SoftBank Group and Symbotic establish “warehouse-as-a-service” joint venture

SoftBank Group Corp. and Symbotic, a provider of A.I.-powered robotic automation technology for supply chains, today announced the establishment of GreenBox Systems LLC, a new joint venture to address what the partners are calling the "warehouse-as-a-service" market. The partners figure the addressable annual market for this type of "as-a-service" offering to be $500 billion, based on U.S. case throughput based on third-party consultant estimates.

Concurrently, Symbotic also announced an approximately $7.5 billion new customer contract with GreenBox, who will be the exclusive provider of Symbotic systems in the warehouse-as-a-service market, and will make supply chain services available to customers.

GreenBox will automate supply chain networks globally by operating and making accessible Symbotic’s advanced A.I. and automation technology for the warehouse, Symbotic added. Symbotic’s A.I.-powered robotics and software technology will be the cornerstone of GreenBox, installed in single and multi-tenant facilities. Symbotic uses multiple types of technology in its solution, including high-density case storage, smart articulating robotic arms on both the inbound and outbound sides of the process, and machine learning.

“We are pleased to partner with SoftBank in this venture that accelerates our shared vision to transform the supply chain,” said Rick Cohen, Symbotic’s Chairman and CEO. “GreenBox enables Symbotic to bring the benefits of our technology to a broader customer universe, expanding our market opportunity.”

“GreenBox taps into the powerful potential of A.I. and other enabling technologies in supply chains, while also making the benefits of automation accessible to more businesses through an ‘as-a-service’ offering. In partnership with Symbotic, GreenBox will equip customers with more intelligent, streamlined, and scalable warehousing solutions while eliminating the burden of major capital expenditures,” said Vikas J. Parekh, Managing Partner at SoftBank Investment Advisers.

GreenBox will order Symbotic’s systems over a six-year period commencing in fiscal year 2024, to be implemented across its warehouse network in larger-scale deployments than Symbotic’s current installed base systems. Symbotic expects in excess of $500 million in annual recurring software, parts and services revenue from GreenBox once all systems are operational. Symbotic systems typically become fully operational within 24 months of project design approval.

GreenBox’s board of managers will comprise three managers, one nominee from each of Symbotic and SoftBank, and one independent manager. GreenBox’s management team will be independent from Symbotic and SoftBank.

SoftBank and Symbotic own 65% and 35% of GreenBox, respectively, with the joint venture established today. GreenBox will initially be funded with $100 million of capital contributed pro rata by Symbotic and SoftBank to fund operating expenses and initial system purchases. After Symbotic’s initial $35 million pro rata capital contribution, the contract is expected to be accretive to Symbotic's annual free cash flow (net of capital contributions).

Symbotic has issued warrants to SoftBank representing up to 2.0% of Symbotic’s fully diluted shares outstanding, which will vest in 0.25% increments upon payment of each $937.5 million to Symbotic for installation of Symbotic systems under the GreenBox contract. The warrants have a 6-year term and strike price representing Symbotic’s 45 trading day volume weighted average price (VWAP) as of July 21, 2023, of $41.9719 per share.

Separately, SoftBank has purchased approximately 17.8 million shares from Symbotic Chairman and CEO, Rick Cohen, at Symbotic’s 45 calendar day VWAP as of May 26, 2023, of $28.05 per share. This sale is 100% secondary shares and will not result in any dilution to Symbotic shareholders.

An investor presentation with additional detail is available in the Investor Relations section of the company’s website (link here).