Zipline Raises $600M+ at $7.6B Valuation | CEO Keller Rinaudo Cliffton

[00:00] It is a crazy time to be building this technology. You know, Zipline has now crossed 140 million commercial autonomous miles, which makes it the largest commercial autonomous system on Earth, ground or air. We just closed over $625 million, which is going to accelerate our expansion both in the United States and outside the U.S. We are now saving about 17,000 lives a year. We're going to go from serving about 5,000 hospitals and health facilities to over 20,000 hospitals and health facilities in the next 18 months. Of all of the deliveries that we've done in the United States, [00:30] in the last 30 days. Now that I understand the history of Tesla, the Roadster, like the idea was, oh yeah, we're gonna use an off the shelf battery pack, and we're gonna put it in a Lotus Elise chassis, and we're gonna have a good car. Turned out Roadster wasn't a very good product. It was enough though to demonstrate what could be done. We started building these prototypes, using all these off the shelf parts. It was expensive and unreliable. Once you automate these kinds of services and make them less expensive and safe, people will be consuming them multiple times a day. That 10X increase in the size of the market is the difference between companies that are being built [01:00] versus companies that are built that are worth trillions of dollars. [01:11] - Keller, welcome to Sorcery. - Thanks. - Thanks for having me in your really cold, huge, [01:17] enormous drone factory. - Yeah, we probably should have given you a warning to maybe bring a jacket, but there is like, yeah, there's no central heating in here, so. - It's okay, I actually did get a warning because we were supposed to go to the cattle ranch too, so it's like, I think that it was like 60 degrees or 40 degrees, it was 40 degrees. - Yeah, the factory's warmer than the test site. So this is, yeah, this is zipline light. - I'm a little upset though, because I really want to see the cows.

[01:41] I mean, Zipline is probably one of the few startups in the Bay Area that would give you access to cows. So I think you're missing out. I heard you've advanced the strength of these drones so much that you can now pick up a cow. [01:54] Not sure who you heard that from. [01:58] So you just delivered to them? [02:00] We do, yeah. I mean, so [02:02] When we were originally building the company, we wanted engineering, manufacturing, and flight tests to all be in the same place. And so we ended up... [02:10] renting a huge amount of land, [02:13] which was like an active cattle ranch. And we ended up building our original offices there. We did all the initial design for these aircraft. We actually manufactured the aircraft in a little double wide [02:25] you know, trailer that we installed there, and then we would fly. And so it was the case, it was always basically competing with cows, like they would often, like break into our test site and eat stuff, like cows will eat anything, they'll eat string, they'll eat metal, it's kind of crazy. So [02:40] Yeah, we're no strangers to competing against cows. And they like the deliveries. Yeah. [02:45] They don't, they honestly, they don't really notice. It's pretty funny because, yeah, exactly. A lot of the original... [02:51] delivery sites we would do, we'd just be delivering next to these cows, they would just be eating. [02:57] Yeah, we didn't startle them. [03:01] Wonderful. Okay, so we have some really big news today that we need to address [03:05] Can you share this latest funding announcement? Yeah, I mean, [03:09] You know, we, Zipline just closed over $625 million, which is going to accelerate our

[03:17] expansion both in the United States and outside the US. The big thing that happened last year is that the [03:23] international part of Zipline's business, particularly the life-saving work that we do in Africa, grew incredibly fast. [03:30] uh, [03:31] are now saving about 17,000 lives a year. We're going to go from serving about 5,000 hospitals and health facilities to over 20,000 hospitals and health facilities in the next 18 months. [03:40] We had almost no operations in the US at the beginning of last year, and we have now expanded to the point where ZipLine actually does more deliveries in the US than it does in the rest of the world combined. So that grew really fast and we're expecting that business to grow. [03:52] by more than 10x this year again. And so really the fundraising is designed to position ziplines so that we are ready from a capex, from a manufacturing, from an operations perspective to add a lot more metros over the coming years. [04:07] I've [04:08] you know, four quarters. And what was the process like? You have some pretty notable investors. We've interviewed Alfred. [04:13] He had some good words about Zipline. [04:16] I think it's interesting, you know, Zipline spent a decade working on something that everybody thought was stupid and nobody was interested. It really took a highly contrarian investor like Alford. [04:27] or like A16Z or like Google Ventures, some of the early funds that bet on Zipline, [04:32] to believe in us at all because we were never part of like the hype cycle. There was never, you know, in very much the same way that like [04:38] Tesla or SpaceX. It was never like there was an investing [04:42] you know, hype cycle where the hypothesis was like cars or rockets. [04:46] That wasn't a thing while those companies are being built. Zipline has also never been in the hype cycle or in the limelight in that way. We've just had this really clear conviction that

