How Zipline Became a $1.2 Billion Drone Company

Last week, drone delivery service Zipline announced $190 million in new financing, bringing the company’s valuation to $1.2 billion dollars.  In the world of commercial drones – or any startup – that’s a big number, and a big achievement.  With drone delivery not yet fully implemented in most countries, how did Zipline make it?

Whenever Zipline comes up in conversation, I remember an interview I did with co-founder Keenan Wyrobek back in 2016 (Zipline had received $25 million in funding then and was launching their first program in Rwanda).  In that conversation, Wyrobek explained that the co-founders of Zipline didn’t start out as a drone company.  They started out to solve a problem.

“Our contract with Rwanda doesn’t even mention drones,” Wyrobek told me. “We’re couriers – drones were just the best way to solve the logistical problem of delivering supplies in that environment.”   Far from being a “solution in search of a problem,” as the saying goes, Zipline developed a solution around solving a critical problem for developing countries without an extensive ground-based transportation infrastructure.

It’s a significant point.  Governments who understand they are saving lives will adjust regulations to accommodate new technologies.  It’s in part the critical nature of the mission they perform that has allowed Zipline to grow so rapidly.

Since 2016, the company has expanded their reach and honed their offering.  They’ve done many things right – including developing centers of operation which are entirely staffed by local professionals and developing a delivery system that accomodates fragile payload without needing to land and negotiate the problem of the last 50 feet.  The proof is featured on the front page of their website – Zipline drones have completed more than 14,000 lifesaving deliveries.

Zipline’s achievements are worthy of note – and good for the drone industry as a whole.  14,000 deliveries are 14,000 flights proving that drone delivery can be done safely and efficiently: and that’s a message that can spread across continents.

The following is a Zipline press release.

INSTANT DRONE DELIVERY SERVICE ZIPLINE ANNOUNCES $190 MILLION IN NEW FINANCING

Will Help Support Zipline’s Global Expansion

Company Now Valued At Over A Billion Dollars

HALF MOON BAY, CA Friday, May 17th—Today, Zipline, the world’s first and only national-scale drone delivery service, announced it has raised $190 million in new financing, which values the company at over 1 billion dollars. The new funds will support the global expansion of Zipline’s lifesaving service across Africa, South Asia, Southeast Asia and the Americas and position the company to serve 700 million people in the next five years.

“There is a growing feeling around the world that technology is not benefitting the vast majority of people,” said Zipline CEO Keller Rinaudo. “The old conventional wisdom has been that building a successful technology company requires exploiting people’s personal information or hijacking their attention. Zipline wants to establish a new model for success in Silicon Valley by showing the world that the right technology company with the right mission and the best team can help improve the lives of every person on the planet.”

About The New Funding

Zipline’s business is funded from three streams: both government and business customers pay for the use of Zipline’s instant delivery service; key philanthropic partners help to support the establishment of new distribution centers in low and middle-income markets; and venture capital investment supports scaling the company’s team and technology.

Zipline has raised a new round of financing in two phases over the last year to help support efforts to scale its team and technology across the globe. In the Spring of 2018, Zipline raised $70 million from Katalyst Ventures, Baillie Gifford, GV, Temasek, Bright Success Capital, Goldman Sachs, Oakhouse Partners, Toyota Tsusho Corporation and the Design to Improve Life Fund.

The company also raised $120 million in the Spring of 2019, which included additional investments by Baillie Gifford and a new investor, The Rise Fund, a global Impact fund managed by TPG. Ballie Gifford and The Rise Fund were joined by returning investors Temasek, GV and Katalyst Ventures. The new funding places Zipline’s valuation at over $1.2 billion.

The new investors join some of the most respected investors in the world including Sequoia Capital, Andreessen Horowitz, Yahoo founder Jerry Yang, and Stanford University, who have helped to support Zipline mission to bring its life-saving service to every person on the planet. In total, Zipline has raised $225 million from investors since its founding.

