Amazon has recently announced its plans of investing in Balyo, the French robotic firm. Balyo is into developing navigation technology for self-driving forklift trucks.
In the next seven years, Amazon plans to gather 29% stake in Balyo via free stock warrants. As per the deal, Amazon would be able to use the warrants based on orders it places with Balyo. If Amazon orders US$300 mn of Balyo’s products in the next seven years, all stock warrants will be used.
Deal Would Allow Amazon to Boost Efficiency
The investment in Baylo would allow Amazon to ramp up sales big time in the near future. This is because such kind of advanced automation used in its packed warehouse can expedite the delivery process. The same will enable Amazon to reduce operational cost and thus boost profits.
Currently, Amazon floor automation exists in just 13 of its fulfillment centers. And, in all, the company had 75 centers till June 2016. Robots built by Kiva Systems carry out functions effectively in Amazon’s existing 13 automated fulfillment centers. The ecommerce company bought those for a staggering $775 mn in 2012.
Up until 2017, Amazon had over 100, 000 robots conducting various repetitive work in its branches worldwide. The company liberally uses latest modern machineries to improve efficiency, something that enables it to maintain its leading position in the market.
Amazon feels the deal would help it improve its efficiency further. It would bring about swifter deliveries too, while reducing the allocations on manual management.