Amazon to invest US$400 million in Kornit technology in next five years
05 October 2020: Fashion companies are moving online and to textile printing on demand. So, Kornit Digital signed an expanded agreement with Amazon that will triple its sales to the online retail giant. Kornit is engaging in big projects in response to significant demand, particularly in online channels, as revealed by Ronen Samuel, Kornit Digital’s CEO. A wide spread online media reports, quoting Kornit CEO indicate that Kornit is issuing two million new shares worth $124 million while a unit of Amazon, which owns 4.75% of Kornit, is selling 1.6 million of its shares for another $100 million.
Reportedly, Amazon is expanding its digital and on-demand printing capabilities after revising an existing agreement with Kornit. The media reports stated that over the next five years, Amazon committed to buying $250 million in existing Kornit products. These include digital printers and inks and $150 million in upcoming products. The deal was said to be USD400 million.
Amazon’s most of that capacity has gone toward its Merch by Amazon service, a print on-demand platform that enables sellers to create and sell custom apparel and other merchandise decorated and fulfilled by Amazon.
Israeli newspaper Haaretz reported that Amazon plans to use the new equipment to expand into housewares, sports equipment and textiles, including upholstery and bedspreads. The expanded printing capacity and product offering will allow Amazon to more easily flip the switch should it ever choose to.
Earlier, Kornit’s Avalanche 1000 was chosen for the on-demand production of promotional textiles as part of Amazon’s Merch by Amazon program. Reportedly, Amazon launched its first Merch by Amazon facility in 2015, followed by a second, 100,000 square foot facility in 2017. Later, it invested USD150 million in Kornit digital textile printers.
Amazon’s Texas-based facility has been a long-term Kornit user as part of Woot, which is an Internet based retail program that offers daily deals on products including printed textiles. This facility has utilized other Kornit direct-to-garment printing systems for several years.