Zipline: Delivering the Future
The Company that Delivers Products from the Sky Using Drones
Amazon is one of the successful consumer companies that bet on drone delivery very early on. Jeff Bezos introduced the idea of Amazon Prime Air, a drone delivery service in 2013 because he claimed that more than 86% of Amazon’s products weigh 5 pounds or less. And the notion of delivering those lightweight products through 4,000-lb gas vehicles was so ridiculous.
Drone delivery was the solution, to achieve:
Same day, fast delivery (under 30 minutes)
Reduce operating costs
Reduce dependencies with partners
Amazon officially launched the service in June 2022. However, things have not been going as expected, only delivering a few hundred products each year through the service. The reason? It’s largely due to the regulatory compliance, technical challenges, and operational inefficiency.
But then, there is Zipline, a drone delivery company that has flown over 100 million commercial autonomous miles, made 1.5+ million deliveries, and operates in more than eight countries so far.
This makes you question: What did Amazon do wrong? It’s hard to give one straight answer. But it’s very clear that Zipline succeeded at the thing Amazon failed at. And truth be told, Zipline was not inspired by Amazon, nor did it have the same approach. Zipline did the right thing by taking a different approach, which made it successful.
This essay will explain what Zipline is, what it does, how it works, its founding story, what made it successful, its business model, and its impact on humanity. There are many drone companies, but Zipline is the one that’s worth your attention.
Let’s dive in!
What is Zipline
Zipline is a logistics and technology company that designs, builds, manufactures, and operates the world’s largest automated on-demand delivery system. They specialize in using autonomous electric vehicles (Zips and drones) to deliver blood, vaccines, medicines, and now consumer products like food and groceries.
Here’s Zipline’s mission statement:
Zipline is on a mission to build the world’s first logistics system that serves all people equally. With operations in eight countries across four continents, and more than 100 million commercial autonomous miles flown to date, Zipline is transforming access to healthcare, consumer products, and food.
Zipline originally started delivering blood and medical products in Rwanda in 2016 and has since expanded to food, retail, agriculture products, and animal health products. Zipline has two platforms — one for long-range delivery and the other for precise home delivery. To date, we’ve delivered to thousands of homes, hospitals, and businesses in the US, Rwanda, Ghana, Nigeria, Cote d'Ivoire, Kenya, and Japan.
Our customers rely on Zipline to save lives, reduce emissions, increase economic opportunity, and provide new logistics services at scale.
This means instead of relying on humans to deliver the product (as we usually do today), Zipline builds and delivers its partners’ product through autonomous electric drones. These drones are super fast, super safe that deliver the package within 2-30 minutes.
The Humble Beginning
Before founding his second company, Zipline, Keller Rinaudo Cliffton was running his first company, Romotive in the early 2010s. It was a company that’d make small toy-like robots powered by smartphones. They had raised several million dollars, had around 20 employees, and had shipped a couple of thousand units.
Things were working decently, but Keller knew that he wasn’t born to build those silly toys. He realized he was never going to make an impact he wanted to make doing that. He wanted to solve bigger problems and impact/change people’s lives, at scale.
In Keller’s words:
“The more I thought about it, the harder it was to justify expending my energy on a consumer robotics product that probably wasn’t going to work that well… Robots in the home are a notoriously tough space to crack, and I felt that there were bigger problems I wanted to solve, bigger questions I wanted to answer. There is a joke in robotics that once a robot works and does something well, you don’t call it a robot anymore — you just call it the thing that it does, like a dishwasher. I didn’t see us getting to that place with Romotive.”
Keller, by profession, was a Harvard-trained biophysicist. While he was building and running his company, he met a guy, Keenan Wyrobek, a Stanford Robotics Pioneer who had built early Medical Robots and co-founded the Stanford Robotics Lab. Both having a similar interest in robotics, they quickly became friends and started exchanging ideas on what they could do together.
Keller was already thinking of trying something new, and Keenan was also exploring his next adventure. As they were thinking through ideas, they got to know that in countries like Rwanda, people die just because of the unavailability of blood and vaccines. Delivering the necessary supplements would take so long that the patient dies before they reach.
