Orders in an hour? This (non-Bezos) company thinks it has the recipe

Democratizing ultra-fast delivery is the next step for the logistics sector. Robots will make it possible.

Micro-fullfillment centers in cities to challenge Amazon Democratizing ultra-fast delivery is the next step for the logistics sector. Robots will make it possible.

A company that's pioneering an innovative "micro-fulfillment" model that uses robots and geographically strategic fulfillment centers to get products to customers in a hurry just raised $110 million in a Series B. Fabric, formerly CommonSense Robotics is based in Israel but will use the funds to drive a U.S. expansion.

Translation? We might soon be seeing ultra-fast order delivery from a company whose boxes aren't stamped with smiles. 

The recipe to democratize the last-mile logistics sector, according to Fabric, is a blend of high tech fulfillment robots and smaller-than-average fulfillment centers located in urban zones close to customers. The idea is that the physical remoteness of typical logistics facilities prevents most retailers from offering true on-demand delivery outside a few major metropolitan markets. But by harnessing networks of tiny automated hubs, micro-fulfillment could enable retailers to store their goods in the hearts of cities while still benefiting from the efficiency of automation.

Earlier this year, Fabric (then CommonSense Robotics), passed an important milestone with its first 1-hour fulfillment delivery, which is made in partnership with Super-Pharm, an Israeli health and beauty retailer.

Fabric is currently building a new infrastructure of micro-fulfillment centers in the U.S. that it hopes will help transform last-mile logistics so that on-demand fulfillment can become profitable and scalable for every business. In 2020, the company plans to rapidly expand across the country in partnership with some of the U.S.'s leading brands, which are hungry to take on the Amazon juggernaut but have lacked the scale and technological infrastructure to do so.

"Our production-proven micro-fulfillment platform is fundamentally changing the face of retail," said Elram Goren, Fabric CEO, and co-founder. "Driven by our world-class proprietary technology, we are designing and building an entirely new logistics infrastructure in cities so that on-demand fulfillment and delivery can happen faster, cheaper, and at scale. Whether it's enabling retailers to profitably fulfill one-hour deliveries or helping businesses restock their storefronts more efficiently, we aim to be the solution that empowers businesses to better serve their customers."

By placing automated fulfillment centers near end-consumers as opposed to in massive warehouses located outside cities, which how fulfillment currently works, Fabric believes it can deliver on a winning combination of speedy delivery, cost reduction, and scale of operations. In October 2018, Fabric launched the world's smallest automated fulfillment center, and today the site processes up to 600 orders a day out of just 6,000 square feet, far smaller than most fulfillment centers. Fabric also recently announced the buildout of an automated grocery site with three temperature zones, the first of a 12-site deal in partnership with one of Israel's largest grocery chains.

"The demand from the market for a location-first approach to automation is just staggering. Now, with this latest round of funding, Fabric is poised to enter a new stage of hypergrowth," said Fabric CCO Steve Hornyak, who joined the company earlier this year. "We currently have 14 sites under contract and are rapidly expanding our U.S. presence with plans to launch micro-fulfillment centers in several cities across the U.S. in 2020. The first site in the NYC area is already under construction and will be online in Q1 2020. Our flexible platform and deployment models empower businesses to get closer to their customers while maintaining profitability in whatever way works best for them."

Fabric offers fulfillment as a service, which should be attractive to retailers wary of making capital expenditures on technology. It could also open up the market to smaller retailers and even moms and pops. The company is also expanding its model, now offering a platform that allows retailers to build and operate their own private network of fulfillment sites on their own real estate.

That means stores that have physical locations could suddenly find themselves armed with the logistics infrastructure to offer rapid-delivery. 

Fabric has raised $136 million to date. This latest Series B was led by Corner Ventures with participation from Aleph, Canada Pension Plan Investment Board (CPPIB), Innovation Endeavors, La Maison, Playground Ventures and Temasek.