[04:54] automated logistics is inevitable and that someone's going to build one of the biggest companies on earth. [04:58] focusing on making logistics universally accessible to everyone. [05:02] and [05:03] I [05:04] And we spent 10 years really building in [05:07] Uh, [05:08] in parts of the world that people weren't even looking at, people weren't even really clear if Zipline was a real business, [05:14] sort of look more like a nonprofit since we're focused on healthcare logistics. And it's really only in the last year that I think suddenly a lot of these big [05:20] public investors and crossover investors are looking at this industry realizing like, whoa, wait a minute, like this is [05:27] an inevitable transformation, that we are going to go from using humans driving [05:32] cars that weigh 4,000 pounds and burn gas. [05:36] to a world where we're gonna be using [05:39] vehicles that weigh 50 pounds and are electric and autonomous. [05:43] Yeah, I think that transformation is going to result in a lot of disruption, but it's also going to be incredibly good for [05:51] people not just in the US but outside the US who maybe don't have access to reliable logistics today. [05:57] So who are the investors you raise from? [05:59] The largest investors in this round were Fidelity Capital Group, [06:03] Bailey Gifford, [06:05] Um, [06:06] Valor [06:07] and [06:08] Tiger. [06:10] It's a good group. [06:11] Yeah, I mean, we're definitely, you know, we're honored. I mean, we still have a lot more work to do. And the reality is actually, you know, ZipLine, [06:18] normally doesn't even really talk about our financing rounds because interestingly like it's kind of one of them it's like the least interesting thing that zipline does uh

[06:25] Maybe for some companies, that's like the most exciting thing in any given year. But for Zipline, you know, we're focused on saving lives. We're launching new metros. We're building all this infrastructure. We're adding all these new use cases. [06:36] I... [06:37] Yeah, so generally from a fundraising perspective, it's more like [06:41] you know, business as usual. [06:42] The $625 million round, I would assume you've raised a boatload of money in the history of Zipline. So if this is at any point in the lifecycle, I hope that it is [06:56] a level of [06:58] achievement and [07:00] you know, a milestone that you can look on and be like, oh my gosh, like now we're at a critical point. We're almost at [07:06] 2 million deliveries, like you just entered the US, now you're experiencing [07:11] rapid growth, like it's pretty amazing. [07:14] I mean, it is a crazy time to be... [07:17] building this technology. You know, Zipline has now crossed 140 million commercial autonomous miles, which makes it the largest commercial autonomous system on Earth, ground or air. [07:26] We are now serving 5,000 hospitals and health facilities globally. [07:31] The company saves about 17,000 lives a year, and the majority of those are moms and kids. When you look at the statistics, we've been able to reduce maternal mortality by 51% or more in a lot of the countries that we operate. [07:43] by making a lot of products just instantly available. [07:45] at every single hospital and health facility. [07:48] Um, [07:49] So, [07:50] Yeah, I think that [07:53] The other really crazy thing to realize is that of all of the deliveries that we've done in the United States,

[07:58] More than half of them were done in the last 30 days. [08:01] Wow. [08:02] So it's like, you know, the system is we are fully in the vertical part of the curve. You know, we set a goal. [08:09] in terms of [08:10] number of flights per day at the end of last year, we ended up beating that goal by more than 60%. I mean, the system is scaling faster than we ourselves expected. And I think that that is a sign, uh, [08:22] that after 10 years of kind of working in obscurity, [08:25] it's suddenly sort of the world just shifts and it's like, oh, wait, this is now inevitable. And everybody thinks this is the future and everybody wants to be at the forefront of it. [08:33] I can't help but go back to Alfred's point. So he was talking about all the different kinds of investments he's made and things that he's learned and the principles. [08:43] and he noted zipline for [08:47] the capital P pivot versus the lowercase p pivot. So could you just talk about that shift, like that dramatic shift and how you had to reorient and now you're building out vertical integration and doing all this crazy stuff? [09:00] Yeah, I mean, I think, you know, when we started building this company, I mean, I was 23 years old. We were totally clueless. We had no idea what we were doing. Alfred ended up... [09:09] being our first institutional investor investing in the company [09:14] And I kind of went to him at that time. [09:17] We were building [09:18] all kinds of different solutions, but none of them were really working. We knew that we were really interested in robotics, and the more I learned, the more I kind of concluded that we should really go focus on logistics. The problem was,

[09:29] We wanted to build an autonomous logistics system that could deliver 10 times as fast, half the cost. It was very obvious we should build something that could fly and that could deliver from any [09:37] store or restaurant or hospital or primary care facility directly to homes. [09:42] That was illegal. [09:43] And so I think that was probably the nature of my disagreement with Alfred. I was like, Alfred, I have a good idea. Let's go do something that's illegal. And he's like, I don't know if it's a good idea to go do something that's illegal. Cali, like, can we, you know, pick a business? [09:53] model that is legal. [09:56] And of course, you know, the whole [09:57] The whole crazy conversation around that was like, "Okay, well then we're gonna go to somewhere where it is legal." [10:02] I think that this [10:04] naivete that I probably had when I was 24 to be like, oh, well, if it's illegal in the US, we can just go to some developing [10:10] country where we can work more closely with the government and [10:14] We can rewrite the rules and we'll demonstrate it there first. I think that probably sounded insane. [10:19] to Zipline's investors at the time. [10:22] But luckily, you know, Alfred was willing to sort of like sit down and just observe [10:27] the process play out, [10:29] And in retrospect, that was the right way to do it. Because Zipline, by virtue of going and partnering with a couple other governments that were like highly, highly motivated to solve problems with us, we were able to [10:38] set new regulatory precedents. [10:40] And then after [10:41] achieving over 100 million commercial autonomous miles with zero safety incidents. We were able to bring that data to the FAA [10:48] and get unprecedented regulatory approvals in the US. [10:51] I just don't think we would have been able to get. [10:53] if we operated in an ivory tower in the US, like waiting for a regulator to [10:57] Just give us permission. [10:59] Because you have such a unique perspective on global healthcare,

