Symbotic Inc., a supply chain technology firm, is expanding its eight-year partnership with Walmart Inc. by acquiring the retailer’s advanced systems and robotics business for $200 million.
Alongside the acquisition, Walmart will invest $520 million in Symbotic’s artificial intelligence (AI)-powered robotics platform, a move meant to speed up and improve ecommerce fulfillment at its stores. By further automating its accelerated pickup and delivery systems (APDs), Walmart said it can reduce the time it takes to fulfill online orders and improve customer convenience, especially as demand grows for curbside pickup and home delivery.
Announced on Jan. 16, the moves mark a major step forward in the companies’ relationship. Massachusetts-based Symbotic, which has worked with Walmart since 2017 to automate its distribution centers, will now take control of Walmart’s automation business. The acquisition is valued at $200 million in cash at closing, with an additional $350 million in potential payments contingent on how many APDs Walmart orders, Symbotic said in its announcement.
Why Walmart’s robotics transaction with Symbotic is ‘highly strategic’
Coinciding with the acquisition, Walmart is investing in a development program with Symbotic. The program will allow Symbotic to design, build, and deploy systems to accelerate online pickup and delivery services at stores, as well as design new systems, the companies said.
If performance targets are met, Walmart plans to purchase and deploy systems for 400 APD centers at stores over a multi-year period, with the option to add more in the future.
Associated with the development program, Walmart will pay Symbotic $520 million, including $230 million at closing, per the announcement.
“This is a highly strategic transaction for Symbotic as we expand upon our long-term relationship with Walmart and broaden our product offering beyond the traditional warehouse to ecommerce settings for last-mile delivery,” said Rick Cohen, Symbotic’s chairman and CEO, in the announcement.
Symbotic expands automation expertise
Founded in 2007, Symbotic said it focuses on streamlining the supply chain with its end-to-end AI-powered robotics and software platform for industries like retail, wholesale, and food and beverage. According to the company, it leverages advanced technology, high-density storage, and machine learning to address challenges in the supply chain.
Symbotic has played a major role in automating Walmart’s supply chain since 2017. The company said it is currently deploying its software and robotics platform across all 42 of Walmart’s regional distribution centers in the U.S.
Bringing its technology to Walmart’s APD systems is “a natural extension of this work,” Symbotic said, helping Walmart fulfill ecommerce orders at stores more efficiently and economically.
By further automating APDs, Walmart can reduce the time it takes to fulfill online orders and improve customer convenience, especially as demand grows for curbside pickup and home delivery.
According to the companies, approximately 90% of the U.S. population lives within 10 miles of Walmart’s more than 4,600 stores. In its fiscal quarter ended Oct. 31, 2024, Walmart’s store-fulfilled deliveries grew nearly 50% year over year, surpassing a $2.5 billion monthly run rate, it said.
Transaction outlook and market expansion
“We anticipate the synergy between Symbotic’s expertise and our nearly decade-long relationship in innovating the supply chain technologies to elevate customer service and rapidly advance our in-store Accelerated Pickup and Delivery capabilities,” said Greg Cathey, senior vice president of transformation and innovation at Walmart, in a statement.
Notably, the acquisition adds a micro-fulfillment solution to Symbotic’s portfolio, according to Brittain Ladd, a supply chain consultant and former Amazon executive. In 2022, Walmart acquired Alert Innovation — later renamed Walmart Advanced Systems & Robotics — for $400 million to implement micro-fulfillment centers in select stores, Ladd wrote in a LinkedIn post.
Symbotic said adding the micro-fulfillment solution expands its addressable market by more than $300 billion in the U.S. alone.
The companies said they expect the acquisition to close in Symbotic’s second fiscal quarter of 2025. Symbotic noted that the transaction and associated agreements could increase its project backlog by more than $5 billion.
Competitive pressures from Amazon
Amazon is also ramping up investments in automation. According to Ladd, the company has developed its own automated micro-fulfillment system (MFC) alongside other robotic technologies to accelerate online order fulfillment. Amazon plans to deploy its MFC in a 250,000-square-foot supercenter, set to open in late 2025 or early 2026, he said.
“There is a new arms race in business,” Ladd wrote. “Walmart and Amazon are investing billions to use automation as a way to disrupt their competitors, reduce their logistics costs, and achieve a competitive advantage.”
Walmart and Amazon rank No. 2 and No. 1, respectively, in the Top 1000 Database, Digital Commerce 360’s ranking of the largest North American online retailers by web sales. They both fall under the Mass Merchant category in the database.
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