Flytrex Raises $40M to Expand Drone Delivery Across the U.S.
The company's 2021 fiscal year revenue was $100,000, says cost per delivery will be less than $1.50.
Drone delivery startup Flytrex announced today that it has raised a $40 million Series C round of funding led by BRM Group with participation from OurCrowd, Lukasz Gadowski (Founder and Chairman at Delivery Hero) along with existing investors Benhamou Global Ventures (BGV), btov, and BackBone Ventures. This brings the total amount of funding raised by Flytrex to $60 million.
Flytrex is emerging as a leader in the nascent drone delivery space here in the U.S. The company started piloting drone deliveries in Iceland back in 2017, but leveled up in September of 2020 when it started testing drone grocery deliveries for Walmart in Fayeteville, North Carolina. Flytrex recently launched its third drone delivery station in North Carolina and is delivering meals from restaurants like Just Wings, Chili’s and Maggiano’s from the Holly Springs Towne Center. The company also conducted drone delivery from El Pollo Loco in Orange County, California earlier this month.
The company said it will use its new funds to expand delivery across the U.S. and add more retail and QSR partners.
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One interesting bit about today’s funding announcement is that OurCrowd, an equity crowdfunding platform, is an investor. Flytrex is currently running a crowdfunding campaign on OurCrowd where it’s looking to raise $3.9 million. Zippin also did this same investment+crowdfunding with OurCrowd earlier this year. We reached out to Flytrex to find out more detail about how the crowdfunding fits into this Series C, and will update when we hear back.
As part of that equity crowdfunding campaign, Flytrex shared some information about itself including:
Revenue for fiscal year 2021 is $100,000
It has signed deals with eight “national chains”
Walmart will be expanding drone deliveries to 50 locations by end of year 2022
Additionally, from the Flytrex crowdfunding campaign:
Flytrex generates revenue through $5 delivery fees. Each drone delivery currently costs the company $12.57. As they expand geographically and reach a larger customer base, Flytrex projects the cost of each delivery to decline to $6.58 by 2023 and to only $1.14 by 2025. Achieving an economy of scale, Flytrex will generate a net profit of $3.86 per delivery. With these high profit margins, Flytrex reports that it expects to become profitable by 2024. After achieving profitability, their revenue is projected to increase dramatically. Flytrex currently has three operating stations located in the state of North Carolina. They are hoping to increase this number to 70 by 2023 and 484 by 2025
One of the reasons Flytrex is being so aggressive is that it has been working closely with the Federal Aviation Administration over the past three years. Tight restrictions around flight paths and air travel is a big hurdle for drone operators to overcome (around the world) before such deliveries can go mainstream.
According to today’s press announcement, “Flytrex participated in the Federal Aviation Administration’s UAS Integration Pilot Program (IPP) which concluded in October 2020, and continued in the FAA’s subsequent initiative, BEYOND, to work with the North Carolina Department of Transportation to help tackle the remaining challenges of UAS integration.” The company expects to receive approval from the FAA to operate in the rest of the US by the end of Q1 2022.
Drones are steadily moving from flights of fancy to very real delivery options around the world. Earlier this week Manna said that it had expanded drone deliveries to a second city in Ireland.