Bain Capital partner Ajay Agarwal scored a 26x return backing early warehouse robots
Bain Capital Ventures backed robotics startup Kiva Systems in 2004 with no revenue.
The short version
- Amazon bought Kiva 8 years later for $775 million.
- Look at supply chain and hardware costs for your business.
- Cheaper sensors and advanced AI are driving down automation costs across industries.
Why it matters to you. For business owners, the lesson is that hard problems and physical infrastructure are drawing the smartest builders away from crowded software markets.
Back in 2004, when Silicon Valley investors were chasing software, Ajay Agarwal of Bain Capital Ventures made a contrarian bet on a robotics startup called Kiva Systems. Kiva had no revenue, no finished product, and no customers when Agarwal met cofounder Mick Mountz.
Instead of making warehouse workers walk aisles, Mountz pitched bringing shelves to the workers using robots. Agarwal convinced Bain's partners to invest after connecting the team with Don Ralph, who ran North American e-commerce fulfillment for Staples, for due diligence. Staples became Kiva's first customer, and high-profile brands like Zappos, Gap, and Zara followed.
Eight years later, Amazon, the retail giant run by Jeff Bezos, bought Kiva Systems for $775 million, generating a 26.6-fold return for Bain Capital. Now, according to Fortune, Agarwal sees a golden age for physical AI as hardware components get cheaper and smarter.
Robotics and physical AI startups raised $27.6 billion across 1,009 deals in 2025, more than double the previous year, according to PitchBook figures. Cheaper smartphone and electric vehicle parts have helped drive down the cost of robot sensors and cameras.
Figures as reported by Fortune.