The Global Problem

Access to vital health products worldwide is hampered by the last mile problem: the difficulty of supplying medicine from central storage to remotely located patients when and where they need it. In the U.S., this problem requires health systems to tolerate high medicine waste, expensive emergency trips, and sub-optimal care strategies. In far too many other areas, the same problem means that people in need of lifesaving care do not get the medicine they need to survive. Zipline’s medical drone delivery system is designed to eliminate this problem.

How Zipline Works

Zipline’s drone delivery service is dedicated to expanding healthcare access and saving lives around the globe. Health workers place orders by text message and receive their deliveries in 30 minutes on average. Zipline’s drones take off and land from Zipline’s distribution centers, requiring no additional infrastructure at the clinics it serves.

The drones can carry 1.75 kilos of cargo, cruising at 110 kilometers an hour, and have an all-weather round trip range of 160 kilometers. Each Zipline distribution center can deliver to an area of 20,000 km2​ ​, and typically serves 2-8 million people. Deliveries are made from the sky, with the drone descending to a safe height above the ground and air-dropping medicine by parachute to a designated spot at the health centers it serves.

Zipline’s Record To Date

Since launching its drone delivery service in Rwanda in October of 2016, Zipline has flown over one million autonomous kilometers. The company has made more than 13,000 deliveries, about a third of which have been in emergencies when someone’s life was on the line. Zipline now delivers more than 65 percent of Rwanda’s blood supply outside of the capital, Kigali.

In addition to its impact on lifesaving emergencies, Zipline’s just-in-time drone delivery service has helped transform the country’s medical supply chain. To date, this service has helped ensure that hospitals always have access to blood products, increasing the use of rare and specialized blood products by 175 percent and reducing waste and spoilage by over 95 percent. In December of 2018, the Government of Rwanda expanded its blood delivery partnership with Zipline by adding the delivery of 169 other critical and lifesaving medical products, like emergency vaccines, routine vaccines, and essential medical supplies. Zipline also launched a second distribution center in eastern Rwanda, allowing the company to provide lifesaving medicine to most of the country’s 12 million citizens within minutes.

In April of 2019, Zipline partnered with the Government of Ghana to launch the world’s largest medical drone delivery service. The revolutionary new service uses drones to make on-demand, emergency deliveries of 148 different vaccines, blood products, and life-saving medications. The service will operate 24 hours a day, seven days a week, from four distribution centers—each equipped with 30 drones—and deliver to 2,000 health facilities serving 12 million people across the country. Together, all four distribution centers will make up to 600 on-demand delivery flights a day on behalf of the Government of Ghana. Each Zipline distribution center has the capacity to make up to 500 flights per day.

The expansion of Zipline’s operations in both Ghana and Rwanda will increase the number of health facilities the company serves by almost 100x. In the last six months, Zipline has gone from one distribution in one country delivering blood to 21 hospitals to operating six distribution centers in two countries delivering more than 170 different vaccines, blood products, and medications to 2,500 health facilities serving close to 22 million people

Zipline’s Global Expansion in 2019 and Beyond

Zipline’s commercial partnerships with Ghana and Rwanda are expected to help save tens of thousands of lives over the next several years. Zipline’s goal is to serve 700 million people in the next five years. The company is hard at work catching up to demand to expand drone delivery services to developed and developing countries across Africa, South Asia, Southeast Asia and the Americas throughout 2019, including the United States. Zipline is working with the U.S. state of North Carolina to launch its medical drone delivery as a part of the U.S. Federal Aviation Administration’s (FAA) UAS Integration Pilot Program (UASIPP) in Q3 of 2019.

About Zipline

Zipline is an automated logistics company based in California. The company—which includes seasoned engineering and operations veterans from teams such as SpaceX, Tesla, Google, and Boeing—designs and operates an autonomous system for delivering lifesaving medicine to the world’s most difficult to reach places. Zipline’s mission is to provide every human on Earth with instant access to vital medical supplies. The most respected investors in the world support Zipline, including Baillie Gifford, Goldman Sachs, Sequoia Capital, Andreessen Horowitz, GV, The Rise Fund, a global Impact fund managed by TPG, Toyota Tsusho Corporation, Temasek, Oakhouse Partners, Yahoo founder Jerry Yang, and Stanford University.