Why We Invested in Gather AI

Our team at Tribeca Venture Partners is excited to announce we recently led the $10 million Series A round for Gather AI, a disruptive technology company in the supply chain logistics space.

With an unprecedented boom in e-commerce sales, snarled supply chains and crippling labor shortages, the logistics industry has experienced massive upheaval due to the COVID-19 pandemic. A typical warehouse misplaces nearly 10% of its inventory, causing these facilities to lose millions of dollars per month.

Gather AI has developed a proprietary AI and computer vision software platform to solve this problem, enabling commercial-grade drones to fly autonomously around warehouses, taking inventory with incredible accuracy and transforming a time-consuming, error-prone process into a fully automated system. The customers we spoke with in Gather AI’s target industries — which include 3PL providers, retail distribution centers and air cargo facilities — told us the drones are so reliable and the data is so accurate, they often forget the drones are even there.

Unlike competitors that have developed their own customized hardware, Gather AI uses off-the-shelf consumer drones, such as those manufactured by DJI and Parrot, that anyone can buy on Amazon. This provides Gather AI with an enormous competitive advantage in cost and scalability, enabling the company to operate under a SaaS business model with high gross margins. While traditional SaaS businesses use servers and the Internet to “deliver” their products, Gather uses drones (as well as servers and the internet too, of course).

All Gather AI’s drones need to operate is an outlet for their charging stations — no new infrastructure or changes to the facilities are required, and the drones can still run in the dark and without wifi. Gather AI’s drones simply take pictures, and the software analyzes those photos to find and process bar codes, QR codes or whatever identifier the warehouse uses. This makes the platform very flexible, extremely scalable and highly attractive to warehousing customers across a wide range of industries.

In addition to having strong unit economics, significant technical barriers to entry and a scalable business model, Gather AI satisfies another key investment criteria for us: it sits in a massive market. There are over 150,000 warehouses globally, representing a total addressable market of $21.6 billion annually. This number is growing and expected to reach 180,000 by 2025 to meet exploding e-commerce demands. More and more warehouses and distribution centers realize that automation is critical to their future expansion plans, with 42% stating they are making investments into automation and robotic processes this year.

Of course, the most important criterion for any potential investment to us has always been the team. Gather AI was founded by an incredibly smart team of robotics graduate students from Carnegie Mellon University. For instance, CEO Sankalp Arora received a PhD in Robotics and developed safety and sensor planning for the world’s first autonomous helicopter, which won the Howard Hughes award for an outstanding improvement in fundamental flight technology. Today, Sankalp works closely with COO Charlie Reverte, who is both a fellow Carnegie Mellon alum with a Master’s in Computer Science as well as an experienced startup executive with several successful exits.

Gather AI exemplifies a new generation of software-only robotics companies that have the kind of business models we love in B2B SaaS, with the kind of technology moats we typically only see in deep tech. We’re excited to be part of the Gather AI story as they continue their groundbreaking journey towards modernizing critical infrastructure in the warehousing and logistics industries.

Read more in TechCrunch here, and read the press release here.