Report: Most of Amazon’s $1 Billion Logistics Fund Remains Untouched

After more than a year, Amazon’s $1 billion logistics fund is reportedly 90% unspent.

The retail giant unveiled the Amazon Industrial Innovation Fund in April 2022, with the goal of investing in companies working to “incrementally increase delivery speed” and improve the experience of employees in the warehousing, robotics and logistics fields.

“These industries are inherently complex,” Alex Ceballos Encarnacion, Amazon’s vice president of worldwide corporate development, said at the time.

“With our scale, Amazon is committed to investing in companies that will ignite innovation in emerging technologies that can help improve employee experiences and safety while seamlessly coexisting with workforces across the supply chain, logistics and other industries.”

But so far, the fund has made just a few new investments and deployed approximately $110 million, The Wall Street Journal (WSJ) reported Monday (June 5), citing sources with knowledge of the matter.

According to the report, one of the things slowing the process has been disputes over which team — corporate development or the venture group managing the fund — had the ultimate decision-making power over which startups to fund.

In an email to PYMNTS, an Amazon spokesperson said the company’s corporate development oversees the fund and that the fund’s investments were on par with similar industry funds.

The WSJ sources said that meant deals fell through or were done with less-than-stellar terms, so that the fund lagged behind the usual pace of funds of its size for distributing capital.

An Amazon official told the WSJ the company disagrees with the notion that inside politics had impacted the fund, and said it was deploying funding at the same pace as the wider market, which has also slowed investing in recent months.

The news comes as both Amazon and rival Walmart are investing more in fulfillment and delivery capabilities.

Last month saw reports that Amazon had begun using artificial intelligence (AI) to spot damaged items before they are sent to customers, implementing the technology at two fulfillment centers with plans to add it to 10 additional locations.

The AI-tool is trained with photos of undamaged items so that it can identify damaged ones before diverting it to a worker who will double-check it. Locations without this technology have warehouse workers — who also pick and pack orders — check for damage.

Also last month, Walmart opened its second Market Fulfillment Center (MFC) powered by a proprietary storage and retrieval system.

The company’s MFCs are powered by Alphabot, a system that employs autonomous carts to retrieve items ordered for online grocery and delivers them to a workstation, where a Walmart worker checks, bags and delivers the order.

“This new order fulfillment system is truly game changing,” Ryan Simpson, store manager at the Bentonville location, said in a news release. “Not only does it enhance the customer experience through quicker, more accurate online order fulfillment, it also provides us the runway to continue growing our business now and in the future.”