Robotics company gets $25M to bring Amazon-like automation to small retailers

It has become imperative for retailers of all sizes to automate fulfillment. That's created a huge opportunity for robotics companies.

Walmart is using aisle-roaming robots to keep its shelves stocked Walmart wants to improve out-of-stock issues and price discrepancies in its stores. So, it's begun testing the use of aisle-roaming robots. The world's largest retailer has had a well-documented struggle with empty shelves in its stores nationwide. A few years ago, Walmart admitted that it was likely losing out on $3 billion in sales due to out-of-stocks. With an infusion of automation, however, Walmart is hoping to keep more merchandise on its shelves. It wants to task robots with repeatable, predictable jobs, like scanning shelves for out-of-stocks. These robots can also scan for incorrect prices and mislabeling. The nondescript robots include a base with an attached tower equipped with cameras. The cameras do the scanning, and when problems are found, the robots alert store employees. Employees can then restock shelves and fix errors. Walmart says it's been testing the robots in a small number of stores in Arkansas, Pennsylvania and California. It's now expanding the trial to an additional 50 locations. Walmart is using aisle-roaming robots to keep its shelves stocked

Video: Walmart is using aisle-roaming robots to keep its shelves stocked

Locus Robotics, which makes autonomous, mobile robots for use in e-commerce fulfillment warehouses, just announced $25 million in a Series B round.

Locus is one of a growing number of warehouse robotics providers helping retailers and third-party logistics operators automate existing operations without major retrofits.

The trend is being driven by an industry-wide labor shortage and by the exploding e-commerce market, which is expected to grow by 20 percent CAGR to become a $4 trillion global market by 2020, according to Nielson.

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"E-commerce fulfillment warehouses are under tremendous pressure to meet increasing demands for fast, accurate order fulfillment in the face of significant labor challenges," says Rick Faulk, CEO of Locus Robotics. "Locus Robotics's collaborative robots allow warehouse operators to significantly increase worker productivity while economically closing the growing labor gap."

Of course the other factor driving the rapid shift toward automation in e-commerce is Amazon. "In an economy largely dominated by Amazon," continues Faulk, "Locus arms independent operators with the means to compete effectively."

In 2012, Amazon acquired Kiva, which makes automation solutions for the logistics industry. Not long after, you could order mouthwash in the morning and get it the same afternoon.

The $775 million acquisition, Amazon's second-biggest at the time, gave the company a massive competitive advantage over rivals like Wal-Mart and put it years ahead of smaller retailers.

Now, a new generation of companies like Fetch Robotics, OTTO Motors, and Locus are bridging the gap with autonomous carts and pickers that can navigate semi-structured environments like warehouses.

"We look for huge markets, burning needs, and compelling and innovative technologies that address those needs," says Rory O'Driscoll, General Partner at ScaleVP, which invested in Locus. He rightly sees a big opportunity for the kinds of turnkey robots Locus provides, which can be deployed overnight without overhauling operations.

"We try to invest just when that innovative technology is ready to jump from an interesting idea that might happen to a core business imperative that is happening right now. For collaborative robotics the time is right now. Robots can work safely with humans, each doing what they do best, to double human productivity and lighten the physical workload in industries like logistics. We anticipate an explosion of this trend in the next few years, and Locus will be at the heart of that trend."