Zipline raises $1.5 billion, reaching a $21.5 billion valuation

Walmart plans 300 additional drone-delivery sites with Zipline

Drone startup Zipline raised $1.5 billion in fresh funding, more than doubling its valuation to $21.5 billion, according to The Wall Street Journal. The South San Francisco, Calif., company said it will use the capital to expand U.S. manufacturing facilities, increase hiring and build a drone-delivery network spanning the country.

Walmart said Thursday that it was expanding its existing partnership with Zipline. The companies are working together to launch 300 additional sites under a national multi-year agreement.

CEO Keller Cliffton, who co-founded Zipline in 2014, said the company’s newer U.S. commercial operation has taken off. Until just a few months ago, Zipline was targeting an eventual increase to one million drone deliveries a day; three or four customers now each want that volume, Cliffton said. Uber Technologies signed a deal with Zipline in August to facilitate drone deliveries for takeout, grocery and retail orders on its Uber Eats platform.

“I think people have suddenly realized that teleportation-level logistics, where you can get whatever you need in 10 to 15 minutes, is a really big deal,” Cliffton said.

Zipline’s valuation stood at $7.85 billion earlier this year. Cliffton said the new valuation showed that autonomous delivery had gained wider acceptance among investors and commercial partners. “It’s an inflection point,” Cliffton said in an interview. “It sort of happened overnight, and suddenly it’s totally normal.”

Cliffton compared Zipline’s rise to Waymo’s rapid rise in San Francisco. Drones, he said, once felt like science fiction but were now increasingly seen as the backbone of how cities will function.

The latest funding round was led by Paradigm, WCM Investment Management and Layer Global. Valor Equity Partners, Fidelity Management & Research Company, Uber, Tiger Global, J.P. Morgan, ARK Invest and Salesforce Ventures also participated.

Zipline started by delivering blood and medical supplies in Africa. The company says that business helps save more than 14,000 lives a year and is now growing faster than ever, according to Cliffton.

Zipline currently operates in three U.S. states — Texas, Arkansas and Ohio — and plans to launch soon in Arizona. The company will expand its U.S. manufacturing facilities and ramp up hiring as it builds the nationwide delivery network.

Zipline recently rolled out capabilities designed for quieter flying. The company has also been working to allow its drones to fly higher and carry heavier orders over longer distances. “Zipline is an engineering company at its heart,” Cliffton said. “We focus on improving every single part of the service.”

Other companies are also developing commercial drone delivery. Alphabet’s Wing unit works with restaurant, retail and healthcare partners. DoorDash is developing its own drones, ground infrastructure and digital systems, while Amazon has an in-house drone division offering delivery in select U.S. markets.

For now, Cliffton said, Zipline remains focused on persuading partners to replace traditional delivery by car and truck rather than on competing with other drone operators. “The market is early enough that we really focus on the default,” he said.

Cliffton said Zipline’s work remained far from over. “We now have these giant partners betting on Zipline to build out fundamental infrastructure for the planet,” Cliffton said. “We have experience doing that, but still, this is a different scale and it’s going to be hard.”