[11:04] What? [11:06] is the current state, like what should people know that they might not know about it? And how does that reflect on society in America today? I think the biggest observation we've made over the last 10 years is that people are really confused about [11:21] what is actually going to solve these problems 100%. And it's not actually that dissimilar from the fact, you know, you can look at like, how do we solve homelessness in California? And I think there's a lot of people who are like, [11:31] It must need more money. We should put more money into it. [11:34] But then you look at the data and you're like, oh wow, San Francisco is spending $100,000 [11:39] per year. [11:41] going into NGOs that are supposed to be addressing homelessness [11:45] Sorry, $100,000 per homeless person. [11:48] per year. [11:48] - Wow. - $100,000, yeah. I think the budget is almost a billion dollars. It's almost a billion dollars for around 10,000 total homeless people. And every year, [11:58] Yeah, exactly, it's like a starting salary. We're spending $100,000 per person per year, and we aren't achieving the results we want, because homelessness isn't going down. [12:06] very good analog to global public health care. [12:09] the USAID was spending $41 billion a year. [12:14] And we've been spending that kind of money since 1970 when USAID was created. [12:18] And yet, you know, [12:19] people who are paying attention would probably ask the question, [12:22] "Okay, we do all this aid in all these countries, why do they all vote against us in the UN?" [12:27] That's a totally legitimate question to ask. It's like, yeah, why are they? It doesn't seem like it's really working in terms of building alliances or kind of like more closely connecting these countries. The reason is that we aren't listening to these countries. These countries have been telling us for a decade that they want trade, not aid.

[12:43] They're sick of low quality services provided by NGOs for free. Those services engender dependence and frankly, they prevent economic growth in these countries. [12:51] What they want instead is [12:54] technology, entrepreneurship, and high paying jobs. [12:57] if they want to be leapfrogging their economies into the future, they want to be [13:02] They want to be growing. [13:03] and in general achieving sustainable independence. [13:09] And, um, [13:10] That's exactly what the US could offer. That is exactly the opposite of what we've been doing from a global public health care perspective over the last [13:16] 20 years. We've been building exquisite systems built through cost plus contracting, [13:22] with NGOs and government contractors. [13:25] and [13:26] yeah, the results speak for themselves. We've made some progress on some metrics, but we are [13:31] No. [13:32] we're decades away from actually achieving the goals that we want to achieve. [13:35] Zipline has always had this attitude that the only way that we're really going to solve [13:40] global problems like [13:43] whether it's [13:44] childhood malnutrition or maternal mortality or access to commodity [13:48] medicine [13:50] only way you're really going to do that at scale is through capitalism, is through [13:54] companies that are actually focused on [13:57] improving the [13:59] uh, [14:00] efficiency of those systems over time. [14:03] And that means you've got to get away from cost plus contracting and you've got to go toward [14:06] uh, [14:08] you know, competitive markets. [14:10] that are actually going to provide these services. Why is there not, you know,

[14:13] uh, [14:13] a FedEx or a UPS that can handle a lot of this logistics. Why do we rely on [14:18] these bespoke healthcare logistics [14:21] supply chains that are built by NGOs. [14:24] it doesn't make sense. And so I think that there's a huge transformation happening, which is that countries are starting to be in control of their own budgets, [14:31] That's a big change that the State Department has made over the last year. It's putting the countries in control. It's saying, "What do you want to spend money on?" Those countries increasingly are going to want to buy [14:39] advanced technology, they want to buy AI, they want to buy robotics. [14:42] And that's going to be an amazing outcome for the US, because making sure that as all these developing economies are building and accelerating, if they're doing that, [14:50] in partnership with US AI and robotics technology. That's going to make the world safer. It's going to make those countries richer. [14:55] And it's going to [14:56] secure US technology and leadership. [14:59] technology and manufacturing leadership for the decades to come. [15:02] Sorcery is brought to you by Brex, the financial stack trusted by more than 30,000 companies, including one in three venture-backed startups in the U.S. Nearly 40% of startups fail because they run out of cash. Brex is literally built to help founders avoid that. Unlike traditional banks that let your money sit idle, shipping away at it with fees, Brex is designed to help you spend smarter and move faster. [15:32] powerful account. You can send and receive money globally at lightning speeds, get 20 times the standard FDIC coverage through their partner banks, and even high yield from day one. With same day and even same hour liquidity, access your funds anytime. Companies like Scale AI, DoorDash, Service Titan, HIMSS, Anthropic, Flexport, Robinhood, and Plaid trust and use Brex.

