Bedford-based robotics company Berkshire Grey announced on Wednesday that it plans to go public through the latest investment vehicle popular on Wall Street, which values the company at $2.7 billion.
Berkshire Grey said it will merge with a SPAC, or special purpose acquisition company, called Revolution Acceleration Acquisition Corp., a publicly traded company that exists to raise money and acquire companies that want to go public without going through a traditional initial public offering. When the SPAC deal with Revolution closes, expected in the second quarter, Berkshire Grey said it will have about $507 million in cash and no debt.
This is the second big announcement to go public by a Massachusetts tech company on Wednesday. Watertown-based Markforged, a 3D printing firm, said it would go public through a $2.1 billion SPAC deal.
Berkshire Grey makes artificial intelligence-powered automation systems for warehouses and fulfillment centers, and its customers include retail giants Walmart, Target, and TJ Maxx. One of its anchor technologies is a robotic arm that can identify and pick up a wide range of items.
John Delaney, an entrepreneur and former US representative, and Steve Case, the founder of Internet company AOL, launched their SPAC in December 2020. Delaney, who will remain on the board of directors of the merged operation, said the two were looking for a company that could “benefit from the acceleration of certain important trends in our economy.”
“There may be no trend that is accelerating more than the transition to the digital economy,” he said on a call with investors. “Berkshire Grey is a perfect fit.”
The surge in online ordering during the pandemic has drawn accelerated interest from customers, according to Tom Wagner, the company’s chief executive.
“COVID-19 has only increased the pressures and the need for transformation,” Wagner said on the call. “To enable our connected high speed world today, companies must help their human workers with new automation that enables them to process even more.”
News of the SPAC deal revealed financial information about Berkshire Grey that Wagner had previously been careful to keep under wraps. The presentation released Wednesday noted Berkshire Grey expects to be profitable in 2024, and its revenue projections are lofty: $59 million this year, up from $35 million in 2020, and then even more significant growth after — $927 million in 2025.
Berkshire Grey said it has about 300 employees, including 50 new hires since the beginning of 2020, with plans for more. Wagner previously told the Globe that its staff comes from top robotics companies, including Amazon Robotics, iRobot, and Rethink Robotics. Amazon renamed Massachusetts-based Kiva Systems when it purchased the company in 2012 for $775 million, taking its products off the market.
Delaney boasted that Berkshire Grey’s technology is superior, and that it will help other companies combat the “Amazon Effect.”
“Amazon is generally viewed as significantly ahead of other companies in terms of automation and robotics,” he said. “But Berkshire Grey, whose technology is better than Amazon’s, in our opinion, will enable its clients to meet Amazon driven consumer expectations.”
Berkshire Grey is one of many warehouse automation companies making noise in the Boston area, which is ripe with robotics leaders.
Last week, Wilmington-based Locus Robotics, which makes mobile picking robots, raised $150 million, pushing the company’s valuation by investors to $1 billion, giving it “unicorn” status. Both Locus and Berkshire Gray have a recurring revenue model, which means they sell subscriptions to their warehouse automation systems, not robots themselves.
In 2019, Waltham-based 6 River Systems was acquired by e-commerce firm Shopify for $450 million. And at the end of last year, when Hyundai Motor Company said it would buy a controlling stake in Boston Dynamics, Hyundai said it planned to roll out a mobile robot for use in warehouses by the end of 2021.
Berkshire Grey was founded in 2013, and emerged from “stealth mode” five years later. Wagner said the company was is stealth mode for that many years to build a technological advantage.
Last year the company said it raised roughly $265 million in venture capital funding. Existing shareholders in Berkshire Grey — Khosla Ventures, New Enterprise Associates, Canaan Partners, and SoftBank Group Corp. — will maintain their equity stake in the new company, according to the announcement.