Venture capital funding is no proof of a startup’s success, but it is a pretty good gauge of its promise. Automation startup GreyOrange has raised funding four times in its eight years of existence. The most recent was last September when it raised $140 million in Series C funding at a reported valuation of $400 million to $500 million.

Blume Ventures, an early-stage VC firm that backs tech startups, has invested in all these rounds. “Even when the original fund’s reserves were exhausted, we requested our LPs [limited partners] for additional capital to be able to continue investing our pro-rata share of the larger rounds,” says Karthik Reddy, managing partner at Blume Ventures. The Mumbai-based VC firm’s total investment in GreyOrange is $10 million.

Now, there are two things of note here. One, the size of the latest funding, which is four times the total amount raised in the preceding rounds. Two, consistent backing from VC firms such as Blume Ventures. No surprise there though. GreyOrange has become one of the hottest names on the global warehouse automation and robotics circuit. Robots built by the company, founded by BITS Pilani alumni Samay Kohli and Akash Gupta, are deployed in over 70 client sites across India, Japan, Europe, Latin America, and the U.S., helping improve efficiency and save time. GreyOrange’s clientele includes India’s largest e-commerce retailer Flipkart (co-founder Binny Bansal is an investor); fashion portal Myntra; furniture retailer Pepperfry; Mahindra Tractors; courier-services companies DTDC and Dubai-based Aramex; Chilean home-improvement retailer Sodimac; state-owned postal company Pos Indonesia; Hong Kong-based Kerry Logistics; and Singapore-based logistics firm Ninja Van. The artificial intelligence (AI)-enabled robots are made in India, China, and the U.S.

GreyOrange’s backers believe big things are in store for it. Ajay Royan of Mithril Capital, which led the latest funding round, points out that the global logistics and automation market is expected to exceed $125 billion within the next seven years. “And we see GreyOrange uniquely positioned to capitalise on that expansion,” says Royan, who founded Mithril Capital along with early Facebook investor Peter Thiel. “This is a game changer in an industry that has had very little disruption in the past decade.”

Samay Kohli, Group CEO and co-founder of GreyOrange
Samay Kohli, Group CEO and co-founder of GreyOrange
Image : Photo Courtesy: GreyOrange
In the last five years we were focussing on how to tap into global markets and establish our base outside India. Every quarter, we were adding a new city globally.
Samay Kohli, chief executive officer, GreyOrange 

In anticipation of the market opportunity, GreyOrange has been gearing up. A few years ago, it moved base to Singapore from Gurugram. In the startup world, it is common knowledge that many Indian startups register in Singapore despite operating in India to avoid tax woes and benefit from Singapore’s business-friendly policies and other incentives for foreign investors. Kohli, the 33-year-old CEO of GreyOrange, says in its case it has more to do with operational flexibility: Singapore gives it better access to the Asia-Pacific region. “In the last five years, we were focussing on how to tap into global markets and establish our base outside India. Every quarter, we were adding a new city globally,” says Kohli. Today, only 10% of the company’s revenue comes from India while the rest comes from Japan, the U.S., and Western Europe.

Sorter system of GreyOrange
Sorter system of GreyOrange
Image : GreyOrange

Last year, GreyOrange set up its U.S. head - quarters in Atlanta, Georgia, to serve its key market better. The reason: Atlanta is one of the key transportation hubs with a large base of leading supply chain and logistics providers. It has also set up an R&D unit in Boston that would manufacture robots and warehouse au - tomation systems. Boston is home to top edu - cational institutes that focus on science and technology such as the Massachusetts Institute of Technology (MIT). In the next 12 months, GreyOrange plans to hire 50 engineers for its R&D centre in Boston. It is a well-planned move for a company that anchors its products on machine learning, AI, and data intelligence. About 50% of its workforce is involved in R&D. Even those involved in operations, sales, and marketing have an engineering degree or some background in new tech.

The company today has close to 600 people across offices in India, Japan, Singapore, Germany and the U.S., and its R&D centres in Gurugram and Boston. Much of its prototyping happens in China’s Shenzhen, the world’s go-to place for top-notch hardware. Gupta, 30, chief technology officer of GreyOrange, says it is important to leverage talent pools and ecosystems in different parts of the world to meet market and customer expectations. “We took a conscious decision that if we want to be a global company, the workforce has to be global as well,” he says.

Butler PickPal of GreyOrange.
Butler PickPal of GreyOrange.
Image : GreyOrange

Though GreyOrange’s approach to R&D is melding inputs of its teams across all units, it prefers operations managed locally. “Our products are driven through a global R&D team. But we wanted our operations to be local,” explains Kohli. Last year, the company appointed Chris Barber as regional CEO, North America. Barber was previously vice president of southern operations at Honeywell Intelligrated. “We operate in a regional profit and loss (P&L) model. Hiring a regional CEO for the North American market was critical,” says Kohli. This August, GreyOrange reiterated its global scaling plans by hiring Jeff Cashman as global COO and senior vice president. Cashman, who was CEO of e-commerce service provider Ally Commerce, packs 30 years of experience in supply chain technology and has had stints with Accenture’s supply chain strategy practice. He will be responsible for shaping strategies for widening customer base, market penetration, revenue growth, marketing, solution delivery, and customer success.