[16:02] - Sounds like your expansion into America is going pretty well. I've heard that you're doing so well that you're going viral on TikTok all the time. You had to cut your marketing budget. You have no marketing budget now. [16:16] Yeah, it's true that we had to basically shut off all marketing. That happened in June or July. Basically, you know, [16:24] Thank you. [16:24] It's a tricky thing trying to build this capacity and keep up with customer demand. And we thought we had an idea of how often customers would order because we can look at like, [16:33] the normal delivery platforms, and we have a sense for how often customers order via those platforms. [16:37] The crazy thing that we are observing is that if you make delivery [16:41] 10 times as fast, less expensive, way better [16:45] product experience. [16:47] because it's safer, quieter, etc. [16:51] And on top of all of that, you remove the guilt of like someone driving a 4,000 pound gas combustion vehicle that's creating tons of pollution for your neighborhood. [16:58] Um, [16:59] If you make all of those improvements, people [17:01] consume the service a lot more. And so we have, you know, I visited a grandma in Dallas a couple of weeks ago who's ordered from Zipline 350 times in the last year. - Oh my gosh. - Yeah, this woman I think is like 79, 80 years old. She's like living in the future. I mean, she, you know, she was emphasizing it's like, [17:15] Every single day, it's like, "Oh, what does she want to make for dinner tonight?" "Okay, here are the eight or ten ingredients she needs." Boom. She can have them delivered in five minutes. [17:22] or [17:24] You know, she has a grandson coming over and, you know, is going to, and he wants certain things. [17:29] She could just go to her app, click, get everything she needs for the next two days. She was kind of emphasizing that she still grocery shops once every one or two weeks.

[17:37] But but then all of the fill ins [17:39] can just be done via this automated system that saves her hours and hours of time that she just gets to spend with her loved ones, instead of worrying about getting into a car and fighting for a parking spot and walking into a retail store and trying to buy everything. [17:52] So, [17:53] I [17:54] Yeah, and that's not just one person. Like on average, we're seeing customers ordering [17:59] Um, [18:00] with way higher frequency than the normal delivery apps. And I think that this [18:06] I... [18:07] is sort of like it's an insane observation just that like [18:11] we need to prepare for actually [18:13] 10 times [18:14] the size of the total instant delivery market today, we actually think that the total size of that market is 10 times. [18:21] what we're observing today. [18:22] It's just that the market today is highly inconvenient. It's incredibly expensive. It makes people feel guilty. In many cases, it's unsafe. [18:30] When you solve those problems, people are going to make this part of their daily lives. [18:35] For people that don't know, what are the typical products that they can order? Do you have any partnerships with people? [18:42] Yeah, Zipline works with amazing global brands like Walmart, Chipotle, Sweetgreen, Mendocino Farms, [18:49] Wendy's, Buffalo Wild Wings, many, many others. We also this year are launching our healthcare business in the US. We're partnered with folks like Cleveland Clinic and Ohio Health and Michigan Medicine and many others. [19:00] um... [19:01] All of this is really just enabling teleportation from their [19:05] stores, restaurants or

[19:07] health facilities directly to homes. [19:09] So we actually got a text the other day from someone who was like, "Oh, it was late at night. [19:15] My two-year-old was feeling terrible, had a terrible fever. I was freaking out trying to figure out, like, am I going to really [19:20] get this kid into the car and like buckle them in and drive to the local pharmacy and wait in line and try to and then [19:26] She thought, "Oh wait, never mind, zipline." And they deliver [19:29] pharmacy now from Walmart. She got on, ordered exactly what she needed. It was delivered less than 10 minutes later. [19:34] gave it to the kid, kid felt better, went to sleep, she got sleep that night. She wrote us this long email the next morning being like, [19:39] you have no idea how game-changing it is to have access to this kind of a service that just feels [19:44] It feels [19:45] like a different thing. And these kinds of services today, with most of our partners, we're operating something like 16, 17 hours a day. [19:51] Outside the US, we operate 24/7. We expect to soon be operating 24/7 in the US. [19:56] These kinds of systems are going to feel more like the internet. [19:59] uh... then [20:01] like UPS. [20:02] We're very used to like logistics, oh yeah, it works like in these hours and it's kind of like hard to schedule and it's more like you always inconvenience yourself to be home to receive the thing rather than it coming when you want. [20:14] These new kinds of services, it's like fully on demand. It works around your schedule. You tell us where you want it delivered. You tell us the 60 second window. We will always deliver it in that 60 second window and it'll operate 24/7. [20:24] I have two [20:26] - Thoughts on this. One, I'm a huge fan of FedEx, because I love their printing Go services. [20:32] you should start Print and Go. [20:34] Remind me what PrintingGo is. It's just you send a file to the printer, because I like to print out paper. Got it. And so I go to FedEx all the time, and I just print out, I get...

