Congratulations to 6 River Systems on Joining Shopify: A Clear Sign that the Robotics Market Is Accelerating!
It was just last year that we announced our investment in 6 River Systems. Today, we’re celebrating the news that Shopify is acquiring them for $450 million. The team at Menlo is proud to have been involved in the 6RS journey and their mission to bring automation and robotics to every company’s fulfillment process. It was a pleasure working with two great founders, Jerome Dubois and Rylan Hamilton. Their deep domain experience and operational rigor quickly made 6RS the market leader! As excited as I am for them to accelerate their vision with a great partner like Shopify, there are always mixed emotions when a company exits, especially one with so much upside and impact ahead.
If the news of this acquisition or strategic fit comes as a surprise to you, the stage was set in June, when Shopify announced their plans to build a fulfillment network. Given Amazon’s dominance in e-commerce, it’s a smart play for Shopify. Shopify can now go beyond software infrastructure and addresses another critical level of competition for an e-tailer: logistics and fulfillment. This will help level the playing field for merchants of all sizes.
Amazon built an incredible business by making fulfillment central to its “value prop.” They promise speed, low cost, and efficient delivery. Helping deliver that efficiency is Kiva Robotics, the centerpiece robotics technology in most of their warehouses. The 2012 acquisition of Kiva was highly strategic as it allowed Amazon to be incredibly efficient and provided a competitive advantage in fulfillment. Kiva’s technology is not available to the rest of the market; long-tail merchants, in particular, are left without technology advantages. 6RS was created to fill that void. They recognized that the non-Amazon world of merchants needs automation to keep up with increased competition and customer expectations. Both 6RS founders, Jerome and Rylan, had worked at Kiva, spending time mostly with customers and implementing large robotic systems that transformed warehouses from the ground up. With 6RS, their innovation was not to redesign warehouses around the technology, but to create a model where robots complement humans, seamlessly working in existing warehouse environments. This opened the market to 3PL’s (third-party logistics companies) and other merchants struggling with labor shortages, turnover, and demands for increased efficiency and intelligence in their supply chain. 6RS got off to a fast start, attracted many name brand customers and was demonstrating significant innovation, including doubling productivity. It was exciting to watch them grow and validate the power of robotics that will come to so many industries in the coming years.
Shopify launched their fulfillment network with a similar vision: They promised to make the fulfillment systems and technology previously reserved for the world’s largest companies accessible and affordable to every merchant, even those at an early stage. To do that well, at scale, requires automation. That’s where 6RS comes in. The opportunity for 6RS technology to impact such a substantial customer base immediately was compelling to Jerome and Rylan. The acquisition certainly validates the importance of what they built.
This acquisition is a sign that the market is accelerating and in fact, we’re on the cusp of a golden age of robotics. But it’s still early days. As a category, “logistics and warehousing” was the lowest hanging fruit for automation but it’s a great example of a sector quickly transformed by automation. we expect many more robotics companies to break out across a variety of sectors. Near-term solutions will integrate into most industries alongside humans, bringing new efficiency to farming, medicine, construction, home delivery, food prep, et al. As an active investor in robotics, (our portfolio includes 6 River Systems, RightHand Robotics, Roam Robotics, and Flirtey) we’ve been fortunate to see compelling companies in each of these categories and expect to make several more investments. Finding the next 6 River won’t be easy, but the enormous potential for robotics to bring positive transformation to so many industries will increasingly attract some of the brightest and boldest entrepreneurs and we’re anxious to meet you!
For more on our investments in robotics and “smart supply chain” see: