Locus Robotics, a Wilmington company that aims to automate warehouses with robots, said on Wednesday that it has raised $150 million as the pandemic accelerates the need for companies to ship more goods faster.
The new funding round pushes the company’s valuation by investors to $1 billion, giving it what is known as “unicorn” status.
“The pathway to becoming a unicorn is littered with billions of investment dollars and companies looking for a problem,” said Rick Faulk, the chief executive of the company. “Locus has done just the opposite: We saw a global problem and developed a solution.”
Locus aims to increase the volume of products a company can ship out of a warehouse by pairing robots with humans. As they pluck items from shelves, workers place products in a bin attached to a mobile robot. Then the robots roll around and deliver full bins to other areas of a warehouse where products are packed for shipping. The robots — which use artificial intelligence and machine learning technologies — can reduce the total distance a warehouse worker walks during a shift by up to 80 percent, Faulk said.
“That allows a facility to ship twice the volume out of the same building footprint,” he said. “It makes the job more enjoyable as well.”
Faulk said companies had already been experiencing an increase in online orders, but that trend has been exacerbated during the pandemic. Locus works with several industries including retail and health care, and it recently inked its biggest deal with logistics giant DHL.
“Companies cannot find enough labor to ship what is sold, and everyone realized that is a really big problem,” he said.
Faulk said Locus also provides company leaders with a “warehouse in their pocket,” since they can see the status of a facility on their smartphone or on digital dashboards.
“We enable the digital transformation of these buildings,” he said.
With the latest funding, Locus plans to invest in research and development while expanding its fleet of robots, looking to double both its 40 customers and 80 warehouses by the end of the year. Locus also plans to grow its 165-person team by about 75 workers, with positions primarily based in the Boston area.
Locus was spun out of Quiet Logistics in 2015, three years after Amazon bought Quiet’s robot supplier, Massachusetts-based Kiva Systems, for $775 million. Amazon then took the technology off the market and renamed the company Amazon Robotics, prompting Quiet to launch its own robotics firm.
Since then, the market has exploded, with researchers at industry firm Interact Analysis expecting the number of warehouses using robotics to grow ten-fold by 2025.
In 2019, Waltham-based 6 River Systems was acquired by e-commerce firm Shopify for $450 million. And at the end of last year, Hyundai Motor Company said it would buy a controlling stake in Boston Dynamics, valuing the robotics company at $1.1 billion. As part of the announcement, Hyundai said it planned to roll out a mobile robot for use in warehouses by the end of 2021.
“This section of the market, warehouse automation, is growing like crazy,” said Tom Ryden, the executive director of industry association MassRobotics. “Massachusetts is lucky to have many of the leading companies in this space.”
Locus’s business is based on a recurring revenue model, which means it sells monthly subscriptions to its robot fleets, rather than the robots themselves. Faulk said the company is focusing on growth for now but plans to reach profitability within the next several years. An initial public offering is on its radar.
In its first two years, Faulk said Locus tripled its revenue, and in the last two years, it has doubled. Faulk said the recent funding round came together in less than two months and was “way oversubscribed.”
“This round is significant, with some of the major private equity venture firms in the world,” he said. “The great thing about fundraising processes today is you can do it all over Zoom... This was the fastest, smoothest process I’ve ever been involved in.”
The round was led by BOND and Tiger Global Management, which has backed companies including Facebook and Peloton, as well as Locus’s previous investors Scale Venture Partners and Prologis Ventures, the venture arm of a logistics facility firm.