[20:43] printout paper. Yeah. So it'd be so cool if Zipline handed me my printouts. I think it's, you know, there are a lot of new kinds of technology where people probably haven't even [20:53] For example, 3D printing is a really cool example where, and in fact I think a lot of like UPS, I think UPS and FedEx both now operate these like 3D printing [21:02] hubs where they can then overnight things like mechanical engineers or startups that may you know need parts but they don't necessarily want to buy the whole 3d printer that's another area where instant logistics is gonna it's like that's like the print and go of the future you know you're just like oh you know what like i want [21:16] this object or I want this part. [21:19] I think the very clear implication here is it's like, cool, so you just like instantly send the file, 10 minutes later it's delivered to your doorstep. What's the craziest thing someone's ordered? It's funny, we now deliver almost 100,000 SKUs for a Walmart super center of I think the 110,000 to 120,000 total SKUs in that store. So we deliver almost everything. People order Legos, people order rotisserie chickens, people order birthday cakes, we [21:44] everything so uh yeah i think it's all [21:48] A lot of times people are ordering like eggs, you know, like a dozen eggs. You almost think like, oh, they're trying to test us to see if we can deliver that. [21:57] It's everything. That's what blows my mind, including prescriptions. We deliver prescriptions for them. And in fact, the vast majority of people signing up and receiving those prescriptions had never placed a [22:09] prescription with that pharmacy before. [22:12] So that's like another really cool thing that we're observing, which is that like all these partners who are working with ZipLine,

[22:17] these kinds of systems create demand, especially with the next generation. Because, you know, [22:23] increasingly [22:24] Next generation probably doesn't, you know, they may not own cars, they don't drive nearly as much, they definitely don't want to like inconvenience themselves and drive to a parking lot and go into a store. They're like living on the apps. And so to a certain degree, autonomous logistics is just an inevitable extension. [22:38] of that. It's that like, yeah, you should just be able to pull out your phone, whatever you need, [22:42] Put in your basket, click order. [22:45] Face ID, Apple Pay, it's going to be delivered in 10 minutes. [22:48] high demand for GLP-1s. [22:50] Yeah, I'm sure we do deliver GLP-1s. So we're in the height of this new hardware renaissance. [22:57] You know quite a thing or two about it. [23:00] What are your biggest learnings [23:02] of vertically integrating and manufacturing yourself versus China. [23:07] You know, Zipline, when we got started, we [23:10] thought that we were going to buy all these different components from different off the shelf providers. And we kind of thought, oh yeah, we can just be like the final integrator. Interestingly, now that I understand the history of Tesla, exactly how Tesla started, the roadster [23:24] Like the idea was, oh yeah, we're gonna use an off-the-shelf [23:26] battery pack and we're gonna put it in a Lotus Elise chassis and we're gonna have a good car. Turned out Roadster wasn't a very good product, right? They sold like a thousand of them. [23:34] It was enough though to demonstrate what could [23:38] could be done. And Zipline, very similar, you know, we started building these prototypes using all these off-the-shelf parts and it was just, it was too expensive and unreliable.

[23:48] we started to understand, like, okay, the only way we can design flight computers, electric motors, motor controllers, [23:54] GPS modules, all of these things had to be [23:59] rebuilt with this specific application in mind. [24:03] One of the hard things about drone delivery is that [24:06] People think, oh, the drone industry, it's like already a big industry. [24:10] There are [24:12] you know, tens of millions of [24:14] like two to three pound quadcopters being manufactured in China, which is something that flies [24:18] 20 to 30 minutes and hovers and then [24:20] takes pictures and then lands. [24:23] And there are predator drones being built by [24:27] military contractors and those cost 50 to 100 million dollars a piece [24:31] There is absolutely nothing in the middle when you think more automotive grade. Like, what if you needed something that was [24:37] that would last, you know, [24:38] tens of thousands, hundreds of thousands of cycles, being able to operate in all different weather conditions, [24:45] and be hardened to those conditions, but also had to be super cost effective because it's competing against cars. So there's this kind of like middle ground of like automotive quality and cost that is completely unexplored and unbuilt in this market of drones. [25:00] Zipline had to go and one by one rip out component after component after component. I mean, as we walk the factory floor, you'll get to see so many of these sub assemblies, so many of these core systems. [25:12] We were at first outsourcing, we have now insourced. We now design it from scratch ourselves, and we even in many cases manufacture that component here

[25:22] instead of somewhere else. [25:23] So yeah, I think this level of vertical integration [25:28] It was inevitable both because [25:31] the overall industry ZipLine was operating in was just so [25:35] non-existent but it's also kind of inevitable because of the pace of development like we are you know right now we are launching new generations of aircraft every 9 to 12 months you'll get to see [25:45] the line behind us is building an aircraft that we just started building three weeks ago. That aircraft is [25:50] like tremendous performance improvements relative to the last version. It will last [25:55] Uh, [25:56] several multiples longer in terms of total lifetime cycles, it's also half the cost. [26:01] relative to the aircraft that we were building last year. So we're in this mode of exponential progress from the hardware perspective, but that also means that everything is iterating and evolving. And generally you want engineering and manufacturing [26:14] co-located. [26:15] You need manufacturing engineers, mechanical engineers, even software engineers to be able to sit on the line. [26:20] with the manufacturing team. [26:23] I, [26:24] to make sure that you're actually building a good product and that product can be built efficiently. [26:29] Turing is training the next generation of AI with tasks that require real expertise and real world judgment. That's why companies like NVIDIA, Anthropic, Salesforce, and Gemini partner with Turing. Turing builds realistic reinforcement learning environments and data systems based on real operational traces. The kind of infrastructure frontier labs need to train superintelligence. Visit Turing.com slash S-O-U-R-C-E-R-Y.

