In the wake of a global health crisis and disrupted supply chains, hospital systems have had to reconfigure how to deliver care to patients within their homes. One tried-and-tested solution, CEO Keller Rinaudo says, is Zipline, his instant logistics startup that uses autonomous airplanes to deliver vital emergency medical products such as vaccines and blood packets across the African countries of Ghana and Rwanda.
Zipline announced on Wednesday that it has raised $250 million in a series E round, raising its funding to $486 million in total and catapulting the company’s valuation to $2.75 billion. The funding round was led by new investors including Fidelity and Intercorp alongside existing investors including Baillie Gifford, Temasek, and Katalyst Ventures.
Rinaudo and CTO Keenan Wyrobek founded Zipline in 2013, the same year Jeff Bezos announced Amazon’s plans for drone delivery. The robotics software entrepreneurs saw an opportunity in the essential medical supply market, partnering with hospital systems and governments instead of transporting retail goods directly to consumers.
“We focused on serving rural hospitals and health facilities. It’s easier to get regulatory approval. The impact is really high because the need is really high,” Rinaudo tells Forbes.
Eight years later, the drone delivery industry is crowded with tech giants such as Amazon’s Prime Air and Alphabet’s drone delivery service, Wing. Those technologies are still being developed and companies are working to obtain type certification from the Federal Aviation Administration.
Outside of U.S. airspace, Zipline now delivers 75% of the national blood supply in Rwanda and has conducted 15,000 life-saving emergency deliveries, according to the company. Through partnerships with hospital systems such as Novant Health in North Carolina and the Ministry of Health in Ghana, the startup also delivers supplies to 2,500 hospitals and started delivering Covid-19 vaccines in rural areas in Ghana when they became available. “Ghana was ranked the most prepared supply chain in Africa to receive it and so they were the first African country to receive Covid-19 vaccine,” Rinaudo says.
The new funding will allow the company to scale its distribution system and delivery efforts with new partnerships in neighboring African countries and across the U.S. The company recently announced a partnership with Pfizer to design and test an end-to-end model to deliver COVID-19 vaccines in countries where Zipline operates. In September 2020, the company teamed up with Walmart to create a delivery drone launch site at its Bentonville, Arkansas headquarters.
“It’s a pretty amazing paradigm shift,” Rinaudo says. “Most people think that advanced technology is going to start in the U.S. and then trickle its way out to these other countries. But that is not what we’re seeing. At least with certain kinds of technology it’s quite the opposite.”
By operating in Rwanda and Ghana without any safety incidents, Zipline was able to bring thousands of hours of safe flight data to the FAA’s table prior to their approval. “That way the FAA doesn’t have to play guessing games,” he says.
It hasn’t been a flight without turbulence. Zipline engineers have had to modify and update the design of the drones and the accompanying infrastructure several times. Designing vehicles that can withstand extreme weather conditions such as dust storms and lightning is only part of Zipline’s evolving technology. The company has built preflight checks, a communications architecture and a universal air traffic management system among other supportive technologies. “The vehicle is only 20% of the complexity of what we do,” he says.
Zipline is cost comparable with other modes of transportation, Rinaudo says. “If you have a sense for what it would cost to get an Uber or Lyft, then you already have a sense for around what this costs. Generally it’s way less expensive than people think,” he says.
The funding round is indicative of widening and essential applications of drone technology and softening of public’s sentiment towards the industry overall, says Michael Blades, an aerospace defense analyst at Frost & Sullivan.“The regulators are more willing to work with drone operators. The public sentiment, especially in the wake of COVID-19, for drone use has sort of softened,” Blade says.