The History of Kiva Systems: What to Know
Kiva Systems is responsible for major innovations within the robotics, logistics, and warehousing world, and the systems they designed help to set the stage for some of the more significant advances in an area that has become hugely important to today’s modern consumer economy.
Kiva Systems was launched in 2003, and its launch occurred as a result of the perceived lack of flexibility within the logistics and packaging world. Their success completely revolutionized the idea of how warehouses and fulfillment centers were operated, with automated robots being guided throughout fulfillment centers in order to complete an order.
- Year Founded
- Mick Mountz, Peter Wurman, Rafaello D’Andrea
- Robotics, technology, logistics
- Formerly North Reading, Massachusets
- Key People
- Mick Mountz, Peter Wurman, Rafaello D’Andrea
- Notable Products
- Pods and a variety of related equipment
The company was so successful that it was purchased in 2012 by one of the world’s largest companies: Amazon. In 2015, it was renamed Amazon Robotics and ceased to operate as an independent company.
The Founding of Kiva Systems: How it Happened
Kiva Systems was formally started in 2003. The prime founder of the company was Mick Mountz. At the time, Mountz worked for Webvan, a company that was involved in the only grocery business. Mountz was frustrated with the way that stock moved within Webvan’s warehouses, believing that there were more efficient ways to move the stock from one location to another. He believed that there were more efficient ways to move products and stock within a warehouse.
With this in mind, Mountz approached Peter Wurman and Rafael D’Andrea. The three became the founders of Kiva and would remain involved with it until its sale to Amazon.
Kiva Systems Through the Years
2003 – 2012: Founding and Start-Up
Mick Mountz founded Kiva after his frustration with Webvan. At the time, he noted that he believed Webvan could operate with more efficiency and flexibility, but the company was unwilling or unable to do so. As such, he founded Kiva Systems after getting D’Andrea and Wurman onboard.
The company was originally founded with a $33 million investment from Bain Capital. Its investors helped the company in more ways than that, introducing Kiva to early customers like Staples.
During this time period, Kiva saw explosive growth, nearly doubling in size in some years. It won numerous accolades for this growth and its innovative technologies. In 2009, Kiva Systems was the sixth fastest-growing company in the United States, with its rate of growth far outpacing any other of its competitors in the industry.
In 2011, Mountz told CNN that the company was generating over $100 million a year and had around 240 employees. There was a major management shakeup of Kiva Systems executives during this time, with multiple executives leaving the company to pursue other ventures.
2012: Amazon Acquisition
In 2012, Amazon announced its acquisition of Kiva Systems, deciding that it was easier to outright purchase the company and prevent it from working with any of its competitors in the future. The purchase was for $775 million. At the time, it was Amazon’s second-largest purchase. The company’s headquarters remained in Massachusetts after the sake.
2015: The Name Change
In 2015, Amazon changed the name of the company, and Kiva Systems became Amazon Robotics. At the time, Amazon had 15,000 robots in its employ. To date, that number is north of 350,000.
What are the Most Important Inventions from Kiva Systems?
A New System
Kiva Systems turned the idea behind the packaging, logistics, and warehousing completely on its head. Prior to Kiva’s innovations, humans would pick and pack packages. Kiva’s system kept humans around the ring of a facility, instead of relying on robots to do the actual picking. Using a series of technological advances in robots, AI, and barcoding, robots would bring goods to humans. Humans would then pack the boxes and have more time and ability to do so.
Mountz himself would sometime bristle at the notion that Kiva was a robotics company. He called the business a company that solved a business problem, not a mere robotics seller.
The system worked like this:
- An order would be placed and a printer would print out a barcode. That barcode would be added to an empty cardboard box.
- A mobile drive unit – invented by Kiva – would go and locate the item based on the barcode.
- Another robot would bring the item to a human, who would stuff and seal the item, then prep it for shipping.
How Does Kiva Systems Make Money?
Before its acquisition, Kiva Systems made money via the sale of its robots and entire packaging system. They would earn millions for each sale. Today, Amazon Robotics is no longer responsible for making money. Instead, the company acts exclusively as a division of Amazon itself and does not sell its products to any other companies or Amazon competitors.