We are seeing high demand for logistics automation due to pandemic: Addverb Co-founder

'Addverb' is one of the leading robotics and automation firm in the intralogistics solutions space. By leveraging various digital technologies, the company has designed its own software solutions that are embedded in the hardware for accomplishing a task. The company currently works with many large e-commerce players and fashion retailers to automate their warehousing process.

In a conversation with Bizz Buzz, company's Co-founder Bir Singh said that the company has opened offices in overseas market in the last one year and has plans to set up a centre in the US soon. Such overseas expansion will help the company to bag more orders. The technology firm aims to attain $1 billion revenue mark in the next five years and is in talks with investors to raise its next round of funding in the near future, which will enable it to set up another manufacturing unit.

How is the business for Addverb Technologies during this pandemic period? Has the demand has seen a surge as more enterprises opt for automation?

We are receiving demand which we have not anticipated. However, with demand uptick, comes the execution. We were facing some issues in the execution space. However, that problem has been solved. I think, the bad time is gone and the good time is coming up.

Is the demand coming up across the segments or limited to specific verticals?

The demand is coming up from all the segments. Be it e-commerce, e-grocery, fashion & retail or fulfillment centres - demand is coming up from many verticals. However, quantum jump is happening in the e-commerce and e-grocery segments. Apart from business from segments, we also get business from various kinds of warehouses- whether it is a central fulfillment centre or a factory fulfillment centre.

How is the deal pipeline now? How much of it will translate into actual deals?

We are seeing twice the inquiries. Normally, when we get any inquiries the average conversion time ranges from three to six months. There was a good amount of conversion in the first outbreak (March last year) and there was a good amount of conversion in the second outbreak. In our business, the project values are not low as our technology solution helps in complete warehouse automation. Our deal values range from Rs 10 crore to Rs 100 crore. So, when companies take these kind of investment decisions, they require time for deliberation.

During the first wave of the pandemic, we converted a good opportunity from a major e-commerce player in India. We also converted an opportunity from a very big fashion and retail brand. We had bagged a deal from an oil and gas company. As far as deal pipeline is concerned, active enquiries are around Rs 800 crore to Rs 900 crore. We also have a pipeline of projects worth Rs 400 crore which we have to deliver this year.

Do you get these deals only from India or from overseas also? Can you throw some light on this aspect?

We get deals from India and overseas. We have opened office in Singapore last year and this year, we also opened an office in Australia. So, our enquiries come from Asia, Europe and Australia. We started this company five years back. Till that time, we used to do a small percentage of business from overseas. We missed a lot of business opportunities because we didn't have presence in the client's geography. Therefore, we opened an office in Singapore last year. We also opened offices in New Zealand and Australia towards late last year. As of now, 30 per cent of our business is coming from overseas. However, this ratio is likely to change to 40 per cent this year or next year. Our aim is to attain a revenue mark of $1 billion in 2026.

What is the current revenue run rate? How confident are you to attain the $1 billion revenue mark?

Last year, we have done $30 million revenue, which is close to around Rs 200 crore. This year, we are hopeful of touching $100 million revenue mark or around Rs 700 crore. We have a very good order book and are confident of attaining the revenue figure. We are also going to open offices in the US soon and we are in serious discussion with two-three vendors there. We believe that the US will throw a lot of good business opportunities.

Do you manufacture your own hardware and then these hardware components are embedded with software solutions? Can you throw some light on your products?

We make our own hardware. We make all kinds of robots. For instance, we make mobile robots, which are used in the warehouses. We also make instruments that are used in the traditional warehouses. All the hardware are managed by our proprietary software which are called warehouse management system and warehouse control system. There are also other software system for managing the fleet of robots. We have a very good software powered by artificial intelligence, natural language processing and other such technologies.This puts us in an advantageous position. So, we have our own hardware, driven by our own software.

Globally, processes in warehouses are manual. Therefore, there is a large scope for warehouse automation.

The next growth area, we are looking at is airports. In airports, there are a lot of baggage, which need to be handled. We have started working on these products which can help this process. Another emerging area is hospital and hospitality, which is also in our radar. All these activities can be handled by robots.

Are you adequately funded now? Do you plan to raise resources in the near future?

We are well-funded now. Initially, we raised small amount of fund. Then, we raised another round to set up our manufacturing capacity in Noida. Now, we are about to close another round of funding to expand our presence in various global markets. This round of funding will also help in setting up another manufacturing plant in India or outside India, which will have 4-5 times capacity than what we have right now.