Robot curbside delivery services seem to be stalling left and right, but one pioneer of the concept says it’s profitable and has now raised a round of funding to scale up to meet market demand. Starship Technologiesan Estonian startup that pioneered the robotic delivery space has raised $90 million in funding as it seeks to cement its position at the top of its class.
This latest investment round is co-led by two previous backers: Plural, the VC with roots in Estonia and London that announced a new $430 million fund last month. and Iconical, the London-based investor backed by Janus Friis, the serial entrepreneur who co-founded Skype and who also co-founded Starship itself.
It brings Starship’s total raised to $230 million, with previous backers including Finnish-Japanese company NordicNinja, the European Investment Bank, Morpheus Ventures and TDC.
As with previous rounds, Starship Technologies is not disclosing its valuation.
In the decade since it was founded by Friis and Ahti Heinla (Skype’s first engineer), Starship says its robots have traveled a total of 11 million miles around neighborhoods and campuses in about 80 locations in the U.S. and Europe, making 6 million traditions. Its partners/clients include companies such as on-demand transportation company Bolt, grocery chain Co-Op and food service companies such as Aramark, Sodexo and Chartwells and Grubhub.
Heinla — the CTO who was quietly reinstated as CEO in December — said the company will use the new funds to fuel more geographic expansion. It will also soon launch a new robot manufacturing project with a yet-to-be-announced partner to speed up production of its vehicles. and plans to continue investing in its software and logistics services. Her bots are currently running on Level 4very close to fully autonomous, they typically have 18 hours of battery life and are now being upgraded to charge wirelessly.
Heinla said in an interview that 6 million deliveries and 11 million miles driven make his startup essentially the biggest player in the space right now. But this statement must be taken in context.
Amazon, in 2023, made over 2 billion deliveries of Prime-based products to customers in the US alone: an example of how big the market potential can be, but also how small Starship is today.
On the other hand, it’s notable that Starship is around, and not at all profitable. The end of high-profile curbside delivery robot efforts by FedEx and Amazon, the restructuring at Nuro and issues we’ve heard about at other businesses all speak to the struggles of building operations in this space. Add to that a legal dispute that Starship’s investors were facing in the US to complicate matters.
To that end, Starship would not comment on why its previous US-based CEO, Alastair Westgarth, left the business late last year, but it appears that Starship is considering how best to move forward in its next phase. current market, with a shift to focus deeper in Europe rather than primarily in the US
“We’re not solely focused on the U.S. right now,” Heinla said. “What I can say is that I was the founding CEO. There was a change in the company and we wanted to position ourselves well for the future.”
Taavet Hinrikus, the Plural partner who was an early investor in Starship (and, like Heinla and Friis, also a very early Skyper) said the leadership change happened independently of the fundraising, but supported it.
“Building tech companies is hard,” he said. “You know, magic is about the founders, and here we have co-founders who are on a hellish mission to change the world.”
There is indeed a window of opportunity for Starship and the like. While self-driving cars and self-driving car services continue to be plagued by difficult concerns about the economy and safety of the unit, municipalities are adopting a wider range of mobility alternatives to help reduce traffic and pollution. Plus, it sounds like people are more likely to make room for the humble delivery robot that rolls slowly down the sidewalk.
“Unlike self-driving cars, I think our robots have always been accepted in communities,” Heinla said. “People really love them. You know, they’re trying to feed them bananas.”
