Symbotic’s Rick Cohen at the company’s test center in Massachusetts.
Michael Prince for Forbes
Rick Cohen’s warehouse robotics firm Symbotic has expanded its partnership with Walmart to all 42 of the retailing giant’s regional distribution centers. The deal officially ups the number of Walmart warehouses that Symbotic will outfit from 25.
The expanded Walmart partnership is a huge win for Wilmington, Massachusetts-based Symbotic and for Cohen, the owner and executive chairman of C&S Wholesale Grocers, the nation’s largest grocery wholesaler with $25 billion in revenue. Cohen started Symbotic 15 years ago to build automation that could help his own logistics issues at C&S, funding it with his own cash.
While Cohen built Symbotic largely in stealth, the company, which posted $252 million in revenue for fiscal 2021, is now in the process of going public in a $5.5 billion deal with a special purpose acquisition company, or SPAC, sponsored by venture capital giant SoftBank. In March, Symbotic named Michael Loparco, who had been executive vice president and CEO of electronics manufacturing services at Jabil, as its CEO. “When I realized that Walmart was going ahead, along with the interest we had from other customers, then I sat back and said, ‘I’m interested in developing the product, which is what I’ve always loved,” Cohen said of his decision to step aside as CEO.
The scale of Symbotic’s automation is hard to grasp. In a large-scale warehouse, more than 400 of Symbotic’s autonomous bots—or even potentially more than 1,000—could zip up and down ten levels of narrow aisles completing more than 30 transactions per hour. “It’s a big Rubik’s cube—a big Tetris game is what we call it,” Cohen told Forbes last year. “It’s the miniaturization of the warehouse.” Forbes estimates Cohen and his wife Jan’s wealth at $6 billion, the majority of it coming from Symbotic rather than C&S.
The expanded Walmart deal comes as warehouse logistics have been in the spotlight, as consumers demand ever faster shipments of e-commerce orders and stores, too, need speed and reliability to stock their shelves. Symbotic’s ability to build palletized loads of sorted inventory can help Walmart (revenue $573 billion) get products to its more than 4,700 stores quickly. Joe Metzger, executive vice president of supply chain operations at Walmart U.S., has called the Symbotic technology “a game changer.”
Switching over the warehouses to the new technology takes time, however, and Walmart and Symbotic expect the complete retrofitting to take more than eight years. “The need for accuracy and speed in the supply chain has never been more visible, and we’re confident that now is the time to move even faster by scaling Symbotic’s technology to our entire regional distribution center network,” Walmart’s senior vice president of innovation and automation David Guggina said in a statement.
Walmart will retrofit all 42 of its regional distribution centers with Symbotic’s robotics over the next eight-plus years.
In addition to Walmart, Symbotic’s customers include Albertsons and Target, as well as Cohen’s own C&S. Its revenue increased to $173 million for the six months ended March 26, up sixfold from the $29 million it reported in the same period the previous year. The company posted a $53 million net loss in that period and a $122 million net loss for the 2021 year, according to SVF 3’s latest registration statement. Symbotic’s backlog of committed sales is now more than $11 billion. “I think we can sell everything we can make,” Cohen said.
Symbotic is expected to begin trading on Nasdaq under the ticker SYM. The SPAC, known as SVF Investment Corp. 3, is slated to hold a virtual special meeting on the deal on June 3. While the market has turned down, Cohen is thinking long-term. “The market is what the market is,” he said. “For me, it wasn’t a one-day stock deal. It’s where we are three, four-five years from now where the real value will be. We might as well get on with it.”
For more on Symbotic, see our December 2021 profile of Rick Cohen, “Meet The Billionaire Robot Overload Reinventing Walmart’s Warehouses.”
This post has been updated on March 24 at 3:15pm to include comments from Rick Cohen.
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