Airstrikes Against the Pandemic
To our Valued Investors:
Earlier this year, our newsletter Zipline’s Critical Deliveries (January 20, 2021) introduced you to Zipline, an American startup that has been cutting its teeth in Africa. After converting his toy drone company into a leading delivery enterprise, founder Keller Rinaudo’s interesting choice of location came about through a combination of the excessive need and the regulatory permissiveness in the region. Zipline’s immediate positive impact on African lives quickly earned the attention, as well as the vocal and financial support, of enthusiastic philanthropists like U2 front man Bono. We explained that Zipline was routinely defeating the challenge of delivering critical medical supplies, blood transfusions, and medicines to otherwise hard-to-reach areas when every minute counts. The scenario we employed to illustrate how Zipline is saving lives was a situation in which a young woman engaged in a severely complicated labor is at risk of dying, even as she gives life, if a blood donation doesn’t arrive soon enough.
After our email was distributed, an example that would reflect a timelier representation of the world’s current state of affairs came to mind. With so many people learning about all the ins and outs of COVID-19 vaccination efficacy, availability, and characteristics, it’s no secret that the shots need to be in an “ultra-cold freezer”, and once removed from such an environment the clock begins ticking on how long the vaccine will remain effective. In densely populated cities, this requirement is no big deal, but for remote villages with unpaved and flood-prone road systems, the logistical planning needed to build up a supply of inoculations would become almost prohibitively complex. To overcome this challenge, a drone delivery system would neutralize the muddy road issue, and vaccine distribution would be further democratized with rural areas receiving their deliveries just as easily as urban locations. We really wished we had thought of that.
On second thought, perhaps it’s better that Zipline came up with the idea before we did. Last month, Zipline’s unmanned aircraft began dropping the new payload at the front doors of medical centers in the most remote places. The beneficial ripple effect is easy to understand. Any area kept “off-limits” as a result of insufficient byways would be the victim of a deadly problem that feeds upon itself. Without access to vaccination, a community is at risk of becoming a fertile breeding ground for a coronavirus. The only path to immunity would involve actually contracting the virus and praying for recovery. Meanwhile, those who merely happen to reside in a more developed municipality have the supreme benefit of finding safety in one or two shots to the arm. This kind of inequity has existed for centuries. It is why people in other parts of the world were threatened with illnesses like measles and polio long after those maladies were virtually terminated in our developed nation. The concept transcends political, cultural, and racial differences. It is simply a matter of respecting the human condition. An elevated exposure to a potentially deadly disease should never be the consequence of one’s place of birth, and Zipline is making impressive strides toward delivering equality.
The World Health Organization and the Vaccine Alliance are among the primary drivers behind COVID-19 Vaccines Global Access, or COVAX. The fundamental purpose of COVAX is not to blast out as many shots as possible, but to focus attention on underprivileged communities. Whether one admires or abhors the WHO’s practices and proclamations, this brand of humanitarianism is hard to argue against. To promote its mission, COVAX has already shipped 600,000 doses of an AstraZeneca / Oxford vaccine from Pune, India to Accra, Ghana. It is the first mobilization of many, as the goal is to provide an astounding two billion doses to otherwise underserved locations. Disbursement from Accra to the spiderweb of the poorest surrounding communities is then made possible by none other than Zipline. Commenting on the development, CEO Rinaudo said, “We are proud to be part of this significant milestone in Ghana where our drone logistics network is able to provide on-demand, last-mile delivery of COVID-19 vaccine at scale across the country. Not only does this make Ghana the world’s first country to deploy drones on a national scale for the delivery of COVID-19 vaccines but is also a giant effort in ensuring equitable access and enabling Ghana to fully utilize its healthcare infrastructure to deliver vaccines.”
While the importance of the life-saving results of Zipline’s efforts must always be recognized, there exists a business aspect, too. Zipline doesn’t operate exclusively in Africa, but it has also been deploying drones in the United States as well. Most visibly, Zipline began a pilot program of delivering medical supplies in North Carolina. Soon after, the company partnered with Walmart to augment their delivery of pharmaceuticals. As this practice evolves, most observers fully anticipate a transition into the transport of not only health-related but general merchandise from Walmart and other retailers to private residences. A pivot like this, clearly, would expand Zipline’s business dramatically. Already ahead of the pack, Zipline promises to be at the forefront of an industry about which futurists have been dreaming for many decades. Skeptics, at the same time, tend to point out that drone delivery services face hurdles with the Federal Aviation Administration (FAA). The agency’s Part 107 unmanned aircraft rule would seemingly obstruct large-scale operations. The truth of the matter, though, is that Zipline’s relationship with the FAA suggests a promising future. Last spring, when Novant Health wanted to employ Zipline for its delivery of COVID-19-fighting supplies in North Carolina, the FAA granted an emergency waiver of Part 107 after Zipline designed flight plans that avoided regional airports. By the end of 2020, the FAA was engaged in trying to establish a set of airworthiness standards that would permit companies like Zipline to freely operate. Underscoring the agency’s intentions, FAA director of Aircraft Certification Service Policy and Innovation Dr. Michael C. Romanowski said, “The development of airworthy, durable, and reliable unmanned aircraft is a crucial step forward for this innovative sector. Type certification will help increase both public and regulatory confidence in drone technology as operations become more advanced.” These do not sound like the words of a man who is intent on standing in the way of Zipline’s progress.
Perhaps the most ringing endorsement of a promising new enterprise is seen in the list of names investing in it. Zipline counts Andreesen Horowitz, Goldman Sachs, Google Ventures, Toyota, Stanford University, and United Parcel Service among its benefactors. A diverse group indeed, but take note of what kinds of interest seem to be at play. Such votes of confidence from the leading names in venture capital, engineering, and logistics should tell you everything you need to know. With such specialized and knowledgeable entities plunking their hard-earned dollars onto the table, Zipline seems likely to have a very bright future ahead.
Unfortunately for most investors, Zipline shares are not yet available to the investing public. It is a private company, but your friends at Iron Edge VC can put a piece of this promising unicorn squarely in your hands at a very attractive valuation before the masses drive the ticker skywards. If you would like to learn more, or if you know of anybody else who would, do not hesitate to contact us by clicking “Get in Touch” below.
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Paul Maguire, Managing Partner and The Iron Edge Team