CALGARY — Attabotics, a Calgary-based robotics company, has been eyeing a potential new manufacturing hub for its automated warehousing technology in Hamilton, Ont., according to documents obtained by The Logic, potentially marking a substantial expansion for the startup.

The company has seen demand for its warehousing systems surge amid global supply-chain constraints and a rapid shift toward e-commerce during the COVID-19 pandemic. Inspired by the structure of ant colonies, Attabotics’ technology lets goods be stored in and retrieved from large cube-shaped structures, eliminating the need for rows and aisles and saving valuable space for distributors.

In a May 2020 government memo, which The Logic obtained via access-to-information request, a senior official at Innovation, Science, and Economic Development Canada (ISED) details a $73.3-million plan Attabotics proposed to boost research and development on its “core technology,” expand on its existing manufacturing capabilities in Calgary, and establish a new manufacturing site in Hamilton that would eventually incorporate more advanced techniques.

The company’s submission to ISED was part of a pitch to secure public funding for its expansion plans, which have not previously been made public. Attabotics declined a request for an interview and did not respond to The Logic‘s emailed questions before deadline.

Seven months after the memo, the government awarded Attabotics a $34-million loan through its flagship Strategic Innovation Fund. Months earlier, the company had closed a US$50-million Series C fundraising round led by the Ontario Teachers’ Pension Plan and industrial giant Honeywell, saying in the accompanying press release it would use the Series C to “invest in new technologies” and “scale manufacturing operations.”

In the government memo, the federal official lauds the company’s “disruptive warehouse storage system” that “maximizes the full height of a warehouse.” The official urged then-industry minister Navdeep Bains to divert public funds toward Attabotics, saying it would “support the scale-up of a high-growth, innovative Canadian company and contribute to the development of Canada’s Al innovation community.” 

“The drastic manufacturing scale-up will position the company to achieve geographical diversification and meet customer demands from coast-to-coast,” the analyst said. 

Attabotics has already secured partnerships with some major suppliers, including Accelerate360, a media and logistics company, and the department store Nordstrom.

Investors have been piling into supply-chain technology to meet the demands of the fast-growing e-commerce sector. In 2021, supply-chain tech companies raised nearly US$200 billion in capital globally, more than double any previous year, according to PitchBook. Venture capital funding to the sector accounted for more than US$50 billion alone. 

The pandemic has accelerated the trend, forcing distributors to adapt to the accompanying surge in online retail activity and embrace direct-to-customer delivery systems, which often require more sophisticated machinery. 

“Everybody’s sold on this accelerated movement to e-commerce,” said Willy Shih, a supply-chain expert and professor at Harvard Business School. “That means your normal distribution centres have changed their roles.” 

Amplifying that shift, he said, is a pronounced labour shortage that has slowed the movement of goods and led companies to consider new distribution methods.

“What you’re seeing is a lot of interest among companies about how they can automate some of these distribution tasks,” Shih said. 

For Attabotics, that has meant a move toward more micro-fulfillment centres, allowing the company to service smaller merchants much closer to their places of operation. 

Hossein Abouee Mehrizi, professor in management sciences at the University of Waterloo, said that mirrors a broader trend among logistics companies, which reverses the longstanding industry principle that saw companies favour massive centralized distribution hubs outside of urban areas. 

“They are now seeking to go back to decentralized facilities,” he said. 

Attabotics’ potential Ontario expansion plans would represent a new development for a company seen in Alberta as a homegrown success story. The company currently manufactures its robots and the frames on which they move products at its Calgary facility, then assembles the technology for its clients in their warehouses.

The Opportunity Calgary Investment Fund, a municipal program, pledged $4.5 million to the company in 2018 to help it expand its manufacturing capabilities in the city.

“It’s local, it’s disruptive, and it’s looking to grow right here in Calgary,” former mayor Naheed Nenshi said at the time. “Competition from other cities is intense, so it’s critical we have a tool like OCIF to help an innovative, game-changing company grow in its hometown.”

With files from Murad Hemmadi