Deal focus: Goldman embraces Japan robotics

The first point of contact at Goldman Sachs for Japan-based warehouse robot developer Rapyuta Robotics was the real estate investment team. An introduction was made by a local investor who was building logistics facilities and looking into automated solutions. From there, the company was referred to the corporate and growth equity team. That happened two-and-a-half years ago.

Goldman bided its time because, though Rapyuta had a pilot project, commercialisation was still some way off. Last week, it led a USD 51m Series C round, having become convinced that the product-market fit was right. It also helped that the company had signed up a large logistics player as an anchor customer.

Goldman was familiar with warehouse automation as a global theme. In January, the firm led a USD 335m Series D for US-based robotics player Exotec at a USD 2bn valuation. Meanwhile, much of the capital entering the space in Asia had focused on China rather than Japan, with Geek+ and Syrius Robotics among the recipients. But Rapyuta stood out by virtue of its flexibility.

Notably, the company specialises in brownfield logistics centres, where robots must work within the constraints imposed by legacy infrastructure. The specific racks and routes installed by the likes of Geek+ are best suited to greenfield developments; Rapyuta’s solution can be implemented on top of existing ramps and integrate itself into systems to improve efficiency.

“Japan is a large market with a lot of existing logistics facilities. And most of these facilities are operating at maximum capacity. Stopping lines or making layout changes can be very disruptive. It is difficult for them to introduce solutions that will require changing the infrastructure,” said Yu Itoki, an executive director at Goldman Sachs Asset Management.

Filling the gap

Japan’s e-commerce market is the third-largest globally with revenue reaching USD 128bn in 2021, according to ecommerceDB. Supply chains are becoming more complex as orders fall in size but increase in frequency and speed of fulfilment. However, there is a shortage of warehouse workers – the consequence of an ageing society and a regulatory push for better working conditions.

Rapyuta – founded in 2015 as a spinout from the Swiss Federal Institute of Technology (ETH Zurich) – represents the best and only option for brownfield automation. Its robots move between the warehouse aisles, collecting goods from human workers stationed in each zone. The company claims that customers have doubled productivity within five months of introducing its pick-assist solution.

Rapyuta received JPY 351m (USD 3m) in 2015 from SBI Investment, Cyberdyne, Fuji Creative, and VCube, AVCJ Research’s records show. SBI and Cyberdyne contributed a further JPY 1bn in 2016 and then Rapyuta raised approximately the same sum again from JMTC Capital, Sony Innovation Fund and Sumitomo Mitsui Trust in 2018. Mercuria Investment invested an undisclosed sum in 2020.

With Goldman’s support, the company is aiming to become a platform play. Established logistics providers control 90% of Japan’s warehouse management systems. Each has its own systems, which makes it hard for external providers to get access and integrate. As a result, a warehouse operator with several different kinds of robots must operate them manually.

Rapyuta wants to develop a cloud-based operating system – much like Android or iOS – that would enable robots to work together automatically. For example, if there are 10 robots on-site and one breaks down, the other nine will reconfigure themselves to assume the workload in the most efficient way. It is also expanding its product portfolio with an automated forklift in the works.

Goldman’s arrival may facilitate uptake. “We have extensive real estate investments in Japan including logistics centres, so we're able to leverage our knowledge and network in the space and create connections with warehouse owners and operators,” said Stephanie Hui, global co-head of growth equity at Goldman Sachs Asset Management.

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• Topics
• North Asia
• Expansion
• Technology
• Japan
• Logistics
• Goldman Sachs
• Growth capital