Warehouse robot maker Symbotic goes public in SPAC deal

Wilmington-based Symbotic makes robotic hardware and software for use by Walmart and other big retailers.Symbotic

The financial markets haven’t been too kind lately to businesses that go public through special purpose acquisition companies, or SPACs.

But Wilmington-based Symbotic’s SPAC rollout was a roaring success. The company’s shares spiked 111 percent on Wednesday, its first day of trading, to close at $20.07 on the Nasdaq stock exchange.

Symbotic, which makes robotic hardware and software for retail distribution centers, was acquired by SVF Investment Corp., a SPAC launched by the Japanese conglomerate SoftBank. Symbotic will receive a $200 million investment from SoftBank as part of the deal, along with a $150 million cash injection from one of Symbotic’s biggest customers, the retail giant Walmart. The deal valued the company at $5.5 billion.

A SPAC is a publicly traded shell corporation whose owners can acquire a private company and immediately take it public. SPAC deals became hugely popular in recent years, as they offer a simpler, quicker way for private companies to go public. But they’ve come under fire from critics who note that shares in many SPAC companies end up trading for far less than their original value.

For example, Waltham medical robotics company Vicarious Surgical, which went public in a SPAC last September, has lost more than half its original value of $10 per share. Bedford-based warehouse robot maker Berkshire Grey has lost 74 percent of its value since its July 2021 SPAC offering.

There’s been a big decrease in SPAC deals this year, and some companies, like online news company Forbes Media and ticket vendor SeatGeek, as well as local firms Tomorrow.io and Valo Health, shelved previously announced offerings.

Still, Symbotic has a solid track record. The company recently announced $96 million in revenue for the quarter ended March 26, up from $23 million for the same period last year. Though the company posted a $30 million loss for the quarter, chief financial officer Tom Ernst said this is largely because it continues to invest in growing the business. Ernst said that Symbotic has an $11 billion order backlog, including a deal announced last month to install the Symbotic system in all 42 of Walmart’s US general merchandise distribution centers.

Founded in 2007, Symbotic designs robots and other material handling systems for large distribution centers, where retailers receive shipments of goods from manufacturers, then break them down into pallets of merchandise to be sent to individual retail stores. Since each store needs different merchandise from day to day, custom-packing items for each store is a hugely complex task. Symbotic uses artificial intelligence software to efficiently unpack and store incoming items, then repack them for dispatch to the retail stores.

“We’re far faster, far more dense, far more accurate,” said Ernst.

A Symbotic warehouse needs just 50 percent of the space needed to move the same amount of goods using manual methods, he said, because the robots are smaller than human workers, allowing goods to be more tightly packed. In addition, he claimed the system has an error rate of one item per million items shipped, far better than human workers could manage.

Symbotic is one of many companies that have made Greater Boston a global hub for warehouse robotics. The region also hosts Amazon Robotics, Boston Dynamics, Vecna Robotics, Locus Robotics, 6 River Systems, RightHand Robotics, and others.