As evidenced by recent layoffs and scaled-back expansions, on-demand delivery is a challenging space. Brands, retailers and operators have moved to deliver with maximum efficiency, a strategy that has led to the rise of “dark stores” in the past few years. A dark store, also known as a micro-fulfillment center, is a small, local store without customers where employees pack orders from shelves and racks for online delivery orders.
On-demand delivery startups like Getir and Gopuff operate hundreds of dark stores in the cities they serve — one analysis predicts that 45,000 dark stores will operate by 2030. But while storefronts are cutting delivery times, skyrocketing rents and staffing requirements make them expensive to operate — eating away at revenue.
Eyal Yair proposes an alternative in the form of robotic “nano-fulfillment” centers. He is the co-founder and CEO of 1MRobotics, which takes an automation-first approach to running dark stores for faster delivery. The company launched today under $16.5 million in Series A funding led by Ibex Investors, with participation from brands including Emerge VC, Target Global and INT3, as well as Nespresso, AB InBev and REEF Technology.
Series A 1MRobotics raised to $25 million, including a previously undisclosed $8.5 million seed round.
“The pandemic has driven e-commerce sales, buying habits and consumer behavior to the next level entirely – this new standard demands a new kind of infrastructure to support rapid delivery operations on a global scale,” Yair told Technology Flow in an email interview. Prior to co-founding 1MRobotics with Roee Tuval, Yair led and sold two ventures – CartCrunch and Netonomy – focused on grocery e-commerce and cyber security, respectively.
“Manual dark stores just don’t cut it anymore and [1MRobotics] Acts as a clear catalyst for full technology adoption,” he continues with a bombshell. “1MRobotics does something amazing: enabling a hyperlocal, fully automated fulfillment network that is better at service level, better for ESG and less expensive than legacy regional next-day fulfillment solutions. It’s the holy grail of product distribution.”
Yair notes that the 1MRobotics platform — a small warehouse of robots that pack orders — can be installed almost anywhere and does not require regular maintenance, ideally removing some of the logistics of deliveries. By leveraging AI, the system learns supply and demand patterns seen in the order flow of goods stored in the warehouse, Yair said, and “optimizes” stock in response.
This model is no different for Fabric, which raised more than $300 million at a valuation of more than $1 billion for its micro-fulfillment robotics technology. Other rivals include better-established players such as Atabotics, Nimble Robotics and AutoStore (which went public last October), UK-based grocery fulfillment technology company Ocado Group and Noyes Technologies.
It is a cutting edge industry. In July, Fabric laid off 40% of its workforce as it pivoted from a service provider to a platform. Inherent in the shift is the recognition that on-demand delivery is declining from its pandemic peaks; A recent survey by Rensselaer Polytechnic Institute found that more than 90% of people who used online delivery services during the pandemic are likely to return to their original shopping habits.
Yair insists that 1MRobotics is poised to differentiate and evolve with “cutting-edge” robotics technology that is “significantly” more efficient than most. The jury is out, but the company’s early traction suggests there may be some substance to those claims.
One factor in 1MRobotics’ favor is that investors — and customers — are still relatively bullish on transportation and logistics tech companies. Logistics startups in particular attracted big VC money in 2021, raising over $27.5 billion. Meanwhile, big-name brands have doubled down on full automation, with Walmart, for example, announcing it will bring robotics to 25 of its regional distribution centers.
“Consumers will continue to demand convenience over the next decade, as retailers and brands expect faster and faster delivery of their favorite products. However — almost all last-mile facilities today are manual, operating very inefficiently,” Gal Gitter, partner at Ibex Investors, said via email. “That’s where 1MRobotics comes in — providing ‘plug-and-play’ full automation for last-mile fulfillment in almost any category, while minimizing cost and associated environmental impact. We believe the future of commerce is moving towards a network of fully automated and distributed nano-fulfillment sites – that’s what 1MRobotics will enable.