Woolworths venture capital arm W23 invests in fast fulfilment company that promises lightening fast delivery for online retailers

The retail giant was so impressed with what a ‘fast fulfilment’ business was doing for the supermarket’s health and wellness start-up, it bought a 40 per cent stake.

Woolworths has bought a 40 per cent stake in fast fulfilment company NP Fulfilment via its venture capital arm W23. Picture: John Feder

Woolworths’ venture capital arm W23 has taken a 40 per cent stake in an online shopping “fast fulfilment” business that uses robots to pick, pack and send items that can typically squeeze inside a shoebox.

The fusion of robotics and smaller package sizes is putting a rocket under delivery times.

W23 has invested in the Sydney-based NP Fulfilment, a company started 20 years ago by entrepreneur Rodney Bartley.

NP is thriving in the fast fulfilment space where orders can be ready to ship within hours.

It operates across Australia and New Zealand with warehouses in Sydney, Melbourne, Perth and Auckland. NP promises same or next day delivery to 80 per cent of Australasia and largely deals in small items, such as toys and health and wellness products.

Woolworths chief executive Brad Banducci told The Australian that the supermarket giant began using NP Fulfilment when it recently launched its own online marketplace, HealthyLife.

Mr Banducci said he was excited about the opportunities and lessons that could be learnt as it witnesses an online shopping boom within its own Woolworths operations.

NP’s model could help to developing Big W’s online platform.

“Rodney Bartley is an amazing entrepreneur and has built this business since 2002, and there’s so many things we can learn from Rodney in the way he thinks about managing performance for small items,” Mr Banducci said.

“And so the learnings we can have for Big W and all the other businesses is material, he is an inspirational entrepreneur and we look forward to learning from him and we‘ve obviously invested and bought a minority stake in this business as part of that.”

Woolworths CEO Brad Banducci said the Woolworths start-up HealthyLife uses NP Fulfilment and he ‘loved what they did’.

Mr Banducci said the Woolworths start-up HealthyLife uses NP Fulfilment and he “loved what they did”, with NP Fulfilment in some instances able to pick, pack and send off goods to shoppers more efficiently than Woolworths can.

“And we just think there’s lots to be learned and they do it for a whole range of customers, including ourselves.”

The investment adds to the growing portfolio of start-ups W23 has invested in since it was established in 2019 to help Woolworths access innovation and technology to accelerate its own strategies. Investments include consumer brand builder Eucalyptus, online marketplace creator Marketplacer, alternative protein start-up Harvest B, and plastics recycling business Samsara. NP Fulfilment founder and managing director Mr Bartley told The Australian he began building the company from scratch.

“I’ve been doing this business for 20 years and built a business focused on initially the direct marketers,” he said. “Then over the period as e-commerce came on board I was kind of perfectly placed to take advantage of that opportunity.

“Over the last 13 to 14 years I started working on the software. I thought that if I controlled the software I could start plugging in different technologies without having to deal with licence fees.

“Over the last four or five years I started investing in warehouse equipment, technology, so vertical storage, robotic packing machines, conveyor systems.”

The speed of NP Fulfilment’s delivery times partly reflects the smaller package sizes it deals with.

“I focused on sending orders the size of a shoebox, not much bigger than that, that’s our specialty,” Mr Bartley said. “So what we figured out with e-commerce is that the average order has two to three items – give me two of this and one of those for example.

“We wanted to build everything fast … getting orders out the same day. Amazon was growing in the US, we were already doing something along those lines at that time, potentially shipping next day. I realised people would want somebody to ship it at least the same day or next day guaranteed, in a way.”

He said NP Fulfilment has more than 200 customers.

Its vertical storage systems in its warehouses means it can fit plenty of consumer products in a smaller space.

“Using these vertical storage systems we can store high density products into a very tight space. And again with our clients a lot of our clients deal with cosmetics, weight loss. vitamin supplements and apparel, so it‘s a lot of small stuff and we can actually use those vertical storage machines really well and have thousands of SKUs (stock items) in there.”

Originally published as Woolworths venture capital arm W23 invests in fast fulfilment company that promises lightening fast delivery for online retailers