Zipline raises $1.5 billion at a $21.5 billion valuation

Funding round and Walmart agreement

Paradigm, WCM Investment Management and Layer Global led the $1.5 billion round. Valor Equity Partners, Fidelity Management & Research Company, Uber, Tiger Global, J.P. Morgan, ARK Invest and Salesforce Ventures also participated, Zipline said.

The $21.5 billion post-money valuation is about 2.8 times the $7.6 billion valuation Zipline carried in January and more than five times the $4.2 billion figure Tech Funding News reported in May 2023. The January round was more than $600 million; a $200 million extension in March took the Series H to $800 million, according to TechCrunch.

Zipline said it will use the capital to expand US manufacturing facilities and hire workers as it builds a nationwide drone delivery network.

Walmart's 300 additional sites

Under a new multi-year national agreement, Walmart and Zipline plan to launch 300 additional drone delivery sites in the US, with potential to grow further. That compares with 21 active Zipline sites at Walmart today, and with the 66 stores Walmart counted across both its drone partners in May. The 300 additional sites are about 14 times the current active count.

Walmart said on 29 May that its broader drone program, which uses both Zipline and Wing aircraft, had passed one million cumulative deliveries across 66 stores in four states. Walmart has also said the program has completed more than two million deliveries across its broader operations. Zipline did not name the states or a start date for the 300 sites.

Zipline's Walmart business until now has run in one metro area, Dallas-Fort Worth, and from a hub in Pea Ridge, Arkansas, near Walmart's headquarters.

What the delivery network does today

Zipline's home delivery service uses Platform 2 aircraft, which carry up to 8 pounds over a 10-mile radius. The larger Platform 1 flies up to 120 miles round trip for enterprise, business and government work.

Zipline said it made more than one million deliveries in the Dallas-Fort Worth metroplex alone this year. In October, the median Zipline order arrived 19 minutes after checkout, compared with more than 30 minutes for traditional delivery, according to figures Zipline published. A cohort of its longest-tenured restaurants saw Zipline's share of their delivery revenue rise from 10.8% in March to 34.9% in October. Those restaurants reported a 26% increase in delivery gross merchandise value, with about 80% of the growth from Zipline orders. Zipline chose the cohort and did not disclose how many restaurants it includes.

Zipline also said it introduced sound-optimized flying and a next-generation aircraft that flies higher and carries heavier payloads over longer distances. Zipline gave no specifications or date for the aircraft.

Uber target and scale

Uber, an investor in the round, is targeting one million Zipline deliveries a day by 2029 through Uber Eats. Zipline says it completes one delivery every 20 seconds worldwide, or about 4,320 a day. The US-only target needs roughly 230 times today's global rate. Zipline puts its lifetime total at more than 2.7 million deliveries over about a decade; at a million a day, it would repeat that history every 65 hours.

DroneXL reported that the constraint is not software. It is how many aircraft and docking sites Zipline can stand up, and how many towns will host them.

Safety and regulation

Zipline says its aircraft have logged 150 million commercial autonomous miles without a safety incident, up from 125 million in January. It says its medical operations save more than 14,000 lives a year, up from the more than 10,000 it cited then. The company has held Part 135 air carrier certification from the Federal Aviation Administration since 2022, which authorizes long-range commercial drone deliveries.

The FAA's proposed Part 108 rule, which would make beyond visual line of sight flight routine instead of waiver by waiver, was listed as pending review at the White House regulatory office on 5 November, DroneXL reported. The final rule reached that office on 10 July. Zipline already holds BVLOS approval in all 50 states, earned one exemption at a time, DroneXL said.

What is still unknown

Uber has not disclosed the size of its Zipline stake, and declined to give financial details when Reuters asked. Zipline has not said how many jobs it will add or which factories it will expand.