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Woolworths Group Ltd., which claims to be Australia’s largest retailer, has acquired the assets of Takeoff Technologies Inc. for $2.5 million, according to a purchase agreement obtained by The Robot Report. Woolworths will also pay up to $700,000 in closing costs.

The sale is still subject to the Bid Procedures Order and applicable law. Founded in 2016, the company offered systems ranging from manual fulfillment technology to highly automated micro-fulfillment centers (MFCs).

The acquisition means that Takeoff has essentially closed its doors for business. As part of the agreement, Woolworths will be hiring at least 70% of Takeoff’s existing staff. 

In May, the Waltham, Mass.-based company filed for Chapter 11 bankruptcy relief. Takeoff said it intended to solicit interest in sales of its assets. It had been kept afloat by $9.6 million raised from a consortium of its customers through debtor-in-possession financing.

Customer Woolworths to become owner

Now, Takeoff Technologies has found a buyer in one of its longtime customers. It first partnered with Woolworths in August 2019. At the time, the company planned to implement automated MFCs at an initial three sites to help meet customers’ growing demand for shopping online. 

Right now, it’s unclear what Woolworths plans to do with the assets it has acquired. The retailer will likely continue to use the MFC technology in its facilities, leaving Takeoff’s other customers, which include Hy-Vee and Albertsons, in the dark. 

“I’m not surprised that the Woolworths Group was the winning bidder, as they plan on continuing to utilize Takeoff’s micro-fulfillment centers to fulfill online grocery orders,” said Brittain Ladd, a fractional supply chain and logistics executive and analyst who first broke the story. “From a long-term strategy perspective, I recommend that Woolworths and other Takeoff customers assess systems from Attabotics, AutoStore, and Brightpick, to name a few.” 

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Takeoff Technologies stalls after pandemic

Takeoff Technologies had claimed that its micro-fulfillment system for groceries can bring in $25 million to $30 million a year in gross merchandise value (GMV). It provided hardware, cloud orchestration, industrial AI, data-driven analytics, and support for its customers. 

The company worked with retailers to analyze their shoppers’ preferences and online demand from regions. From there, it helped them select the right size, configuration, and placement of each site within their networks.

Takeoff said it could implement a customer’s first live sites within months of initiating the process. Its grocery automation partners included Knapp, Hussmann, and Google.

While the company saw early success in the market, it wasn’t able to continue its momentum once the pandemic, and the increased need for grocery delivery, died down. 

Founded in 1924, Woolworths Group has served Australian and New Zealand communities for almost 100 years. It’s Australia’s largest private employer, with more than 200,000 team members across more than 1,450 Woolworths Supermarkets, Metro Food Stores, Woolsworth New Zealand, and BIG W discount department stores. 

The retailer said it averages around 25 million customers a week.