New Start-Up Is Transforming Last-Mile Delivery

“The more forward-thinking real estate guys are thinking about what is happening inside of the building as well as the physical real estate,” Peter Lewis, president and chairman of Wharton Equity Ventures, tells GlobeSt.com. Lewis is an investor in Fabric, a new start-up that aims to revolutionize last-mile operations through technology.

The company uses robotics to operate industrial facilities, and it has gotten big attention in the tech world. In October, the company secured $200 million in funding and had a valuation of $1 billion. Lewis says that industrial real estate players should learn the name, too. “These warehouses are hard to staff, and labor is impossible to find. Robotics work 24-7, and they are reliable. We knew the pain points of the micro last mile, and we felt that Fabric had the right formula to succeed here,” he says.

Fabric is using robotics to streamline the fulfillment process, and it already has a list of big name clients like Walmart, Instacart and FreshDirect. “There is a resounding demand for properties that are close to the population,” says Lewis, but being close to people is no longer enough on its own. “The pressure for the big guys to get goods out and get it in people’s hands is only getting worse. If they don’t do it, their competitors are going to do it. This is why we think this is the right time for micro-fulfillment,” he explains.

Lewis says this is just the beginning. He expects industrial facilities in urban cores, near population centers will adopt the technology first before it moves out to warehouses and distribution facilities that serve trucking routes. “We are going to see robotics and AI become more mainstream as the costs come down and a new generation step into the fold and embrace it,” he says. “We still have a footing in both worlds, and I think that it is going to take a little time for it to become mainstream.”

From the real estate perspective, developers will need to make adjustments to some facilities to accommodate the technology—and power is going to be the biggest demand, according to Lewis, who says that owners need to future proof their buildings today. Industrial properties will need enough power not only to operate robotics but also other rapidly emerging technologies, like electric vehicles. “This whole revolution is in its first inning,” says Lewis. “You are going to see it growing really fast because AI is getting better and robots are getting better.”