SoftBank, the Japanese telecommunications and investment conglomerate, is increasing its bet on e-commerce and robotics with a new large investment.
AutoStore, a Norwegian corporation that specialises in warehouse automation technology designed to support e-commerce operations, is receiving a $2.8 billion investment from the Tokyo-based business. The investment, according to a statement released last week, values AutoStore at $7.7 billion and “accelerates AutoStore’s global expansion, with a particular focus on the Asia-Pacific region.”
Analysts believe that the growth of e-commerce is a major reason for SoftBank’s investment.
In a quote, SoftBank founder Masayoshi Son said, “We view AutoStore as a foundational technology that enables rapid and cost-effective logistics for companies around the world.”
According to Grand View Research, the global e-commerce sector, which was worth $9.09 trillion in 2019, is expected to rise at a compound annual growth rate of 14.7 percent from 2020 to 2027. According to Sandy Shen, senior director with market research firm Gartner’s digital commerce team, “a boom in online shopping among people spending more time at home now because of the pandemic is fueling development.”
According to Rajiv Biswas, Asia-Pacific chief economist at market research firm IHS Markit, e-commerce revenues increased by 27% year over year in 2020 as a result of pandemic lockdowns in many countries around the world. With the proliferation of smartphones and e-payment systems, he claims, e-commerce revenues had already risen “rapidly” in the largest economies prior to the pandemic.
SoftBank wants its portfolio companies to collaborate to create an ecosystem of their own. Sprint and Yahoo Japan are among the companies managed by the company, as is the Vision Fund, the world’s largest tech-focused venture capital source. According to consulting firm Global Tech Partners, Vision Fund-backed companies will shape an ecosystem, stoking overall portfolio growth.
Coupang, the e-commerce behemoth in which Vision Fund has invested, stands out as a possible ecosystem contributor. The IPO of the South Korean firm in New York last month was the largest international business IPO in the United States since 2014. In 2018, Coupang raised $2 billion from the Vision Fund, giving it access to a maturing market.
“While China is saturated,” Shen says, “the size of e-commerce in other parts of Asia Pacific and Europe isn’t as big, so there’s a chance for it to grow.”
She says, “With the pandemic out there, the risk is much greater.”
Biswas predicts that automation and other supporting technologies will develop in lockstep with e-commerce. AutoStore claims to have 20,000 robots in 35 countries and a worldwide “blue-chip” customer base. “As the global retail e-commerce market grows, so will invest in emerging e-commerce technology, helping to drive more growth in online shopping,” Biswas says.