6 River Systems raises $15 million for e-commerce fulfillment robots

Warehouse robotics startup 6 River Systems Inc. has landed $15 million in venture backing from a group lead by Norwest Venture Partners and will use the funds to accelerate the rollout of its split-case picking system for warehouses handling a rising tide of e-commerce orders, the company said Wednesday.

The investment is the latest round of funding for Waltham, Mass.-based 6 River, which raised $6 million in 2016 from a group including iRobot Corp. Yesterday's funding announcement comes mostly from Palo Alto, Calif.-based Norwest, which will add Matthew Howard, its managing director, to the 6 River board. Additional funding came from Eclipse Ventures, which named Greg Reichow, a partner with the firm and former VP of operations at Tesla Motors, to join 6 River's board as well.

Founded by former executives of the old Kiva Systems LLC, which was acquired in 2012 by Seattle-based Amazon.com Inc., 6 River Systems' mobile platform for automated fulfillment operations—named "Chuck"—resembles a royal blue version of Amazon's orange warehouse bots. The 6 River system uses a different approach to fulfillment, however. Instead of flooding a warehouse with a large number of robots that ferry inventory back and forth to a central picking and packing station, 6 River Systems uses each Chuck robot to lead a human associate through a zone-based picking and replenishment workflow, the company said.

6 River Systems will use the new round of capital to hire engineers, hone its technology, and expand beyond its current installations at a half-dozen customer sites such as third party logistics providers (3PLs) and retail warehouses serving direct-to-consumer, retail-store replenishment, and service parts fulfillment operations, 6 River Systems co-founder Jerome Dubois said in a phone interview.

By collaborating with existing warehouse workers and avoiding the need for installing new infrastructure to support the autonomous robots, Chuck delivers a faster return on investment than traditional automated fulfillment systems, such as pick-to-light, voice technology, and conveyors, Dubois said.

"We're not targeting the Wal-Marts, Targets, Best Buys, or Staples, but the literally thousands of companies that have absolutely terrible choices when it comes to automating their fulfillment operations," said Dubois.

Many of these mid-sized companies are trying to grow from $20 million to $500 million in revenue, but they find that material handling options such as conveyors and shuttles require investments far beyond their budgets, he said. "These are companies growing at 50 percent to 500 percent per year, and until now they've had to pick between cart picking, outsourcing to a 3PL, or bolting in a bunch of steel and hoping it's still the right solution in five years," Dubois said.

Robotics has become an efficient way to meet the piece-picking needs of an industry under strain to meet booming e-commerce demands, Howard said in a phone interview. "We've become an on-demand society, whether you're ordering razor blades from a shave club or specialized e-commerce items like mattresses," Howard of Norwest said.

"In the '90s the rage was for just-in-time manufacturing, because no one wanted to maintain the inventory," said Howard. "Now we've become a just-in-time consumption economy, so there's a huge demand on e-commerce infrastructure, which requires an unbelievable ballet of extremely well-orchestrated action."