- The industrial supply chain is about to see a new wave of automation powered by intelligent robots and other devices, Shahin Farshchi, a partner with Lux Capital, told Business Insider.
- Companies that operate factories and warehouses or transport of goods will be widely adopting new technologies in the coming years to reduce labor costs and speed up operations, he said.
- Amazon’s purchase of Zoox — one of Lux’s portfolio companies — a part of this broader trend, Farshchi said.
- There’s going to be particular demand for automated systems that companies can easily incorporate into their existing factories and warehouses, he said.
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Shahin Farshchi thinks the industrial supply chain is about to see a rise of the robots.
The coming years will see a new wave of automation in factories and warehouses and at logistics companies, powered by intelligent machines, including a new generation of industrial robots and autonomous vehicles, Farshchi, a partner at Lux Capital, told Business Insider in a recent interview. Such intelligent automation is moving from being concepts under development to action items on corporate business plans, he said.
“Rather than it being a possibility, it’s imminent for a lot of them,” Farshchi said. “So incorporating automation has gone beyond something they can do or should do to something that they will do, and now it’s just a matter of finding the right partners.”
Looking back, Amazon’s purchase of warehouse robot maker Kiva Systems eight years ago was just the initial indication of the oncoming wave, he said. Shopify’s acquisition last year of warehouse automation company 6 River Systems and some of the recent large fundraising rounds by automation startups such as Covariant — one of Lux’s portfolio companies — are evidence that the wave is starting to gain power, he said.
To this point, only a few companies have invested heavily in advanced automation. But not too long ago, the same was true of cloud computing, software sold as a subscription-based service, and mobile applications, Farshchi said.
“Just like how we saw cloud and [software as a service] and mobile go from kind of niche to mainstream, automation is going to go from niche to mainstream,” he said.
Companies are developing technologies to make robots smarter
Many of the new companies in the industry are developing robots to speed up warehouse operations or the packing and shipping of goods. Covariant, for example, is working on artificial intelligence software that’s designed to help industrial robots discern particular items in a bin or on a conveyor belt to sort them or put them in boxes. 6 River Systems has developed a variety of devices, including an autonomous cart that can help workers collect goods in a warehouse and transport them to other areas for packing.
Lux has already been investing in the trend. In addition to Covariant, Farshchi’s firm has backed Veo Robotics, which is developing computer vision and sensing technology for industrial robots that would allow people to work safely side-by-side with them. It’s also invested in Aeva, which is working on a sensor for autonomous vehicles that would replace several separate sensors, including Lidar, radars, and cameras.
And the VC firm was an investor in Zoox, the self-driving car startup that Amazon has agreed to acquire. Observers speculate the ecommerce giant will eventually use Zoox’s technology in its logistics operations to help deliver goods to consumers.
Farshchi declined to talk in specifics about Zoox or Amazon’s agreement to acquire it, but said he sees that deal as part of this larger trend.
“These are representative of the broader automation movement and it becoming an inevitability,” he said.
There are still plenty of opportunities ahead, Farshchi said. There’s going to be demand for robots and other automated systems by industries that today require lots of labor or to replace jobs that have lots of turnover because few people want them, he said. Companies are also going to want technologies that they can integrate easily into their existing warehouses and factories, he said.
“I think the technology itself and the way it’s adapted and integrated is something that represents the larger opportunity for the next 10 years,” he said.
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