Addverb plans to achieve $1 bn topline providing automation solutions by 2028: Satish Shukla

Addverb Technologies, a Noida-based robotics startup, provides intra-logistics automation solutions for the manufacturing and supply chain industry. Since opening its second manufacturing plant in India, the company has experienced a significant surge in robot demand, particularly from the E-commerce and retail sectors. According to Satish Shukla, co-founder of Addverb, the company has set an ambitious target to achieve $1 billion in revenue over the next five years, which would, be nearly 20 times what it achieved last year. Edited excerpts:

Who are your competitors and what differentiates your company from others?   

We only have global competitors like Dematic, Knapp, Swisslog, SSI Schaefer and Daifuku. Our product portfolio itself is a key differentiator. Then there is the solution capability that we have. In our earlier profiles, all of us were working for companies like Asian Paints, ITC, etc. where we used automation extensively, and as a user, we have a lot of insights into how these automation systems should be used and how the warehouse material flow should be designed. So, we don't follow a product-first approach rather we follow solution first approach. Another thing that differentiates us is configurable software. 

How do you read the current robotics trends in India and which market segment has the highest demand? 

In India, when it comes to adoption of robotics and automation, the triggers are very different as compared to the West. The cost of labor is very cheap in India, which is not the case in the West. In India people need to address the problem of scale. With the availability of cheap data and good internet connection in the hinterlands there has been a steep rise in e-commerce, organised commerce retail, fashion and now even groceries are going online. Automation is not there in quick commerce 10 minutes’ delivery but at least an overnight grocery or 4-6-8 hours’ delivery. We are now seeing the kind of e-commerce penetration which is not even seen in the West. All this is forcing companies to adopt automation because this modern e-commerce requires you to have your supply chain which can be a part of this era. People are not looking at automation to remove labor or to solve the problem of labor shortage but they are looking at automation to create an efficient, reliable, and accurate supply chain or fulfillment operations, which can help them in scaling their business. 

So, in the last few years, we saw a lot of traction in e-commerce and retail. But now we are seeing a lot of traction in conventional manufacturing industries, in the chemical industry, and in the last six months to one year, we have seen a lot of traction in the paint industry, tire industry, oil and gas sector, and refineries as well. So, these are some of the sectors in which we have also seen traction apart from Fast-moving consumer goods (FMCG) segment. 
  
Is AI changing the robotics landscape? 

There is a lot of hype around generative AI, how many fields or areas will it impact and that needs to be seen and probably it will create a more meaningful impact in different fields. We already use AI, ML, and deep learning for our mobile robot applications where with the help of LiDARs, we did 3D maps of the robots for the surrounding area, and then a robot takes its decision to move or perform a task. Now the robot can navigate its path to find the shortest path on its own and also evolves if some obstacle comes in its way just like how we humans do. So that is the application of AI that we use.   

Apart from that we also get a lot of data for our warehouse execution system and we will get a lot of data in terms of what kind of inventory is required, what kind of inventory is frequently being used, and then we use it on our machine learning models to sort of prioritise which inventory should be picked first or which order picking should be performed first, that is the use of AI that we are doing. 

There is one more application that we are extensively working on. We are building a collaborative robot with the help of a vision system that will have the capability to take items of any orientation. Now, we have developed our algorithms, our vision system, which can detect the orientation of the product and how the product is placed, whether it is kept vertically or horizontally, they can pick the product by selecting a gripper of their choice. So this creates a lot of avenues for newer applications in warehouses. 

So far, if you see warehouse automation, most of the applications are focused on the movement of goods. With this, we will be able to open the avenue of picking the goods and items and also possibly shipping, and packing the items as well. So, these are some of the use cases that we have for AI. We have not yet explored the impact of generative AI on our products. 

How is your manufacturing and operational set up placed currently? What’s the team strength? 

