Over the past six and a half years, Calgary-based 3D robotics supply chain firm Attabotics has focused its efforts on turning what began as a blank sheet of paper into a commercialized warehouse automation system for retailers.
Following thousands of prototypes and millions of test cycles, the company introduced its ‘Attabot’ robot in September.
“Now we’re at a point where it’s time to really push it on the market and start to scale the business.”
-Scott Gravelle, Attabotics
With its tech finally ready and $95 million CAD ($71.7 million USD) in fresh “Series C-1” funding, Attabotics founder and CEO Scott Gravelle said the startup is prepared to start scaling.
“We’ve spent most of our previous funding on commercializing and hardening the technology, and now we’re at a point where it’s time to really push it on the market and start to scale the business,” Gravelle told BetaKit in an interview.
Attabotics’ all-equity, all-primary financing was led by new investor Export Development Canada (EDC), with support from Ontario Teachers’ Pension Plan Board through Teachers’ Venture Growth. The pension fund previously led the Calgary startup’s $66 million mid-2020 Series C round. This latest capital brings Attabotics’ total funding to around $220 million CAD ($165 million USD).
Founded in 2015, Attabotics describes itself as “the world’s first 3D robotics supply chain system for modern commerce.” The startup claims its ant colony-inspired automated fulfillment solution can increase the flexibility and speed of warehouse processes while also reducing warehouse needs by up to 85 percent, enabling retailers to place robot-run fulfillment centres closer to urban areas and facilitate faster deliveries.
Attabotics replaces the rows and aisles of traditional, legacy fulfillment centers with its patented storage structure and robotics shuttles, which utilize both horizontal and vertical space. The company’s tech has already been adopted by major brands and retailers in the apparel, food and beverage, and home goods verticals, and installed in warehouses across Canada and the United States (US).
In its quest to disrupt the massive commerce fulfillment industry and help close the last-mile delivery gap, Attabotics faces stiff competition from retail incumbents like Amazon and fellow robotics firms looking to bring more efficiency to the storage and delivery space.
During COVID-19, the fulfillment and logistics market grew as delivery demand rose, leading to increased competition for last-mile real estate. But these conditions have since given way to an uncertain economic climate that has seen the pandemic-driven e-commerce boom wane and consumer confidence fall amid the return of physical retail and rising inflation and interest rates. This environment has also made it more expensive to borrow and tougher for startups to raise capital.
Gravelle believes these conditions offer a “great mandate for automation” and pose a significant opportunity for Attabotics’ solution, which helps customers store and ship more products from a smaller, cheaper real estate footprint, and requires fewer workers. Both factors could work to the firm’s benefit as brands and retailers look to cut costs and contend with a labour shortage.
Guillermo Freire, senior VP at EDC’s mid-market group, told BetaKit in an interview that EDC believes Attabotics is poised to become a leader in its sector, citing its competitive value proposition and strong existing customer base, which includes Nordstrom and Canadian Tire.
With EDC’s help, Attabotics plans to start scaling its business globally, where the company already has distributors set up in Southern Europe and South Korea.
Gravelle said Attabotics had been working on this funding round for over six months, noting that securing capital in this environment has been challenging. “Venture capital is so down in the space that I am absolutely thrilled with the metrics of this deal,” he added.
The CEO described Attabotics’ latest financing as a “first close,” noting that the startup has kept the round open for another three months and left “a little bit of room” for other industry players and prospective partners to participate.
For the past two and a half years, Attabotics’ focus was on redesigning and rebuilding the Attabot. After launching its new and improved Attabot in September, Gravelle says “the hard part’s done” and Attabotics’ patented moat has been built. Now, the company’s focus from a tech standpoint is on developing its software, boosting networking capabilities, and layering on more intelligence.
To protect its intellectual property portfolio, Attabotics filed a patent infringement claim against one of its competitors, Boston-based Urbx, in August 2021. In June of this year, a US court partially rejected Urbx’s motion to dismiss the lawsuit. Gravelle said the suit remains ongoing but is “almost” settled.
The space Attabotics operates in features a mix of established warehouse robotics players like Norway-based AutoStore and France’s ExoTech, emerging tech firms like US-based Ambi and Poland’s Nomagic, and American retail giants like Amazon and Walmart, which both recently took steps towards automating aspects of their warehousing operations.
According to Gravelle, while many robotics platforms have built package retrieval solutions, Attabotics offering has “baked in a lot more software and intelligence” to its system than its competitors.
For his part, he speculates that this current market will weed out some other players in the space, forecasting, “early-stage companies that didn’t raise money last year are going to be in a world of hurt.”
“This financial market pickle is going to take out a big hunk of those emerging companies because of how hard it is,” said Gravelle. “The fact that Attabotics got funded in the middle of one of the ugliest venture markets in our space, I think it’s a testament to how much belief our investor base has in our ability to go out and create a great business.”
With files from Meagan Simpson.
Feature image courtesy Attabotics.
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