Amazon continues to be the "300-pound gorilla in the hallway" for companies in the retail sector. Today, a startup called Fabric, which is creating technology to help other retailers, large and small, compete more effectively with Amazon, particularly in the delivery of goods using advanced robotics. It's a big round with a big valuation - more than $1 billion, Fabric says. The round highlights both the demand in the market and the opportunity to challenge Amazon.
"Right now we already have more demand than we can meet," Elram Goren, CEO and co-founder of Fabric, said in an interview. "At the same time, we see great opportunities beyond the supply side, beyond our micro-fulfillment centers, as they interact in the network and supply chain."
Singapore-based Temasek Fund, which participated in Fabric's $110 million Series B financing in 2019, led Series C, which also included Koch Disruptive Technologies, Union Tech Ventures, Harel Insurance & Finance, Pontifax Global Food and Agriculture Technology Fund (Pontifax AgTech), Canada Pension Plan Investment Board (CPP Investments), KSH Capital, Princeville Capital, Wharton Equity Ventures and others. To date, the company has raised $336 million.
Fabric's clients now include Walmart, Instacart and FreshDirect. The company said the funding will be used both to further the grocery sector, including helping it create its own "marketplaces," and to introduce its micro-delivery technology to other types of e-commerce retailers by expanding its network in the United States (where it is now based, in New York) and Israel (where it originally started), and soon into other markets.
"Essentially, we're using the same technology stack for both grocery and e-commerce," the company's CEO said in an interview. This was done in part for practicality reasons. When Fabric started in 2015, he said, most of the company's efforts were focused on groceries because e-commerce integration was very low, at about 1%. Now it's at 10%, he added, and it's a $1 trillion market;
E-commerce has been growing rapidly for decades, but the trend has accelerated dramatically in the past two years, not least because of COVID-19 and the scary effect it has had on retail. Citing data from consulting firm McKinsey, Analysts notes that as early as 2020, 35% e-commerce penetration (i.e., sales made online) was double what it was a year earlier (16% in 2019), with most of that growth occurring in just a few months (this is growth that was made in the 10 years before COVID-19).
Fabric is competing with other startups creating fulfillment technology to improve logistics processes, such as ShipBob, Byrd and parcelLab, all of which have raised money this year. These new players, in turn, are looking to get into a business still dominated by a wide range of third-party logistics and service providers (known as 3PLs) - suppliers in a fragmented and in some respects quite similar market relying on warehouses and work crews; and, of course, Amazon, which provides services to hundreds of thousands of third-party sellers through its fulfillment program.
Fabric's robotic solution is a key differentiator on this front. The company has created a vertically integrated set of hardware and software that can be deployed in the customer's own warehouses or directly in-house.
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"Right now we already have more demand than we can meet," Elram Goren, CEO and co-founder of Fabric, said in an interview. "At the same time, we see great opportunities beyond the supply side, beyond our micro-fulfillment centers, as they interact in the network and supply chain."
Singapore-based Temasek Fund, which participated in Fabric's $110 million Series B financing in 2019, led Series C, which also included Koch Disruptive Technologies, Union Tech Ventures, Harel Insurance & Finance, Pontifax Global Food and Agriculture Technology Fund (Pontifax AgTech), Canada Pension Plan Investment Board (CPP Investments), KSH Capital, Princeville Capital, Wharton Equity Ventures and others. To date, the company has raised $336 million.
Fabric's clients now include Walmart, Instacart and FreshDirect. The company said the funding will be used both to further the grocery sector, including helping it create its own "marketplaces," and to introduce its micro-delivery technology to other types of e-commerce retailers by expanding its network in the United States (where it is now based, in New York) and Israel (where it originally started), and soon into other markets.
"Essentially, we're using the same technology stack for both grocery and e-commerce," the company's CEO said in an interview. This was done in part for practicality reasons. When Fabric started in 2015, he said, most of the company's efforts were focused on groceries because e-commerce integration was very low, at about 1%. Now it's at 10%, he added, and it's a $1 trillion market;
E-commerce has been growing rapidly for decades, but the trend has accelerated dramatically in the past two years, not least because of COVID-19 and the scary effect it has had on retail. Citing data from consulting firm McKinsey, Analysts notes that as early as 2020, 35% e-commerce penetration (i.e., sales made online) was double what it was a year earlier (16% in 2019), with most of that growth occurring in just a few months (this is growth that was made in the 10 years before COVID-19).
Fabric is competing with other startups creating fulfillment technology to improve logistics processes, such as ShipBob, Byrd and parcelLab, all of which have raised money this year. These new players, in turn, are looking to get into a business still dominated by a wide range of third-party logistics and service providers (known as 3PLs) - suppliers in a fragmented and in some respects quite similar market relying on warehouses and work crews; and, of course, Amazon, which provides services to hundreds of thousands of third-party sellers through its fulfillment program.
Fabric's robotic solution is a key differentiator on this front. The company has created a vertically integrated set of hardware and software that can be deployed in the customer's own warehouses or directly in-house.
read more here*