They learned that the infrastructure was far behind, roads were unpaved, and the technology wasn’t there to help people living in rural Rwanda. They didn't see an opportunity, they saw a real-world problem they thought they could solve by doing something they were already interested in—Robotics.
They whispered, “What if we just build drones that’d deliver the necessary items the patient needed in like 30 minutes or something, and save lives?” It was never the intention to make money or become famous. They genuinely thought of building something they love doing in the first place.
Now of course, they could’ve chosen the e-commerce space in the US. But they didn’t do it because they didn’t see an urgency there. Also, they were unsure if they could fight the regulatory compliances, as the US was already a developed country.
But by taking a different approach, solving a massive pain, they at least knew their success rate was much higher. People dying in Rwanda genuinely needed a quick delivery service. The country being small with no hard regulatory compliances, the government seemed supportive, making it easier for the founders to get government approval.
But this was just the idea phase, they had yet to execute on the idea.
But guess what? Keller was already running his first company, and to kick off this new project, he had to lay off Romotive’s employees, pay back investors, and let go of the company, as he did.
After ~3 years of running Romotive, Keller shut down the company in January 2014, and two months later, in March 2014, he co-founded his second company, Zipline with the guy he met, Keenan Wyrobek, and another guy, William Hetzler, who was previously working at Romotive.
They had already done some research on where they were going to launch the operation and what the model would be. They started working on the company, but it wasn’t officially launched yet. They quietly built and manufactured the infrastructure, tools, hardware, and software they needed. While they were doing this, they talked to the Rwandan Government about how they could solve the problems people living there had. Rwanda has had a good track record of testing and experimenting with new technologies to help its citizens in the past, so they agreed.
As a result, Zipline signed a deal with Rwanda.
Two years of quietly building, manufacturing, establishing the infrastructure, testing the software and drones, training the models and data, Zipline officially launched the operation in Rwanda in 2016, started delivering blood, medicines, and vaccines to hospitals and dispensaries in remote areas. What would once take 2 days to reach was suddenly available in 30 minutes.
Within the first year of launch, the company was already serving 21 hospitals within a radius of 40-50 miles from the distribution center. And more interestingly, that number has gone up to 5,000 hospitals, made more than 1.5 million deliveries, and operates in 8 different countries, including the US and Japan so far.
On top of that, today Zipline doesn't just deliver blood and healthcare products, they have expanded their market to ecommerce and groceries, delivering food items, physical small goods, and agricultural products. It’s a way bigger company than it was in 2016.
How Zipline Works
The interesting thing about Zipline is that it doesn’t build, manufacture, or own the products it delivers to people/customers, which makes its (business) model so fascinating. Because in reality, Zipline is a teleportation company that works as a middleman for buyers and sellers.
Here’s how Zipline works:
First, it’s important to know that just like SpaceX, Zipline also builds, manufactures, develops, and operates most of the necessary components in-house. They build aviation standards, software, hardware, distribution centers, they do weather modeling, fleet coordination, and cloud-based order management—all by themselves.
They have two types of Platforms:
Platform 1
Platform 1 is the original system that Zipline launched in Rwanda in 2016. It uses a fixed-wing drone that can fly up to 100 miles round-trip at high speed up to 70 mph. The drone carries a small package up to 4 pounds, and parachutes drop them to designated delivery sites.
These Zips are launched by a catapult and caught by a wire system at the distribution hub. Platform 1 is primarily optimized for speed and high-volume, long-range deliveries to health sectors in remote areas.
Platform 1 distribution hubs are located near the medical warehouses to make the work easier and efficient. As soon as health facilities, hospitals, and pharmacies place orders on an app or phone, the system processes the order and prepares the medical payload, and launches the drone immediately. Once the product is delivered, the Zip returns to the distribution hub where it’s caught by a wire system.
Platform 2
Platform 2 is a modern type of Zip that is designed to deliver products in urban and suburban areas. This model works extremely well for food deliveries, e-commerce items, etc. But instead of dropping the packages by parachute, Platform 2 uses a small autonomous “Droid”, suspended from a hovering drone.
The drone flies to its delivery location, hovers around 300 feet in the air, then lowers the droid to a tether to gently place the package on a doorstep or table.