Bot Valley is our first facility that was inaugurated in 2021. It acts as our corporate office, R&D centre, customer experience centre, and specialised manufacturing unit. Whenever we launch a new product, we manufacture it on a scale in Bot Valley or if we must manufacture any customised product, we manufacture it at Bot Valley. Bot Verse is our second manufacturing facility, so Bot Valley is spread over around 2 acres of land and Bot Verse is spread over 15 acres. Bot Verse is a pure manufacturing facility that can manufacture around 50,000 robots in a year of different shapes and sizes, and this is one of the largest mobile robot manufacturing facilities in the whole world. Bot Valley is in Noida and Bot Verse is in Greater Noida, and apart from this we have two software development centres in India, one in Pune and the other in Noida. Additionally, we have offices in Singapore, Australia, Dubai, Netherlands, Germany, Britain and the US, and we also have an R&D centre in the US. 

We have around 800 employees on our payroll and apart from that around 700 employees who work on different project sites and contract employees and around 50 employees outside India spread across different geographies. We typically hire through campus recruitments every year so around 100 people are scheduled to join us in September. 

What is your company's partnership with Reliance? 

Reliance is a strategic investor and we completed the transaction one and a half years back. So, we have been working with Reliance almost since 2018. And we worked extensively with them to set up their distribution centers for Jio Mart. We also set up a micro fulfillment centre for them in Reliance Corporate Park, which is used for delivering groceries and fashion and this is one of the micro fulfillment centres in the whole world probably which is completely automated, lights out warehouse kind of a facility. Now, at some stage Reliance, wanted to have a strategic interest because they have very different lines of businesses like retail, grocery, fashion, electronics, refinery, new energy and BPC cosmetics, beauty, and personal cosmetics. And they wanted an automation partner who could design good solutions for them and that's where our interest in their interest merged where we also wanted a customer who could give us an opportunity to design innovative solutions for different business models and Reliance has opportunities and that's how we came together. 

How does the future look like? 

Addverb began with a revenue of ₹1.6 crore in 2017 and achieved a revenue of approximately ₹450 crore in 2023, resulting in a CAGR of over 150%. Even if we maintain an aggregated CAGR that is half of this rate, we are poised to reach a billion-dollar revenue in the next five years. While we acknowledge that this is an ambitious target and might attain around 70-80% of it, the potential for substantial growth remains evident. During the initial six years, we primarily focused on the cost-sensitive Indian market. Yet, we managed to achieve a cumulative revenue of around ₹1,200 crore. As we expand our presence across the world, we expect to gain cost advantages and leverage our own manufacturing facility, along with a significant software edge. This positions us for exponential growth in markets such as EMEA, the US, and Australia, which are significantly larger than India. 

By increasing our deployments, we are introducing a critical component of AMC on the cumulative order value, as well as generating recurring revenue through software upgrades and licences. This revenue stream is expected to grow steadily as our deployments expand, without incurring substantial customer acquisition costs. This model, similar to the spare parts market in the auto industry, will drive significant revenues for us. 

The global warehouse industry is projected to double in size in the next five years, reaching around $50 billion by 2028. To achieve our target, we only need to capture a modest market share of 2%. Fortunately, we already have a manufacturing facility in place to cater to this demand, and we stand to benefit from the ongoing shift away from Chinese players. 

We have successfully established relationships with global companies that heavily invest in technology, such as Amazon, Reliance, DHL, UPS, Maersk, PepsiCo, and Landmark group. As we continue to deploy our solutions, we anticipate securing larger shares of their orders, paving the way for further penetration into Fortune 50 customers and ensuring repeat business. 

Warehouse automation, as an industry, holds immense potential with a long way to go before maturity. Our foray into the healthcare and airport businesses will introduce entirely new segments of customers.

While the target of a billion-dollar revenue is ambitious, our strong market position, expansion into global markets, recurring revenue streams, and the potential for exponential growth in emerging sectors and regions make this goal achievable.