E-commerce shoppers are coming to expect super-fast delivery, but last-mile costs make it tough for retailers to profit.
Micro-fulfillment centers are one solution. Companies can build these tiny warehouses, often staffed partially by robots, closer to their end customers, which reduces labor and transportation costs.
The benefits of warehouse automation and micro-fulfilment see a slew of e-commerce retailers, logistics companies, robotics makers and grocers rushing to get in on the game.
Israel- and New York-based Fabric, formerly CommonSense Robotics, is taking a different tack, with a platform-based model allowing retailers to leverage Fabric’s technology to set up micro-fulfillment centers on their own properties.
Fabric today announced a $110 million Series B round, which will fuel a phase of “hypergrowth” for the company, its chief commercial officer Steve Hornyak said in a statement.
That growth will include contracting to build 14 U.S. micro-fulfillment sites in the next year, including one in New York City that will begin operations in the first quarter of 2020.
Fabric has already put its proprietary systems to use in two fulfillment centers in Tel Aviv, one 6,000-square-foot sorting center for drug store chain Super-Pharm and one 18,000-square-foot underground warehouse (the first in the world, the company claims) for on-demand groceries, according to VentureBeat.
Robots and humans work together to make Fabric’s centers run efficiently. The robots use artificial intelligence to break down online orders into series of retrieval tasks, and humans package the goods for delivery.
Customers will have the option to use Fabric’s platform at their own facilities or sell their products through one of Fabric’s existing micro-fulfillment centers.
By letting retailers get closer to end customers, automate warehouses and adjust micro-fulfillment models to fit their business needs, platforms like this may be the answer to e-commerce’s profitability problem.
The round was led by Corner Ventures, with additional participation from Aleph, Canada Pension Plan Investment Board, Innovation Endeavors, La Maison, Playground Ventures and Temasek.
