As evidenced by recent layoffs and proportionate back expansion, on-demand delivery is a challenging area. Brands, retailers and operators push to deliver with greater efficiency, a strategy that has led to the growth of “dark stores” over the past several years. A dark store, also known as a micro-fulfillment center, is a small, local store where customers are not present, where employees pick orders from shelves and racks for online delivery.
On-demand delivery startups like Gethir and Gopuff run hundreds of dark stores in the cities they serve—one analysis suggests there will be 45,000 dark stores by 2030. But storefronts slow delivery times, skyrocket rents and staffing requirements make them expensive to maintain — eating into revenue.
Eyal Yair offers an alternative idea in the robot “nano-end” centers. He is the co-founder and CEO of 1Mrobotics, which takes an automation-first approach to rapidly deploying dark repositories. The company today raised $16.5 million in Series A funding from EBEX investors with participation from Emerge VC, Target Global and INT3, as well as collaborations with brands including Nespresso, AB InBev and REEF Technology.
The Series A brings 1Mrobotics’ total to $25 million, including a previously undisclosed $8.5 million seed round.
“The pandemic has completely pushed ecommerce sales, shopping habits and consumer behavior to the next level – this new regulation requires a new kind of infrastructure to support fast delivery operations globally,” Yair told TechCrunch in an email interview. Prior to co-founding 1Mrobotics with Roy Tuval, Yair led and sold two ventures – CartCrunch and Netonomy – focused on grocery e-commerce and cybersecurity, respectively.
“Handmade dark stores just don’t cut it. [1MRobotics] It serves as a clear incentive to implement complementary technology,” he continues with a bombshell. “1Mrobotics does something magical: enabling a hyperlocal, fully automated fulfillment network that is better at service levels, much better for ESG and less expensive than regional next-day fulfillment solutions. This product distribution is sacred.”
Yair’s 1Mrobotics platform — a small warehouse of robots that takes orders — can be installed anywhere and doesn’t require regular maintenance, ideally eliminating some delivery logistics. Using AI, the system learns patterns of supply and demand that appear in the order flow of items stored in the warehouse, Yair says, and in turn “optimizes” the inventory.
The model, which has raised more than $300 million in more than $1 billion for small-end robotics technology, is no match for the factory. Other rivals include Attabotics, Nimble Robotics and better players like AutoStore (which went public last October), UK-based grocery fulfillment tech firm Ocado Group and Noise Technologies.
It’s a cutting edge industry. In July, Fabric cut 40% of its workforce as it transitioned from a service provider to a platform. Implicit in the shift was the recognition that on-demand delivery was coming down from the peak of the epidemic; According to a recent study from Rensselaer Polytechnic Institute, more than 90% of people who used online delivery during the pandemic may go back to the original way of shopping.
Yair 1Mrobotics is believed to be “significantly” more advanced than most with “state-of-the-art” robotics technology that has been identified and is poised to grow. The jury is out, but the company’s early traction suggests there may be something to those claims.
One point in 1Mrobotics’ favor is that investors — and customers — are still relatively bullish about transportation and logistics tech companies. The logistics startup attracted huge VC funding in 2021, raising more than $27.5 billion. Meanwhile, big-name brands are doubling down on performance automation, such as Walmart announcing that it will bring robotics to 25 regional distribution centers.
“The next decade will be marked by consumers continuing to demand convenience, expecting retailers and brands to deliver their favorite products faster and faster. “This is where 1Mrobotics comes in—providing ‘plug-and-play’ full automation for last-mile fulfillment on any category, reducing cost and associated environmental impact. The future of business is moving toward a fully automated network of distributed and distributed nanofill sites,” Gitter said in an email. We believe it is – that’s what 1Mrobotics enables.