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Softbank invests in transformation of warehousing market

Japanese-owned SoftBank and Massachusetts-based Symbotic, a company which describes itself as a leader in AI-powered automation technology for the supply chain, have announced the establishment of a new joint venture to tap the warehouse-as-a-service market. Management believes the opportunity to be worth more than $500 billion annually. The JV, called ‘GreenBox Systems’, will use Symbotic’s robotics and software technology to manage single and multi-tenant facilities across the supply chain.

Management said that GreenBox will fundamentally reshape the economics of automated supply chain services reducing inventory and costs whilst boosting SKU count and agility without associated capital expenditures and operational complexity.

Vikas J. Parekh, Managing Partner at SoftBank Investment Advisers commented, “GreenBox taps into the powerful potential of A.I. and other enabling technologies in supply chains, while also making the benefits of automation accessible to more businesses through an ‘as-a-service’ offering. In partnership with Symbotic, GreenBox will equip customers with more intelligent, streamlined, and scalable warehousing solutions while eliminating the burden of major capital expenditures.”

Symbotic expects in excess of $500 million in annual recurring software, parts and services revenue from GreenBox once all systems are operational. SoftBank and Symbotic own 65% and 35% of GreenBox, respectively, and GreenBox will initially be funded with $100 million of capital contributed pro rata by Symbotic and SoftBank to fund operating expenses and initial system purchases.

Symbotic’s automation consists of a fleet of fully autonomous robots with vision and sensing capabilities. These robots induct, store, retrieve and palletize products whilst Symbotic’s A.I.-powered software orchestrates the mobile robots to fulfil customer orders.

Symbiotic is already working with several high profile customers in the US including Walmart which is retrofitting all its distribution centres in the US with the technology, a project which is expected to take eight years. It can be assumed that the new joint venture will allow Symbiotic to roll out its technologies at a much faster rate which in turn will help transform the traditionally labour-intensive warehousing industry.

The automation is especially attractive to grocery retailers given the high volume, low product value and low margin nature of the business. Indeed, Symbiotic was originally developed as an in-house system for C&S, the largest privately owned grocery wholesaler in the US. Whilst the technology has been used for ambient consumer goods and food, the company is developing robots that can work in the cold chain environment and also capable of single item picking, rather than full cases. This would eventually open up the e-retail market to the company.

That being said, the market is getting crowded. Greenbox faces competition from Honeywell, Dematic, Berkshire Grey and Locus Robotics, to name a few. All these technology companies share the same business case – the ability to reduce the time needed to fulfil customer orders, improve accuracy and increase volume throughput. Given the size of the automation opportunity, however, there would seem plenty of scope for all these companies to grow significantly for years to come as large parts the warehouse industry undergo a complete transformation.

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