[26:59] if not a lot of interviews with the defense tech sector which has a different kind of payload but [27:04] For you, have you gotten any demand or interest from that sector for buying any of the drones? [27:11] Yeah, all the time. I mean I think interestingly this is an area where [27:16] because of the nature of the market, [27:19] the commercial progress that's being made technologically is [27:22] is [27:24] exceeding the military progress that's being made in this area, probably by like [27:28] an order of magnitude. [27:30] So these systems, and by the way, you see that in Ukraine where it's like the vast majority of those [27:34] drones that were being used. [27:36] they're basically commercial drones with like slight modifications you know where you put c4 on them [27:41] Um, [27:42] It's the same thing is happening here, where the military is also going to want access to autonomous logistics. I think in the long run, [27:49] It's just 100% the case that the military should be buying commercial solutions rather than trying to create their own kind of like exquisite [27:55] bespoke, [27:56] solutions to that problem because [27:58] um, [28:00] commercial market is so big, there's so much capital available to improve [28:04] all the main components of the technology [28:07] that the military no longer has to do this in a one-off way. [28:11] Right now, ZipLine is so completely overwhelmed with demand on the commercial side that we're doing one thing and one thing only. It's all we have time to focus on. ZipLine... [28:20] is going to scale to a million deliveries a day over the next couple of years. And that is going to require [28:26] us to continue that rate of like 15% week over week growth

[28:29] for another several years straight. And that's [28:32] So we're not currently looking to like add more use cases or add more demand to the system. Demand is not the right limiting factor. [28:39] we're going to be supply constrained, massively supply constrained for the next two years straight. - Okay, you might need an extra billion dollars if that's [28:47] coming up the pipeline, but not for now. [28:50] Yeah, I think building this kind of infrastructure, it's capital intensive. We're going in and we're literally... Think of sort of the way Tesla had to build the supercharger network across the US. ZipLine is doing something that's not totally... [29:02] dissimilar. Like we're going in, we're building, charging infrastructure. It's just for [29:07] aircraft rather than for cars. We're building this charging infrastructure in these key parts of these metros so we can operate the service at metro scale. You know, we just announced our next couple metros. We're launching Houston and then Phoenix over the next three to four months. And then we're going to begin launching multiple metros every quarter thereafter. So, you know, the company is in the middle of [29:24] massive expansion and [29:27] I think that [29:28] Although hardware companies are capital intensive, [29:31] It's also the case that I think most of the most valuable companies that are going to be built over the next decade are going to be combinations of hardware and software. Those companies usually have [29:38] immense competitive advantages. It's the reason that [29:42] It's so important that the US [29:44] rebuild its manufacturing base and not forget how to build things in the real world. [29:49] So what is the business model behind this and typical payback on a new location? Yeah, ZipLine's business model is really simple. I mean, we're, you know, we, uh, [29:57] We design and then we manufacture and we operate these vehicles.

[30:02] So for our customers, it's really nice. They're just basically buying teleportation. In fact, the way we talk about it to our customers, whether it's a hospital system or a Walmart or a [30:11] a restaurant, we're just telling them we're showing up and installing a magical portal in the wall. [30:15] So like Rick and Morty or Stargate show up, install a sci-fi portal. Now anybody in that business can [30:22] They can receive an order, they can put something in a box, they walk to the wall, they pass it through the magical portal. [30:27] they don't have to worry about anything else from there the product is teleported directly to the gps coordinates that the customer has asked for whether that's someone's backyard or front doorstep or [30:36] driveway, [30:37] um, [30:38] you know, 10 times as fast [30:40] dramatically less expensive, [30:41] safer, [30:42] higher [30:43] just a way better [30:44] delivery experience in general, [30:46] And so, [30:48] um yeah and you know we charge per delivery uh and again these systems are like [30:53] faster, [30:54] better and less expensive than traditional delivery platforms today. [30:58] So are you thinking about expanding into other kinds of teleportation devices? [31:02] Like what? Do you have anything in mind? I think it would be actually pretty cool if we brought back those like vacuum sealed tubes. Do you remember those? We talk about those all the time. Yeah. Like the pneumatic tube systems basically for hospitals. It's funny you should mention that because actually that's exactly how we describe this product to hospital systems that we're working with. Because they used to have those systems and they would basically walk to a wall. They'd put something and they'd stick it in a tube and it'd instantly be teleported somewhere else in the building. [31:32] And so the way we talk to people about this is like, it's exactly like your pneumatic tube system. But now, instead of going somewhere else in the building, it can be automatically teleported to any home system.

