Investors Put their Faith in Drone Delivery Startup

The hopes of drone delivery startup enthusiasts may have dampened over the last holiday season as none of the presents got delivered by unmanned aircraft systems despite strong assurances by Jeff Bezos.But investors still seem to be hoping against hope, it appears!

It was announced by Flytrex, a drones logistics company that it had succeeded in raising $7.5M in Series B funding in a round led by Benhamou Global Ventures (BGV) with additional investment from btov. The latest funding is expected to be used for boosting up the company’s operations and technology.

Flytrex is renowned for coming up with a full operational drone delivery system in Iceland in 2017. Established in 2013, the company expanded its operations to Reykjavik and has also launched its services in North Dakota as part of its gold course drone delivery system. The company is planning to launch its operations in North Carolina in 2019.
You must be wondering how the Flytrex’s drone delivery services work.

Instead of banking on drone landing pads and having the drones to make contact with the ground, the company’s patented “In-Air” wire-drop system makes use of a tethered cord that lowers the package to the ground after the customer confirms on the company’s smartphone application that they are in position in the vicinity.

The company aims to target small and mid-sized retailers who are vying to compete against the e-commerece leaders with their own drone delivery systems such as Google’s Project Wing and Amazon’s Prime Air.Most of the companies have failed miserably in transforming drone delivery services into a viable business venture. Flirtey is known for its first ship to shore drone delivery, first FAA sanctioned drone delivery to a customer’s place and the first urban drone delivery. However, the company is yet to carry out any large scale drone deliveries.

Amazon also spoke big of its drone delivery to a home in Cambridge, U.K. but at present, its drone delivery service caters only a couple of customers. Google’s Project Wing delivered Chipotle burritos to college grads in Virginia but those drones did not cover a long distance.

But if those hurdles can be overcome and drone delivery companies can scale up their operations, they could become extremely viable financially according to research carried out by Skylark research. It could cost $1.74 per trip for a $2,000 drone flying for 50 hours each week. A conventional last mile trip via car or foot costs $2.50 according to the research.

Flytrex has been chosen in the FAA’s drone pilot program alongside Zipline which is another startup that is currently employing drones to deliver blood to hospitals in Africa and Matternet that also delivers hospital supplies to developing countries.

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