SAN FRANCISCO - Serve Robotics Inc. (NASDAQ:SERV), an autonomous robotic delivery company, has announced the acquisition of assets from Vebu Inc., a provider of automation and robotics solutions for the restaurant industry. The all-stock deal, for which financial details were not disclosed, aims to expand Serve's automation offerings beyond delivery to include kitchen operations.
The acquisition allows Serve to offer a more comprehensive suite of automation solutions, including the Autocado, a robotic system designed to streamline avocado processing in restaurant kitchens. Currently being tested at Chipotle (NYSE:CMG)'s Huntington Beach location, the Autocado enables staff to load avocados and leave the machine to handle the cutting, coring, and scooping, freeing up employees to focus on customer service and other tasks.
Buck Jordan, Vebu's founder and CEO, is set to join Serve as Senior Vice President of Kitchen Automation, bringing his expertise from founding Miso Robotics to the table. Jordan's role will include leading Vebu's team and further developing the Autocado, as well as driving new product innovations.
Serve's CEO, Dr. Ali Kashani, expressed enthusiasm for the acquisition, highlighting the potential to address labor shortages in the restaurant industry through robotics and AI. Kashani underscored the strategic value in expanding partnerships with national restaurant chains.
The acquisition is expected to create synergies by leveraging Vebu's existing partnerships, such as with Chipotle, to strengthen Serve's relationships with other enterprises like Shake Shack and 7-Eleven. Additionally, Serve's recent collaboration with Alphabet (NASDAQ:GOOGL)'s Wing Aviation subsidiary to expand delivery services complements this move, positioning Serve as a significant player in restaurant industry automation.
Serve Robotics, spun off from Uber (NYSE:UBER) in 2021, has been developing AI-powered, low-emission sidewalk delivery robots and has completed tens of thousands of deliveries. The company holds scalable multi-year contracts, including an agreement to deploy delivery robots on the Uber Eats platform across various U.S. markets.
Vebu joins Serve with a solid financial foundation, supporting operations to complete its pilot with Chipotle and reinforcing Serve's long-term strategy to lead in restaurant automation. This information is based on a press release statement.
In other recent news, Serve Robotics has received a Buy rating from both Ladenburg Thalmann and Seaport Global Securities, with price targets set at $16.00 and $12.00 respectively. The companies forecast substantial revenue growth for Serve Robotics, stemming from its ambitious expansion plan to deploy an additional 2,000 robots in 2025, which is expected to generate revenues estimated between $60 and $80 million.
Serve Robotics has also unveiled its third-generation delivery robot, designed for increased efficiency and safety, and is set to enter service in 2025. The company has secured approximately $35 million in private placement transactions facilitated by Aegis Capital Corp.
The company has fostered strategic partnerships, including one with Wing Aviation LLC for integration of ground and aerial autonomous technologies, and another with Shake Shack Inc (NYSE:SHAK). for food deliveries via Uber Eats in Los Angeles. Recent developments also include an expansion into Koreatown, Los Angeles, and an upgrade to its robotic fleet's sensors through an agreement with Ouster, Inc.
Euan Abraham has been promoted to Chief Hardware & Manufacturing Officer, while Sarfraz Maredia and David Goldberg have been elected as Class I directors. Lastly, Serve Robotics has solidified its partnership with Magna International (TSX:MG) (NYSE:MGA) through an exclusive contract manufacturing agreement.
InvestingPro Insights
Serve Robotics Inc.'s (NASDAQ:SERV) acquisition of Vebu Inc. aligns with its growth strategy, as reflected in recent InvestingPro data. The company's revenue growth is particularly noteworthy, with a staggering 732.06% increase in the last twelve months as of Q2 2024. This substantial growth underscores the potential of Serve's expanding automation offerings in the restaurant industry.
However, investors should note that despite the impressive revenue growth, Serve Robotics is currently operating at a loss. The company's operating income margin stands at -1788.83% for the same period, indicating significant operational costs. This aligns with an InvestingPro Tip suggesting that analysts do not anticipate the company to be profitable this year.
Another relevant InvestingPro Tip highlights that Serve Robotics holds more cash than debt on its balance sheet. This financial position could provide the company with the flexibility needed to integrate Vebu's assets and further develop technologies like the Autocado.
For investors seeking a deeper understanding of Serve Robotics' financial health and growth prospects, InvestingPro offers 13 additional tips, providing a comprehensive view of the company's position in the competitive robotics and automation sector.
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