[31:42] within range. And so yeah, it's very exactly the same paradigm. I think these kinds of systems, those tube systems though, they're very expensive, they take a long time to install, they can only really serve like the building or an overall like facility. [31:54] Yeah, but like think about it. The new JP Morgan building is like 50,000 square feet and it packs like thousands of employees. They need a Matic tube system. [32:05] This building alone is probably like 500,000. It might be a lot more than that. Yeah, I think. Yeah. But I think you should sell them on a pneumatic tube system. Yeah. All right. I'll think about it. I'll think about it. [32:18] OK, so part of these interviews is like we're very... [32:23] happy to be sponsored by Brex and they're all about performance, bending smarter, moving faster. But [32:28] I like to work this question around because I think it's really interesting to hear how different founders keep their performance up. And I think it's usually [32:38] kind of who you surround yourself with and who you're inspired by. Maybe it's a mentor. So who's someone who inspires you or you learned a lot against? [32:46] from. [32:48] Yeah, I mean, it's funny, I would say maybe less of a mentor, but like, why do we do what we do and how did we get here? I would say, you know, more than anything, [32:58] my observation is that [33:01] every [33:03] global health expert we spoke to for the first three to four years told us this idea was stupid and it was never going to work. Most investors that we talked to told us this idea was stupid and that they would never fund it.

[33:13] the people that we ended up listening to were the people who are running health systems themselves. [33:18] So if I could like, you know, [33:20] call attention, it was like, [33:22] We did a good job of going to parts of the world that most other [33:26] companies would never have even deigned to visit. [33:30] and actually listening to customers and understanding the problems. It was like this Minister of Health in Rwanda who originally basically told me, [33:40] "Keller, shut up. Just do blood." [33:43] And that advice that she gave us was like the best advice the company ever received. Because had we tried to do everything that we were trying to do originally, we would have totally failed. So she basically was able to like, [33:53] get us to think way smaller, more narrowly, focus on this very [33:58] critical [34:00] single [34:02] you know, family of components. [34:04] and demonstrate the value there. [34:07] she was willing to bet on us when every single global expert told us it was not going to work and that they would, you know, [34:14] there's no chance that they would allow it or... [34:16] Help us. [34:17] So, [34:18] Yeah, I don't know. I guess I would probably say, you know, who inspires me? Like, I think I get pretty inspired [34:23] thinking about [34:25] the fact that technology, I think so much of the world right now, is built on this idea that like, oh yeah, [34:31] AI, robotics, like these companies are going to start in [34:34] a couple cities on the coast of the United States, and they're going to overwhelmingly benefit rich people. [34:41] and over time perhaps they will trickle their way out to

[34:45] developing economies. [34:47] I actually think there's a pretty significant paradigm shift here where that is totally not true. You know, a lot of [34:53] countries that are willing to take risk, that are willing to push, like, [34:58] set new regulatory precedents, [35:01] and adopt new technology faster and have very clear use cases for it. [35:06] you know, look at like [35:07] education, the AI education. It's interesting how people talk about, "Oh yeah, can you make that good for like, [35:13] good enough to replace a kid who's going to whatever, like a $40,000 a year private school in San Francisco. [35:19] so much more interesting to ask, but what about the billion kids who like aren't even showing up to school five days a week or like have no access? Like, we can totally transform access. Like you can, you know, you can provide probably like a [35:32] you know, Ivy League education to every single person on Earth at near zero cost. Like that's going to happen in the next five years. So I don't know, I guess that's like the overall vibe. It's thinking more globally. Even when Zipline came to the US and launched in the US, we didn't launch in San Francisco or New York, we launched in Bentonville. [35:50] And then the first major metro we scaled was Dallas. Second and third metros are going to be Houston and Phoenix. [35:56] I think that [35:59] I don't know if I'm directly answering the question, but that's kind of what gets me pumped, is getting technology [36:05] to actually focus on the most important problems that humanity faces and going and [36:10] helping parts of the world that really need the help and frankly are a lot more excited about technology and innovation than a lot of the kind of

[36:17] NIMBY attitudes you might find in certain cities in the US. [36:20] Some of you may not have heard this yet, but our sponsor Public just launched something called Generated Assets, and it brings AI into investing in a way I've honestly never seen before. Here's how it works. You type in an idea like AI-powered supply chain companies with positive free cash flow or defense tech companies growing revenue over 25% year over year. Public's AI then dispatches a swarm of agents that scan every single US stock, evaluates them, and instantly builds a custom [36:50] why each stock is included. And before you invest, you can even backtest your idea against the S&P 500, so you're making decisions with real context, not just guessing. And beyond generated assets, Public lets you invest in stocks, bonds, options, crypto, all in one place. They'll even give you an uncapped 1% match when you transfer your investments over from another platform. If you want to build a portfolio that actually reflects your thesis, visit public.com slash sorcery. [37:16] Paid for by Public Investing. Full disclosures in the description. [37:20] How these insights informed how you built out the team and where do you, I think it's mostly Tesla folks. [37:27] ZipLine definitely has a lot of folks who hail from Tesla and SpaceX. When it comes to aviation, [37:33] aerospace, there aren't that many companies to look up to, unfortunately. Most of these companies are [37:38] have really bad cultures. [37:40] And so, you know, as the company has grown [37:43] Um, [37:45] we've generally looked for people who are deeply unfancy and deeply mission driven. I think that at the end of the day,

