Market Report: Goods-to-Person Ecommerce Fulfilment Robotics 2022

Sharp growth in 2021 against a drab 2020 and with increasingly volatile supply chains. Further m&a activity to be expected

Note: all interviews for this report were conducted before russia invaded ukraine.

Record breaking growth

• 2021 was characterised by a series of covid re openings and closures and a kind of return to normal of home working and video conferences
• Multiple vendors reported record breaking growth, including leaders, incumbents and startups ; although there were still pockets of limited growth
• Record breaking growth was obviously achieved after a year of negative or near 0% growth in 2020
• Demand drivers for g2p warehouse automation included significant e commerce growth, low cost of capital and increasingly a lack of warehouse labour
• Public company reports showed that bookings peaked in 2h21, indicating a relatively good outlook for 2022

Supply chain disruption

• Supply chain disruptions affected the whole sector and none of the interviewed vendors had manage to avoid any impact
• The main effects were longer lead times and higher prices for components, often randomly applied; interviews referenced “supply chain whack a mole” where one situation was solved just for another to appear
• Most interviewees thought supply chain disruptions would only get better in 2023
• There were some comments as to what extent supply chain disruptions would affect revenue in 2022
• Any disruptions in 2022 and beyond will also be impacted by russia’s 2022 invasion of ukraine

Growth side effects

• High growth has come with a few side effects, such as customers demanding faster project turnaround, lack of experienced talent and some vendors doing direct integrations
• Customers appeared keen to exploit the heightened ecommerce levels and were increasingly vocal re. Project deadlines
• There was also a serious lack of experienced talent in the sector, especially for software developers and solution designers (the people who design automation solutions)
• Furthermore, many system integrators with packed order books were often unable to entertain smaller projects within the time scale customers demanded
• The consequence of this was that some vendors integrated directly for customers rather than losing projects; note that this was mainly in lighter integration projects

Partnerships & maturing sector

• In 2020 and 2021 many of the top 20 system integrators have partnered with vendors that were founded in the 2010’s indicating that these technologies have reached a level of maturity
• Partnerships also extended to between startups highlighting a new trend in the mixing of g2p systems further enhancing the maturity level
• System integrators typically combine mix and match systems from various vendors to create the strongest and most suitable solution

Fundraising at new heights in 2022

• In january 2022, exotec announced a $335m fundraise at $2bn valuation ( source ). This follows autostore’s $12bn ipo valuation in 2021
• Fundraising rounds are increasing fast and this was the first ever $300m+ round; there were 5x rounds =>$200m in the 2020’s (incl.)

Intellectual property & raas

• The ongoing legal fight between autostore vs ocado pushed some vendors to hire legal counsel
• Raas has experienced a bit more traction in 2021, but remains confused with other opex arrangements such as lease and rental options

Customer solution selection: difficult

• Interviews with customers of g2p solutions highlighted the difficulties in selecting a solution and that there are often subjective influences in the selection, especially when comparing systems from different segments
• Retailers and 3pl customers also have different priorities when selecting solutions and how they are optimised in production