How does the system work? Platform 2 has a different distribution system, where they get installed near the restaurant, stores, hotels, warehouses, or whoever needs them—in order to use the Zipline service. As soon as someone orders, the supplier puts the package in that droid and lets the drone do its magic.
The biggest difference between Platform 1 and Platform 2 is in user experience. Platform 1 is about coverage and reliability. Platform 2 is about convenience, precision, and scalability in developed markets like the US.
Business Model
Unlike Airbnb, Uber, or DoorDash, Zipline does not make money directly from the people/customers it delivers the products to. For instance, when you Airbnb a hotel, the company directly makes money from you, when you Uber a car, the company directly makes money from you.
You see what I mean?
But that's not how Zipline makes money. Instead of generating its revenue through the general audience, it makes money through its partners that provide services to their customers. So for example, when you order something from Sweetgreen (a partner of Zipline), Zipline doesn't directly make money through you, even though it delivers the package to you. Instead, it makes money through Sweetgreen.
Zipline does long-term multi-year contracts with companies and organizations, worth millions of dollars. For example, Zipline has partnered with Walmart, GNC Live Well, Panera Bread, Sweetgreen, the Ministry of Health Rwanda, etc.
Since the company is privately held, there isn’t much data on how much revenue the company is generating, what its ARR is, etc. But what we do know is that the company is valued at $4.2 billion, has over 1300 employees, and roughly makes between $500-$780 million annually.
Bear Case
Zipline is doing fantastic, but it still has the bear case that may disrupt its growth, profit margin, and market share. Let’s explore a few of them:
#1: While Zipline has proven that it can operate complex drone logistics in countries like Rwanda and Ghana, replacing the same thing in a developed country like the US is hard. Things like FAA approval, air traffic integration, privacy concerns, and local politics can restrict the market expansion and slow the company’s growth.
#2: Vertically integrated companies are brutally capital-intensive. Zipline builds its own drones, distribution hubs, software, weather forecasting system, etc, which quickly burn money, leaving the company unprofitable. Acquiring customers in a new market means the company needs to invest millions of dollars upfront to get the partnership going.
#3: Zipline is doing well, but it also has some heavy competitors like Google’s Wing, Walmart, and Amazon’s Amazon Prime Air—all thinking about drone deliveries. These companies have huge capital, talent, and data, they just need to execute right in order to get Zipline out of the box.
But till then let the Zipline rocks!
Impact Creation
Besides everything, I want to touch on the impact Zipline has made on humanity by saving people’s lives living in poor countries like Rwanda, Ghana, Nigeria, etc. We should all appreciate and show gratitude for the existence of Zipline.
Here’s what Zipline says about its impact creation:
Our Zips have traveled more than 80 million autonomous miles to make more than 1.3 million deliveries of medical supplies, agricultural products, and other goods across the world.
We’ve lowered maternity mortality rates, increased vaccination coverage, boosted agricultural productivity, and more — all while helping create hundreds of local, high-skilled jobs and helping communities combat the effects of climate change.
With millions more people to serve, we’re only just getting started.
More from the Zipline website:
A study in The Lancet, showed that Zipline’s service resulted in a 67% reduction in blood wastage across Rwanda.
A Bill & Melinda Gates Foundation funded study found that vaccine stockouts are 60% shorter at Zipline-served facilities than facilities not served by Zipline.
A study by researchers at Wharton, found use of Zipline’s logistics and delivery system led to a 51% reduction in Rwanda of in-hospital maternal deaths due to postpartum hemorrhaging.
A study by the Ghanaian Ministry of Health and Zipline found a 56% reduction in maternal deaths in Northern Ghana, along with secondary benefits including decreased emergency visits, increased referrals, and perceived improvements to healthcare access from both patients and providers.
Zipline serves more than 5,000 hospitals and health facilities across the world.
Globally, Zipline has delivered more than 20 million vaccine doses.
Thank you, Zipline. Believe it or not, we need more companies like Zipline, not to increase the GDP or economy, but to save human lives. The fertility rate is going down, while the mortality rate keeps going up. It’s time to reverse that by doing something Zipline does. Money follows when you do good things in the world. That’s your lesson, founders.
Thanks for reading, catch you on the next one.