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Locus Robotics recently acquired Waypoint Robotics. This is going to be a great combination of compatible technologies, market focus and skillset/personalities. Here’s why.
Locus Robotics has built a reputation as one of the leaders in the warehouse automation space. The company has raised $305M since its founding in 2014. The company is one of the first Autonomous Mobile Robots (AMR) unicorns with a valuation over $1B. Locus recently celebrated a half-a-billion picks using the company’s Locusbots, proof that customers value the Locus solution.
Locus has developed a fleet management and order management software stack to manage the warehouse workflow of both human associates and LocusBots. Leveraging artificial intelligence, the system decides how to organize the warehouse operations each day and then assign the robots to help the human associates in an optimized picking order. Locus has its roots in E-commerce, so it understands how to optimize inventory workflow through the warehouse.
The unseen part of the Locus Robotics software stack is its remote operations center (ROC) software. This is the layer of software utilized by the Locus support and customer success teams to monitor, troubleshoot, update and support the robots on the floor – remotely.
RaaS Business Model
Locus Robotics is also one of the market leaders in commercializing the Robotics-as-a-Service (RaaS) business model. In accordance with the RaaS business model, clients pay for the service delivered by the solution, instead of paying to acquire a capital asset, and then amortizing/depreciating the cost of that asset.
For Locus’ customers, leveraging a RaaS economic model means they can pay for the automation service out of operating expense budgets, instead of capital expense budgets. But, it also has the side benefit for customers of reducing risk of deploying a new technology. It is easy to remove the solution if it doesn’t work.
From this simple idea, Locus has built a very healthy business and a committed customer base. However, RaaS is not ideal for every application. To be a successful RaaS solution, the operation requires three success factors:
- The problem must be scalable.
- The Service Level Agreement (SLA) must be measurable and funded by an operating expense.
- Output must be guaranteed – i.e. there has to be strong commitment from the vendor to identify, intercept and prevent failures from happening.
The business model for RaaS is simple. Customers pay a monthly, quarterly or yearly fee, based on the amount of work done by a Locus robot. We do not know exactly what Locus’ installed robot population looks like, nor what the average contract cost is. However, Table 1 outlines three possible yearly revenue outcomes based on the population of 5,000 robots and an average cost per hour, single shift contract between $5-$9/hour.
The biggest advantage of a RaaS company like Locus, is that it has access to how solutions are operating in the field, every hour of every day, for every customer. Aggregating this data, Locus product managers have the ability to see trends and to prioritize the product enhancements that will have immediate and wide ranging impact. It’s a product manager’s dream scenario. If certain elements of the robot are failing prematurely, they will know about it and can react preemptively to maintain customer satisfaction.
The Waypoint Journey
Waypoint Robotics has built a reputation for well-engineered AMR solutions. You might call it a “roboticist’s robotics” company. The company’s AMR solution was built to be a mobile platform that can be used for any number of industrial and commercial applications.
Up to this point, the company has only sold its solutions utilizing a classic capital expenditure business model. Waypoint clients buy the AMRs and own them. This enables the client to customize the payload on the AMR and to deploy it into any application it chooses.
Since its inception, Waypoint has focused on omnidirectional motion as the basis and differentiator for its solutions. This fundamental design decision has both advantages and disadvantages in terms of the types of applications and work environments that the robot operate in.
The Waypoint AMRs, Vector and MAV3K, both use mecanum wheels to achieve omnidirectional motion. Mecanum wheels have the advantage of being able to easily move the platform in any direction without additional rotation or jogging. The downsides of mecanum wheels however, are fundamental:
- Mecanum wheels slip as they turn. This complicates odometry, localization and accuracy. All of this can be compensated for with control software and the use of sensor fusion to maintain localization.
- Mecanum wheels wear quickly. This is a preventative maintenance issue, but uneven wear can impact drive performance in unexpected ways.
- Mecanum wheels do not operate well in wet or oily conditions.
- Mecanum wheels/drives are the most expensive locomotion option for an AMR.
Waypoint has found success in many manufacturing applications such as work-in-process handling, tray handling, machine tending and finished goods movement.
