GreyOrange, an India and Singapore-based materials handling startup, received $30 million in equity funding to ramp up production of their Butler shelves-to-picker robot system.
GreyOrange currently has 300+ employees which it plans to double with this new funding. They have two products: a package sorter and Butler.
Butler is a square version of the circular orange-colored robotic system that Amazon acquired from Kiva Systems in 2012. The Kiva process had proven invaluable in speeding up bringing goods from the warehouse, dynamically storing goods for the best access, and to shuttle goods to the pick and pack work stations — all reasons why Amazon evaluated and then purchased Kiva for their internal use. The Butler version purports to do the same set of tasks and GreyOrange’s list of clients are distribution center-based and include Flipkart, the Indian version of Amazon, Amazon India, and Delhivery, an integrator and provider of distribution center systems all over India.
Two questions come to mind about the GreyOrange funding:
- why was it needed?
- and does their technology infringe upon Kiva’s and Amazon’s?
Kiva Systems and Universal Robots were and are still two stars in robotics. They both sold for phenomenal amounts and they were both predominantly funded from their rapidly growing sales.
- Kiva Systems, which sold to Amazon for $775 million in 2012, previously had received $18.1 million in three rounds of funding. An ex-Kiva employee said, “it was simply growth: new customers provided partial payments for their systems upfront, and that was used to grow the company. As long as you are growing quickly, you can actually have positive cash-flow.  Eventually profits kick in.”
- Universal Robots was initially funded by a Danish semi-governmental group but subsequently was self-funded in a similar manner to Kiva up until they sold to Teradyne for $350 million earlier this year.
Farhad Manjoo wrote in the NY Times recently about the propensity of startups to stay private. He cited executives not wanting to give up control nor be regularly scrutinized by those that don’t really understand the business. This trend is causing valuations to differ for privately held versus publicly held companies (privately held valuations are higher). It is also causing public investors to miss out on the successful companies in this new growth industry.
In John Markoff’s new book Machines of Loving Grace he describes the principle on which the Kiva system was developed:
Kiva Systems had the insight that the most difficult functions to automate in the modern warehouse were ones that required human eyes and hands, like identifying and grasping objects. Without perception and dexterity, robotic systems are limited to the most repetitive jobs, and so Kiva took the obvious intermediate step and built mobile robots that carried items to stationary human workers. Once machine perception and robotic hands become better and cheaper, humans could disappear entirely.
Finally, a word about IP (intellectual property, e.g., patents and copyrights). GreyOrange has to be on Amazon’s radar for possible IP infringement. I am presuming that GreyOrange has vetted their IP versus Kiva/Amazon and concluded that they are unique enough to not cause legal problems.
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