Zipline hits $21.5B valuation as Walmart expands bet on drone delivery

Zipline has raised $1.5 billion and ramped up its partnership with Walmart, a pair of deals that have raised the autonomous drone delivery and logistics startup's profile and valuation.

Zipline and Walmart reached a new multi-year agreement to add 300 drone delivery sites across the United States. The two companies have had a drone delivery agreement since 2021, but this deal is a significant jump from the 21 active drone delivery sites they have together today.

On the fundraising side, Zipline's $1.5 billion raise was led by Paradigm, WCM Investment Management, and Layer Global, with participation from Valor Equity Partners, Fidelity Management & Research Company, Uber, Tiger Global, J.P. Morgan, ARK Invest, and Salesforce Ventures. Zipline is now valued at $21.5 billion.

The company, which has developed a drone delivery ecosystem that includes aircraft, launch and landing systems, and logistics software, said it plans to use the funds to expand its U.S. manufacturing facilities and hire more workers to build out a nationwide drone delivery network.

Founded in 2014, Zipline got its start in Africa, where it used its autonomous drones to deliver blood in Rwanda, and later expanded to Ghana and Nigeria. The California-based company began its first operations in the U.S. in 2020, ferrying medical equipment and supplies to Novant Health in North Carolina. The following year, it struck a deal with Walmart.

But it was in 2022 that Zipline's business really started to take off in the United States. Zipline received its Part 135 air carrier certification from the Federal Aviation Administration that year, a critical regulatory hurdle that authorized the company to complete long-range commercial drone deliveries. It has locked in a number of partnerships since then, including with Uber earlier this year.

Zipline now uses its drones to deliver food, retail, agricultural, and health products in five African countries, several cities in the United States, and Japan. Zipline's home delivery service uses Zipline's Platform 2 drones, which are designed to carry up to eight pounds and travel to customers within a 10-mile radius. Its larger Platform 1 drones are used for long-range deliveries for enterprise, business, and government that can cover 120 miles round trip.

The company said Thursday that its share of delivery revenue grew from 10.8% to 34.9% between March and October of this year. This latest funding aims to push that metric even higher.