer moves with precision control, reducing damage and delays, and so does Fernride.

Inventory Tracking: Know what you do (not) have

One of the most tedious tasks in warehouses is keeping track of incoming & outgoing goods, where horror stories of vanishing inventory haunt warehouse managers until today. Current estimates put the market size at $2.2bn and set to grow 13.1% annually.

One of the major players is Dexory. The team focuses on their own robotic platform that integrates with warehouse management systems to enable easy control & monitoring. Its platform ingests data from various robotic systems to create digital twins of facilities and then uses AI to dynamically optimize robot utilization based on demand, going beyond traditional tracking and moving towards prediction. Corvus Robotics & Gather AI leverage their fleets of drones to manage inventory. More on drones in logistics another time…

Getting traction off the ground

Despite the innovation in the field and the quicker adoption of robotic platforms, selling into industrial & large-scale logistics operations remains tough. Given the scale of disruption & the size of the new robotic platform to impact the business, most of the contracts come with a long sales cycle.

Most of that can be traced back to the original clients in need of robotics, which can be split into three main sectors:

• Any e-commerce firm managing its logistic hub

• Large logistics providers maintaining warehouse infrastructure as B2B business (DHL, DB Schenker)

• Industrial players which have to handle material & production

Especially the last two parties have yet to decide whether to opt for an internal platform to be developed (DB Schenker and BMW as an example) or fill in the gaps for now (Daimler being a partner of Sereact as a reference).

Getting to that choice is an additional hurdle, as large contracts take time to materialize and until the product reaches a point to be deployed. Current estimates from inception to first contract revolve around two years (Fernride got its first case study in 2021 after its 2019 pre-seed; Dexory got a pre-seed in 2020 & seed in 2022 to close Maersk in mid-2022), although much more recent estimates highlighted closer timelines to five to six months as of now.

Conclusion

Overall, robotics in logistics & supply chain is a busy space with multiple platforms coming up with a lot of funding at this point. There is no one robot to rule them all given the differences in tasks, leaving the door for a common industrial robotic software & hardware platform open. Especially warehouse operations and order picking have received a majority of the funding to date, while inventory management has yet to be tackled more widely. We’re excited to see new companies in this space tacking on the challenge of increasing demand in storage and distribution.

We are keen to work with founders who started to explore the topics above - please reach out to us!

💡 Interesting Reads

• Getting Warehouse Automation Right | McKinsey

• The Real Force Behind the Robotics Boom: It’s Not Just Labor Shortages or AI Hype | Substack

• AI Robots Are Entering the Public World—With Mixed Results | WSJ

• Robots Struggle to Match Warehouse Workers on ‘Really Hard’ Jobs | New York Times

• How Trump’s Trade War Could Affect Climate Change | New York Times

• Shipowners switch to smaller vessels as world trade reroutes from China | Financial Times

• Help Wanted: U.S. Factories Seek Workers for the Nearshoring Boom | WSJ

• Why Food Companies Want Consumers to Buy More of Everything | WSJ

💸 Funding Rounds

• Food supply chain start-up Cerve lands £3.5m seed funding | Sky News

• PartsCloud secures €5 million to digitalise spare parts management | EU-Startups

• Matchory raises €6M Seed extension for supplier discovery | Tech EU

• Flowfox receives 7 million euros in financing round | StartupCity Hamburg

• Loadar's advanced freight management tool receives $4M investment | Tech EU

• Sereact's €25M Series A raise boosts AI robotics zero-shot visual reasoning | Tech EU

• Trace.Space secures $4M seed to expedite product development in manufacturing | Tech EU

• DeepTech startup assemblean raises €1.8 million to revolutionise manufacturing automation | EU-Startups

👷 Jobs in the Industry

Interested in working in Supply Chain Tech? Here are some startup-ups and scale-ups hiring across a variety of roles:

• Dexory: Sales Director (Wallingford/ Remote, UK)

• Dexory: Senior Marketing Executive (Wallingford, UK)

• Sereact: Partner Sales Manger (Remote)

• Enabl: Head of Finance (Karlsruhe, Germany)

• PHINXT: Head of Sales (London, UK)

• Fernride: Senior FP&A (Munich, Germany)

• Relay: Senior Business Analyst (London, UK)

✍️ Want to contribute?

As we grow the Supply Chain Tech newsletter, we are keen to get as many people involved as possible! If you’re interested in supply chain topics and want to help us spread the word on this exciting space, please do get in touch. We’re always looking for guest authors and collaborators.

Supply Chain Tech Newsletter Team

Philipp Werner is an operator-turned investor and Partner at Project A. He specialises in investing in global supply chain technology and serves on the board of directors of related companies like Relay, Metycle and Enapi. Philipp also launched the Project A Studio, partnering with founders at the pre-idea stage, and previously worked hands-on with 25+ VC-backed startups including Sennder, Trade Republic, and Spryker. 

Ciara Gumsheimer is an Associate at Project A covering global supply chain technology and climate technology, with a particular interest in vertical and sustainable supply chains. Prior to joining Project A, Ciara worked at a FinTech startup in Berlin, after completing degrees at the University of Cambridge, UC Berkeley, and EDHEC Business School.

Project A Ventures is one of the leading early-stage tech investors in Europe with offices in Berlin and London and we are early backers of the logistics unicorn Sennder. We have invested in other notable companies in Global Supply Chains, such as Pactum, Metycle, and Relay. In addition to $1bn assets under management, we provide our portfolio companies with exclusive operational support by our team of 100+ in-house experts including all areas from Tech and Product Development to Talent Acquisition and Marketing. Other notable portfolio companies include companies such as Trade Republic, KRY, Spryker, Voi, Catawiki, and WorldRemit.