Robotics are playing a growing role in the world of e-commerce logistics and fulfillment — where they are seen not just as a way to speed up operations but to drastically reduce the costs of running them — and today a startup developing software and hardware specifically in the area of robot picking is announcing some funding.
Nomagic, a Polish startup that has built a robotic arm that can identify and pick out an item from an unordered selection (say, from objects in a box) and then move or pack it into another place, has raised $22 million, funding that it will be using towards both growing and expanding its business.
Nomagic's robotic arms were first deployed to work picking up and moving small consumer electronics and related items — phones, cables, small toys — before extending to items like bagged apparel. Kacper Nowicki, the CEO who co-founded the company with Marek Cygan (CTO) and Tristan d'Orgeval (CSO), said that the plan is to add in more categories like groceries over time, reflecting changing consumer habits and what people are buying online these days. “That is the long-term goal,” he said.
The company already has a number of customers in sectors ranging from fashion, e-commerce and third-party logistics providers — one of the more prominent is Brack.ch, a Swiss-based “everything” store similar to Amazon in terms of its physical product range. And while it currently bases its tech around computer vision to identify objects and read codes, over time it is likely also to incorporate other kinds of tech such as radio-wave scanning to identify items.
Khosla Ventures and Berlin's Almaz Capital co-led the round with the European Investment Bank, with past backers Hoxton Ventures, Capnamic Ventures, DN Capital and Manta Ray also participating.
Nomagic last raised funding — a seed round of $8.6 million — in February 2020; and in the interim, it's been a wild ride in the world of e-commerce.
Covid-19 led to a huge surge in online shopping, but also a reassessment of how people could work in warehouses under pandemic concerns and restrictions, and in some cases some serious reassessments of how operations were run, and a curtailing of investments to adjust to changing (and sometimes hard-hit) business conditions. Nomagic's technology plays into all of those developments in a variety of ways.
The most obvious of these is around digital transformation, where companies are adopting robotic hardware as part of a wider update of their systems and bringing on more automation. Nomagic cites data from Research and Markets and Mordor that estimates that the the global warehouse automation market will be worth $31 billion by 2025, and that the market for piece-picking robots specifically is growing at a rate of 62.5% and will be worth $2.9 billion by 2026.
Alongside that, there is an obvious opportunity for robots to work in environments where humans might not, either because the environment is unsuitable for them and to modern labor laws (eg, no lighting, small spaces, no heating or cooling, and long hours); or because companies cannot afford that labor. Although Nomagic is also building out some hardware components, today the company focuses the bulk of its R&D on software development, which Nowicki says means that ultimately the tech will be able to work across a wide range of hardware.
Given that much larger e-commerce giants like Amazon and Ocado are investing in their own robotics technology, building third-party services that can be adopted by smaller players will be essential to letting them continue to compete. Nowicki argues that this is not about putting humans out of work but letting them focus on less repetitive tasks robots cannot handle — a factor potentially even more important for smaller organizations, with smaller staff bases and resources, to consider. This is the opportunity that investors see, too.
“An increasing number of mundane tasks will be increasingly automated by robots over the coming years,” said Kanu Gulati, partner at Khosla Ventures in a statement. “We come in early to support companies building promising technologies that are bold and impactful like Nomagic and are excited by the momentum they have demonstrated with customers.”