The urgency of the COVID-19 pandemic may be in the past, but the need for fast and safe ways to ship valuable, fragile medicines and their components around the world is still quite important. SkyCell has developed hardware and software to make this transportation process better—and greener, it says—than before, and has now raised significant capital to continue expanding its operations.
The Swiss startup closed Series D at $116 million, which it will use to double down on partnerships with companies operating in Asia, and US-based Tybourne Capital Management and CCI are raising a combined $59 million, on top of the $57 million SkyCell raised from the M&G purpose-driven private equity investment strategy, Catalyst, last year. Prior to this Series D, the company had raised about $133 million.
This latest investment was made at a higher valuation than the 2023 tranche, and SkyCell is now valued at $635 million, the company told TechCrunch.
We first covered the rise of SkyCell during the COVID-19 pandemic, when the world suddenly focused on the fragility of certain vaccines that must be kept at specific temperatures to prevent them from spoiling.
The startup actually existed for years before that: It was founded in 2012 in Switzerland, when Richard Ettl and Nico Ros were tasked with designing a storage facility for a large Swiss pharmaceutical giant. The executive overseeing the project thought that Ettl and Ros’s work could be applied to shipping containers, and thus SkyCell was born.
It turned out that SkyCell’s system was perfect for vaccines: The company uses “smart containers” powered by machine learning and software to maintain strict temperatures, humidity levels and vibration levels. He has also created a software logistics system called ‘SkyMind’ to transport drugs around the world on behalf of their manufacturers.
The demand for safe drug transport has only grown and SkyCell has grown by 50% annually over the past several years. Its customers today include pharmaceutical companies as well as a large network of cargo partners that transport these items.
SkyCell says it now moves about $2.5 billion worth of pharmaceuticals and ingredients a month — including hundreds of millions of doses of vaccines, cancer treatments, diabetes drugs and diagnostic treatments.
Ettl, the startup’s CEO, credits the company’s traction to the simple fact that more products have come to market and there are more people in the world who need them. But, he added, the need has actually become more complicated for another reason: decarbonization.
“Six months ago, we had a feeling this was going to happen,” he told TechCrunch. It is estimated that pharmaceutical companies — including the production, packaging and transportation of drugs — are responsible for 4.4% of global emissions, and this has become a major problem for the industry.
“First, it was optional for pharmaceutical companies,” Ettl said. “Now it’s clearer: everyone had to make commitments to decarbonize their supply chains.”
That has served SkyCell well, Ettl said, as the startup has wanted to help reduce the carbon footprint of air travel “for almost a decade.”
The company’s containers are, on average, about half as heavy as those of its competitors, “which means 50% less CO2.”
As an example of how this can affect the bottom line, Ettl estimates that for a large pharmaceutical company, it would cost about 2% of sales to “go green” — to significantly reduce the carbon footprint of one or the other sector. (this articlewhich explains how Bayer’s move to more sustainable packaging would cost it 2% of its sales explains how this is done.)
“When you look at the percentages, it’s not much. But in absolute terms, we’re looking at a billion dollars in costs. So when that billion can become $500 million, people start paying attention.” He said two of SkyCell’s biggest customers are mandated to reduce CO2 emissions. “So using us has become part of their key decision criteria.”
The company’s containers and logistics software are still its core products, but interestingly, Ettl said it unexpectedly also found itself selling components of its products to customers. For example, SkyCell is selling one of its smart thermometers, which it developed for its containers, to a pharmacy customer.
“With its leadership in hardware, software and tracking platforms, SkyCell is well positioned to become the technology partner of choice for the global pharmaceutical industry well beyond its current cold chain logistics business,” said Bosun Hau, MD of Tybourne. “Global supply chains are becoming increasingly complex, and risk management is a boardroom issue for almost every sector — for pharmaceutical companies, in particular, it is critical to getting lifesaving medicines into the hands of patients. SkyCell has developed an integrated state-of-the-art system combining hardware, software and big data analytics that is transforming a pharmaceutical logistics industry that has seen little innovation in recent decades.”
