January 26, 2022
Vecna Robotics, which develops flexible material handling automation technology through software and autonomous mobile robots (AMRs), has announced raising $65 million in Series C funding, led by Tiger Global Management. The new financing will help fund Vecna’s technology roadmap with new AMRs and software, and accelerate fulfillment of new orders and expanded operations to address a $165 billion market opportunity for pallet-moving autonomy, the company said.
Vecna’s AMR systems include self-driving fork trucks, pallet trucks and tuggers, which are powered by the company’s proprietary Pivotal orchestration software and a 24/7/365 command center to help distribution, warehousing, and manufacturing organizations automate critical workflows.
“There is huge headroom for growth in automated material handling with over 5 billion pallets in the world being moved by more than 5 million forklifts and nearly 5 million manual operators,” said Craig Malloy, CEO of Vecna Robotics. “This investment, led by such a prominent and supportive group of investors, will allow us to accelerate our roadmap and deliver solutions to the market faster in order to meet the insatiable demand for increased throughput in material handling environments like factories and warehouses.”
In addition to Tiger Global Management, the funding round included participation from new investors Lineage Logistics, Proficio Capital Partners, and IMPULSE. “Shifts in the labor market are accelerating the need for automation throughout the global supply chain,” said Griffin Schroeder, partner at Tiger Global Management. “Vecna Robotics is very well-positioned to help companies in warehousing, manufacturing, and distribution meet this challenge head-on with truly intelligent automation for pallet-sized loads.”
Robotics World spoke with Malloy (pictured, right) about the new funding, whether customers are ready for automation and how the company plans to scale to meet demand.
Robotics-World: Congratulations on the funding. Can you talk about the timing around the funding – is it that investors are ready to invest at a certain time, or is it more about the company looking at its growth and being ready to take the next step?
Malloy: Several things aligned at the same time. In 2020, during peak COVID lockdown, when we couldn’t get out to see some customers and customers couldn’t come to see us, we were working on the product solution in house. When that started to open up in April of last year, there was this flood of interest from big customers because of e-commerce and then the issue with labor availability. Many customers were coming to us and asking about moving toward warehouse automation, and at about the same time, we were really getting a good product market fit with our solution.
We had been working on this for the past several years with our Series A and B financing, so these all coalesced at the same time that the product was ready to go live, it was economical and deployable, and our large warehousing and manufacturing customers were clamoring for this technology. So it seemed to be the right time to go raise a little bit of capital and accelerate our investments in sales, marketing and then also double down on our product development.
R-W: With the new funding in place, where does this allow Vecna to proceed?
Malloy: Like many early stage or growth stage technology companies, we’re very heavily focused on engineering, product development and the technology side. This financing allows us to really scale our go-to-market, sales, channel and marketing organization, and help create demand generation and awareness programs for specific sets of customers. We’re also planning to scale out and build the infrastructure within the company around things like finance and HR, and then also hire more engineers and really double down on the technology.
R-W: Are you happy with the range of different hardware types that Vecna offers?
Malloy: The material handling business can be very specialized. We have three vehicle types that we sell today – a tugger that tows carts for large loads, a pallet truck that does ground-to-ground movement of very heavy loads up to 5,000 pounds on pallets, and then we have a low lift fork truck which is like the classic forklifts that can not only move pallets ground to ground, but they can also pick up things to put on a conveyor or low rack. This satisfies a very large percentage of the workflows within a standard manufacturing or warehousing environment. There’s always corner cases and things we’ll be expanding our product footprint going forward.
R-W: What are your biggest customers looking to do to grow their robotics deployments? Are they looking to expand the number of vehicles they have deployed in a single site, or expand to multiple locations?
Malloy: It’s both of those. Usually they start with a single workflow in a single facility, and they try that out. Then they would expand that to multiple facilities. Many of our large customers have dozens of warehouses or distribution centers or manufacturing facilities around the U.S. Then they would start to look at additional workflows as well, for example, clearing the dock and then putting things in high racks, or cross docking or taking things from storage to put it on a conveyor for further processing. All of these are specific workflows that we can manage, so there’s an expansion on multiple vectors.
R-W: Are customers or potential customers still in that “tire kicking” phase where they’re not sure whether automation is needed for these warehouse and manufacturing environments?
Malloy: We’re clearly past the classic technology adoption curve, the part with innovation labs and experimentation. We’re quickly moving toward an early mainstream market. Virtually every customer that we come in contact with knows that this is a strategic initiative for their organization to introduce automation within their facility. Some are a little further advanced than others. Those customers are getting smarter – they’re doing their research, they’re looking at different options, and they’re coming in with good questions and want to see the solution in action. I wouldn’t say it’s tire kickers any more. It’s more like, “How do we get started on this journey of automation?” It’s also a shared journey between us and them, because everybody’s facility and workflows are a little bit different.
For more details on Vecna Robotics and its AMR hardware and software technologies, visit its website here.