On the positive side, omnidirectional motion for an AMR is desirable when there are tight aisles to navigate, or when approach paths to a “waypoint” are limited. A good use for an omnidirectional AMR is in machine tending with a mobile manipulator, and Waypoint has a number of AMRs in production for customers.
On most shop floors, there often little floor space available in front of operating machines. This makes it difficult for other styles of AMRs to approach them.
As a result of their mecanum wheels design choices, Waypoint has found success in many manufacturing applications such as work-in-process handling, tray handling, machine tending and finished goods movement. In addition, Waypoint also has a heavy payload platform with the MAV3K AMR (3000 lb. payload capacity). The MAV3K can handle fully loaded pallets or it can be a mobile assembly base for large items such as appliances, or car/aviation parts.
A Compatible Union
When you put both companies side by side, it is easy to see why this is going to be a compatible and effective union. Currently, there is little to no overlap in the products and markets served. Yet, there are immediate opportunities for greenfield sales of the Waypoint product line into the existing (and future) Locus customer base.
The immediate opportunity is bring the MAV3K AMR (heavy payload) under the supervision of the Locus fleet management solution and deploy it into one of two possible warehouse workflows:
- Add the Locus UI to the MAV3K and deploy it into heavy payload person-to-goods warehouses. In this scenario, the MAV3K becomes a “LocusBot3K” that wil allow an associate to pull items from inventory that are too heavy for the current LocusBot model.
- Deploy the MAV3K into new warehouse workflows, moving heavy mixed load or unit load pallets around the warehouse, including to/from the shipping dock.
With the integration of Waypoint AMRs and Locus Robotics’ software, other intralogistics workflows become possible. Both solutions are built on top of the ROS software stack.
According to Jason Walker, CEO and co-founder of Waypoint, the company will continue to sell Waypoint solutions into the manufacturing market. The company has well established customers within the manufacturing sector. The added credibility of being a part of the Locus Robotics family should help reduce the barriers to acceptance, diminish the risk for new clients, and shorten sales cycles.
Both organizations have strong ties to the Boston robotics community and to MassRobotics, a innovation hub and laboratory for robotics startups.
How Locus and Waypoint will combine their sales and support teams has yet to be determined. This is where a clash of cultures and processes between a RaaS-based sales model and a capital equipment sales model may pose some difficulties. It will be interesting to watch what type of hybrid selling and support model emerges from this union.
One thing is clear, the companies should have a nice fit of corporate cultures since they are both based in the Northeast – in fact the current corporate headquarters are a 40-minute drive from each other. Both organizations have strong ties to the Boston robotics community and to MassRobotics, a innovation hub and laboratory for robotics startups. This was likely a key factor in both the introduction of the companies as well as the potential for a successful integration.
A Hot Market
It would be easy to view this acquisition as an obvious winner. There has been an uptick in both mobile robotics company investment as well as acquisitions in the past five years.
Are there other acquisitions on the horizon? That’s an easy YES. There are a number of undervalued robotics related companies. This includes both AMR suppliers, as well as peripheral, sensor and software suppliers.
Within the warehousing space, there are still a number of warehouse management software (WMS) providers that are currently software-only solutions. The core of Locus technology is, after all, its WMS. There are a number of WMS competitors on the market who could make a similar play; pick up a stand alone AMR company, and fully integrate it into its workflow.
Similarly, as we witnessed earlier this year with the acquisition of Fetch by Zebra Systems, there are any number of warehouse component suppliers who might want a bigger piece of the warehouse systems play.
Finally, there a number of robotic-based warehouse inventory counting solutions, including companies like Ware Robotics, that are one more piece of the puzzle. Any one of these technologies/companies might be a likely acquisition for Locus or other warehouse solution leaders in the future.
About the Author
Mike Oitzman is Editor of WTWH’s Robotics Group and founder of the Mobile Robot Guide. Oitzman is a robotics industry veteran with 25-plus years of experience at various high-tech companies in the roles of marketing, sales and product management. He can be reached at moitzman[AT]wtwhmedia.com.
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