Folks who know their startup history would know big ideas that took off in India trace their origins to the West. For instance, Flipkart (Amazon), or Ola (Uber). Raju Reddy, a U.S.-based angel investor, says the story is a bit different with GreyOrange. “It is rare for an Indian-origin hardware startup to build high-tech products which require not just software expertise but hardware, electrical and mechanical engineering for a global market. This business is not imitating some Western idea. It shows significant competence,” says Raju Reddy. He was among those who invested $500,000 in GreyOrange’s first round of funding in December 2012, a year after it launched in 2011. Blume Ventures and BITS Spark (an angel network of BITS, Pilani alumni) were the other investors.

Raju Reddy, who sits on the board at GreyOrange, can vouch for the duo’s competence. He has known them since their college days. Both were part of Team AcYut at the Centre for Robotics & Intelligent Systems at BITS Pilani. The team builds humanoid robots which are showcased in prestigious platforms such as RoboGames, the largest robot competition in the U.S. and a mecca for robotics geeks. Kohli was part of Team AcYut in 2007 when it built the first series of humanoid robots in India. At the RoboGames that year, the team finished sixth. In 2008, the team progressed to the third spot and the next year, when Gupta was a team member, struck gold. That same year the duo began interning at surveying and mapping firm C&C Technologies in Louisiana. In their spare time, Kohli and Gupta worked on a haunted ride spread over 400 sq. ft. in CEO Thomas Chance’s house for Halloween. The project took six months.

In the following years, Kohli and Gupta became known figures in robotics and began getting invitations to teach and share ideas at workshops. In February 2011, they started GreyOrange as a robotics-education company with `5 lakh from savings from their internship days in the U.S. By the end of that year, they shifted tack. “We decided that we will bank on our product expertise and build a business model on that knowledge,” says Kohli. The duo began by making products for other companies. Then they felt they needed to narrow down on an industry for which they would design solutions. This was the time when e-commerce was gathering pace in India. Kohli and Gupta observed that online marketplaces, flush with funds, needed robots and automated systems to ensure timely customer fulfilment. Karthik Reddy of Blume Ventures says more than anything else, it is Kohli and Gupta’s vision of using this opportunity that has kept the VC firm invested in GreyOrange. “There was an incredible sense of passion in both founders to build an IPO-able company from India, applying their knowledge of robotics to complex problems of warehouses and the logistics supply chain,” says Karthik Reddy. “Their dream is not simply some valuation and a fundraise; they want a company that lasts longer than any fund life. That kind of clarity is why we have backed them through every round to date.”

The company’s flagship product, the Butler, a box-shaped robot, owes its design to the learnings its creators obtained by observing the drill in warehouses. It can move shelf units stacked with items weighing up to 500 kg to a human assistant, who then picks up the products and scans their barcodes. The robot then moves the selected items to the shipping bay where they are sealed for delivery. A stronger variant of the Butler launched last year is used in manufacturing facilities and large retail warehouses. It can ferry loads up to 1,600 kg. The AI-backed robot is equipped to make decisions by accessing data using machine learning applications and adapt to scenarios such as seasonal peaks or a surge in demand. The Butler’s services are used by U.S.-based XPO Logistics (ranked 180 on the Fortune 500 list), a $17-billion transportation and logistics service provider; Japan-based furniture retailer Nitori; and fishing tackle maker Daiwa.

Besides robotic products such as the Butler, automated picking system PickPal and the Sorter, a conveyor belt-based system that segregates packages according to zip codes, weight, and volume, GreyOrange also has a software platform, GreyMatter. It integrates multiple automation systems backed by AI and machine learning to perform large and complex operations in real-time for industries such as retail, manufacturing, and e-commerce. “In the last two-three years, we have been focussing heavily on building capabilities within the warehouse to build key technology platforms that would enable multiple products,” says Gupta.

Akash Gupta, the co-founder and CTO of GreyOrange.<em></em>
Akash Gupta, the co-founder and CTO of GreyOrange.
Image : Sanjay Rawat
In the last two-three years we have been focussing heavily on building capabilities within the warehouse to build key technology platforms that would enable multiple products.
Akash Gupta, chief technology officer, GreyOrange

Earlier this year, GreyOrange launched its latest AI-enabled modular sortation system, the Flexo, targeted at distribution and logistics centres of retail and courier companies. Postal and courier services today usually face challenges such as spurts in volumes or the pressure of same- or next-day delivery. The Flexo can sort over 10,000 post and courier items in an hour, reducing the cost per shipment and dependency on additional labour during peak hours. Scaling of tech, revenue, and reach is key to GreyOrange if it is to hold its own against competition. There are Chinese startups such as Quicktron, which counts ecommerce giant Alibaba as its customer, and Geek+, whose client roster includes smartphone maker Xiaomi, and Japanese startup Mujin. Then there are established global players such as Germany’s SSI Schaefer, Swisslog, Siemens, and Mitsubishi.

The investor, however, is confident of the startup’s future. “Clients from Chile to Japan, the U.S. to Germany, have evaluated GreyOrange-deployed smaller paid pilots and rapidly graduated to $10 million-$20 million single warehouse deployment contracts. It is proof that tech and revenue can scale massively,” says Karthik Reddy, adding that the autonomous warehouse era is at the beginning of the adoption cycle. He, however, cautions that GreyOrange must keep pace with tech advances.

This is not news for Kohli and Gupta. “In robotics, if you wait too long to do something, you’ve waited till it’s too late to do anything,” says Gupta.

This story was published in the September 15-December 14 special issue of the magazine.

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