After several years of subdued deal activity, the warehouse automation sector appears to be entering a new phase of growth, according to Interact Analysis.
Geek+ has just completed its IPO on the Hong Kong Stock Exchange, while Dexterity is preparing for a potential IPO. Meanwhile, Honeywell is reportedly exploring “strategic alternatives” for its warehouse automation business.
Interact Analysis examined the underlying trends and key drivers shaping the market.
Warehouse automation went boom, bust around COVID-19
Before COVID-19, warehouse automation companies typically traded at revenue multiples of around 1–2x. However, demand surged during the pandemic, fueled by rapid e-commerce growth and a boom in warehouse construction.
As a result, valuations skyrocketed. Notably, AutoStore reached a 21x revenue multiple in 2022, with SoftBank acquiring a $2.2 billion stake that valued the company at $7 billion.
Similarly, Zebra Technologies acquired Fetch Robotics for $290 million (95% stake). Based on Fetch’s “run-rate sales of approximately $10 million” at the time of the acquisition, this would imply a staggering 31x revenue multiple.
However, this boom was short-lived. As interest rates rose and e-commerce growth cooled, valuations sharply declined. By 2023 and 2024, the average valuation-to-revenue multiple had fallen to an average of 2.07x.
For example, Storage Solutions, Berkshire Grey, Alert Innovation, and Siemens Logistics (Airport) all had valuation-to-revenue multiples below 5x.
Are we entering a new growth phase?
Following two years of muted activity, signs are emerging that investment in warehouse automation may be entering a new growth cycle. Several factors support this view:
- Valuations are rebounding
While 2025 data is still limited, early indicators suggest a significant uptick in valuations. Interact Analysis estimated that the average revenue multiple so far this year is around 7x – well above the 2.95x and 1.2x seen in 2023 and 2024, respectively. - Private equity holding periods
Looking at the companies currently owned by private equity (PE) firms, the average holding period is approximately 4.5 years. Since PE firms typically hold assets for three to seven years, we expect an increase in divestments over the next 18 to 24 months. Notably, firms like Thomas H. Lee Partners, Ares Management, Dune Point Capital, and SoftBank currently own at least 17 warehouse automation companies. Many of these have been merged to form larger integrators such as KPI Solutions, Hy-Tek, and FORTNA. - Rising PE interest in research
Anecdotally, Interact Analysis has seen a marked increase in interest from private equity firms in its research over the past two months. This growing attention suggests that deal activity may soon accelerate.
Deal composition partly explains pandemic spike
It’s tempting to frame recent events as a simple “COVID-19 boom and bust” narrative. However, the composition of companies being acquired also plays a key role in valuation trends.
System integrators focused on CapEx-heavy projects tend to receive lower valuation multiples compared with OEMs with proprietary technology and recurring revenue streams.
Mobile robot vendors, particularly those offering robotics-as-a-service (RaaS), command even higher premiums due to their perceived stronger growth potential.
Coincidentally, most acquisitions during the pandemic involved automation OEMs and autonomous mobile robot (AMR) providers.
In contrast, pre- and post-pandemic deals have a greater composition of system integrators. This shift in deal composition partially explains the valuation spike during the pandemic, beyond just COVID-related market forces.
EBITDA multiples have strong growth priced in
EBITDA (earnings before interest, taxes, depreciation, and amortization) multiples for conventional fixed automation system integrators hover at around 10x to 20x. Storage Solutions, Intelligrated, Swisslog, and Dematic were acquired at a 11x, 12x, 15x, and 20x EBITDA multiples respectively.
These are slightly higher than the consensus multiple for industrial machinery and equipment, which stands at 10x, according to Equidam.
However, acquisitions of nascent mobile robot vendors have far higher multiples, with some vendors having negative EBITDA margins. For example, Geek+, which listed on the Hong Kong Stock Exchange with a valuation of $2.8 billion, had an adjusted EBITDA of -$34 million.
Many other AMR vendors that have been acquired in recent years have very low or negative EBITDA values, resulting in an extremely high EBITDA multiple. AutoStore, which was partly acquired by SoftBank in 2022 with a valuation of $7 billion, had an implied EBITDA multiple of 44x, significantly higher than its industry consensus.
In short, EBITDA is often overlooked when it comes to the valuation of emerging robotics vendors, on the basis that these companies will supposedly generate significant cash flows in the future. As such, investors tend to look at market potential and future growth projections in order to estimate future cash flows, which in turn are used to compute valuations.
The issue with this approach is that the market isn’t growing as fast as it was originally touted to be.
Navigating a turbulent warehouse automation market
Despite signs of renewed deal activity, the market remains volatile. Optimism at the start of 2025 faded as trade tensions and newly imposed tariffs under President Trump’s administration created economic uncertainty. This has delayed some capital investments.
Still, the outlook isn’t entirely bleak. Fixed automation orders in 2024 outperformed expectations, helping to cushion the revenue impact in 2025. Warehouse utilization is beginning to level out, particularly in the U.S., the U.K., and China, where post-pandemic vacancy rates had surged. As vacancy rates start to fall from their current highs, we expect warehouse construction to pick up again by 2027.
For now, retrofitting existing facilities (so-called brownfield projects) is likely to dominate. While uncertainty continues to delay greenfield investments, long-term drivers such as labor shortages and sustained e-commerce growth remain strong, supporting continued investment in automation. To learn more about our latest forecasts, you can read this article we recently published.
About the author
Rueben Scriven is a research manager at Interact Analysis. He is a leading warehouse automation industry analyst and has spoken at top industry events. Scriven has been featured in The Financial Times, The Wall Street Journal, The Economist, Reuters, and CNBC, along with numerous trade publications.
Scriven leads the Warehouse Automation research practice at Interact Analysis, a market intelligence firm focused on supply chain automation technologies. In recent years, his group’s research and analysis has expanded into warehouse software, covering the whole tech stack, from subsystem control software to execution and management software.
Editor’s note: This article was syndicated with permission from Interact Analysis.
