One of Japan’s largest conglomerates – Mitsubishi – is planning to pick up a minority stake in warehouse robotic startup GreyOrange, according to two sources familiar with the development. Sources further claimed that the existing investor Tiger Global may also participate in this round and the investment is being clocked just below $20 million.
The entire investment will be processed through a convertible note, which presumably would allow GreyOrange in seeking better valuation in the later stages of fund raising.
Both Mitsubishi and GreyOrange have so far not commented on the news report.
But sources have confirmed that GreyOrange currently wants to go for smaller rounds and is planning to go for large fund raising by early next year. Interestingly, Mitsubishi happens to be one of the many clients of GreyOrange, which is based in Gurgaon and Singapore.
This Gurgaon based company is basically aiming to revolutionize the warehouse management solution through its advanced robotic systems. The company currently offers two robotic products to clients: Butler & Sorter. Butler aims at providing automated inventory storage and reducing inventory replenishment, while Sorter (as name itself suggests) aid in proper sorting of orders across warehouses & distribution centers.
GreyOrange stands out for one peculiar reason: It is one of the few robotic hardware startups to come out of India and also for being backed by high profile investors like Tiger Global and Blume Ventures. The robotic company’s last funding came in 2015, with both Tiger Global and Blume Ventures joining hands to raise $30. However, since then the company has struggled to raise funds owing to valuation mismatch.
In the past, the founders evidently thought that the company deserved much better valuation, but the investors did not seem to agree with their valuation price. This apparently is the reason for company to take up convertible note route for the upcoming round. The convertible note is a form of short-term debt that invariably converts into equity, normally in lieu with a future funding round and to seek better valuation for investors.
Globally, Artificial Intelligence (AI) backed robotic companies have managed to rake big funds. This is mostly all thanks to the unprecedented hype around AI, with many experts touting this new age technology as the next big thing in the world. However, since robotic company being a capital intensive business, many startups have being found to be starved for more funds & better valuations.