Zipline raises $1.5 billion at a $21.5 billion valuation as Walmart signs on for 300 more drone sites

Zipline has raised $1.5 billion at a $21.5 billion post-money valuation, the drone delivery company said on Nov. 5. Paradigm, WCM Investment Management and Layer Global led the round, with Valor Equity Partners, Fidelity, Uber, Tiger Global, J.P. Morgan, ARK Invest and Salesforce Ventures joining. On the same day it announced a new multi-year national agreement with Walmart to launch 300 more delivery sites, on top of the 21 the two run together today, TechCrunch reported. That would make the network about 15 times its current size.

Walmart is the scale story. The numbers Zipline chose to lead its pitch with are about restaurants. At a group of its longest-standing restaurant partners, Zipline says its share of their delivery revenue rose from 10.8% to 34.9% between March and October, and that its orders made up 80% of a 26% rise in their delivery sales. That is a delivery marketplace taking share, and it puts Zipline up against the apps that restaurants already pay, even though one of them, Uber, is in the round and is targeting one million deliveries a day with Zipline by 2029.

Dallas-Fort Worth is the proof Zipline points to

Zipline says it has made more than one million deliveries in the Dallas-Fort Worth area this year, and that in October its median order arrived 19 minutes after checkout, against 30 minutes or more for traditional delivery; bakery orders took 10. Its Platform 2 home-delivery drone carries up to eight pounds within a 10-mile radius, according to TechCrunch. The company says it has flown 150 million commercial autonomous miles without a safety incident, and it will spend the new money on US manufacturing and hiring.

Walmart calls the expansion the largest retail drone delivery program in the country. "We see customers try drone delivery for the novelty and then continue to come back to it for the convenience," said Greg Cathey, its senior vice president for e-commerce fulfillment transformation.

The strongest objection comes from Zipline itself: it says the restaurant orders were incremental and did not cut demand on other platforms. If that holds at the 300 Walmart sites and in Uber's rollout, Zipline is adding a new kind of order, not taking existing ones from the apps.