Magazino: High sales come later than planned

Founded in 2014, the Munich-based robotics startup specializes in intelligent and mobile robots that can work in parallel with humans. The company serves niches in intralogistics and e-commerce fulfillment. References can be as diverse as well-known companies such as BMW, Lloyds Shoes, DHL and, above all, Zalando. Zalando is also one of the shareholders. The proof of concept has long since been provided. It looks as if Magazino has done everything right. In this respect, Magazino is a good role model for other young companies. At the same time, however, it is obviously also a warning: The market cannot be developed as quickly as planned.

Very few people make it from 0 to 100

In November 2018, Handelsblatt quoted "sources in industry circles" who at the time assumed a double-digit million euro turnover. Founder Frederik Brandtner cited sales of "certainly over 100 million euros" for 2019. One reason for the high turnover would be the licensing of its robot operating system for other manufacturers as well ( Rethink Robotics once had this in mind with its Intera system). The 2019 balance sheet available in the Federal Gazette, however, only lists revenues of €0.7 million for 2018, which doubled to €1.3 million in 2019, but nevertheless did not come close to the previously mentioned target. Incoming orders increased six-fold, and the development in 2020 is also likely to have been positive. In the fall of 2020, Jungheinrich then stepped in and invested €8.5 million. Existing investors and the European Investment Bank also became involved, resulting in a total inflow of €21 million.

Interesting pricing model

Magazino recently announced further sales to Zalando. In the spring of 2022, 28 Toru robots will be in use at the mail order company - more than at any other customer. At a unit price of around €60,000 and 6 cents per pick, however, the total volume of the order, which is spread over several years, is likely to be only in the low single-digit million range. The sales target of €100 million therefore does not appear to be achievable any time soon. This is also supported by the fact that only a modest 80 robots had been built by the time Jungheinrich entered the market. High sales could therefore only have been generated with software.

Medium rating

Jungheinrich received 18.2% of Magazino for the €8.5 million in the course of a capital increase. The company is therefore likely to have been valued at around €50 million.

Software beats hardware

It is striking how much Jungheinrich praised Magazino's software when announcing its entry. Obviously, Jungheinrich was clearly concerned with the software, which Jungheinrich itself would then be able to use. The Chairman of the Board of Management, Dr. Lars Brzoska, made similar comments last year as he did most recently when he acquired arculus:

"Magazino is a highly innovative young company with outstanding expertise in navigation and control software for mobile automation. The investment follows our strategy in the field of automation and will make a significant contribution to the accelerated expansion of our automated vehicle business."

So the software must be really good. However, the previously mentioned high revenues do not seem to be realized so quickly. Startups can learn from this that revenues can rarely be achieved as quickly as they were planned.

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The author of this blog is significantly involved in the AI/ robotics project Boost-Bot. He advises robotics companies and investors on market (entry)/ business development and funding/subsidies. The standard book on cobots is also written by Guido Bruch (however, the book is already 2 years old and therefore not quite up to date). More about him can be found here.