[37:51] um, [37:54] There are so many screwed up things, so many [37:58] insane crises where I or [38:01] Other people at Zipline have had to get on a plane with like three hours notice, fly 30 hours to the other side of the world to try to like fix something that's breaking or resolve some emergency situation. [38:12] working nights and weekends to try to make something that [38:15] the world's never seen before work for the first time ever. Hardware is hard. [38:19] and these kinds of missions are particularly hard. [38:22] I think the only thing that has kind of kept us motivated through that is the strength of ZipLine's vision. The fact that people want to work on something that can save lives, that can clearly advance the world toward [38:33] something that we'd be really proud to hand to our kids and to our grandkids. [38:36] Um, [38:38] And so I think a lot of the people that we hired in those early days, they had to be like, [38:42] extremely unfancy, scrappy and willing to put up with a lot of like discomfort, long travel, [38:49] you know, late nights, [38:50] being out exposed to the elements, shivering in the cold and in the rain, like that's a real thing. And I just posted on X a couple days ago, like this new site that we're operating in the Cascades in Oregon, like the team is literally, you know, operating these aircraft in like snow and icing conditions day to day. And it's actually extremely brutal and uncomfortable and cold for the teams that are doing that work. And we do it because the team knows that [39:17] This is something that will make a really big difference for humanity at scale if we can build it successfully. Deepak joined us about three years ago.

[39:24] Um, [39:25] Yeah, and I think as Zipline has grown, the scope and scale of our ambition has grown. And that also means that [39:31] Basically means two things. One is that the people who have been at the company for the last 8-10 years have to be growing incredibly fast. [39:39] my co-founders, a lot of the early team members who've been here for a long, long time. We've all had to grow incredibly fast to try to give up with the company's success and growth. The other thing is you've got to be able to bring people in to be partners in building the business who have seen scale [39:53] orders of magnitude higher than [39:55] where you're currently at. And so, Deepak, [39:57] had been CFO at Tesla. [40:01] Been there for about a decade, took Tesla public, grew them to, I think, like a trillion dollar valuation. [40:06] Um, [40:07] And Deepak is actually someone who I had learned from as a mentor for seven years. I listened to every single Tesla quarterly earnings report from 2011, when I first became an investor, [40:17] to [40:18] well, up until today, but [40:20] To a certain degree, I was always listening to just Elon and Deepak talk about that business, how they frame the business, how they [40:25] and [40:27] how they talked about the vision and explained the financials. [40:32] And so it was kind of like a dream come true when Deepak decided to become an investor in ZipLine. I ended up starting to go for walks with him and learn from him. [40:40] And over the course of a couple of years, we both decided he'd have a gigantic impact. And Zipline was kind of in this inflection point where he could have a huge impact. [40:47] He joined full-time. He's CFO as well as Chief Business Officer at Zipline and [40:52] Yeah, you know, it

[40:55] I think that we probably... [40:57] to this degree, maybe more even than we had ever appreciated before, it's like, wow, it suddenly feels like there is this [41:03] huge opportunity to build one of the most important companies for all of humanity. Like automated logistics is going to [41:11] connect every human on Earth [41:13] to [41:14] economic opportunity [41:16] to health care, to food, [41:19] Um, [41:19] I think that [41:21] And I think it's going to feel as important as the internet feels today. [41:25] Internet is to information as [41:27] automated logistics is going to be to [41:30] everything. [41:31] That brings me to a very important question. [41:34] How are you going to become a trillion dollar company? [41:38] It's funny, I mean, [41:41] A couple of thoughts. One is I remember trying to convince this engineer to join ZipLine when we were building that early stage. I think we're probably 20 people. And I was trying so hard to convince this. [41:52] engineer that we could be in a hundred million dollar company. And I remember thinking in the back of my mind, I'm like, yeah, we'll see. I don't know if I fully believed it, but he was like 100% sure we're not gonna be able to build in a hundred million dollar company. That was like, that was like the pinnacle of what he and kind of I could imagine. It was like the question was, could we build in a hundred million dollar company? You know, Zipline has now [42:14] by virtue of just putting one foot in front of the other and like grinding for a decade doing hard work [42:18] Um, [42:19] is worth a lot more than that. And I think that [42:23] I. [42:24] Interestingly, the goal was never like, oh, we want to build a company with this market cap.

[42:29] It's more the consequence of working on something that I think is really interesting and [42:33] an amazing, inspiring adventure. Like to us, it seemed like an inspiring adventure to try to build [42:39] like this logistic system that would serve all people equally, and they would be 10 times as fast and dramatically less expensive, that would connect all humans on Earth. [42:47] um, [42:49] And [42:51] That work is not-- I mean, we're less than 1% of the way there today as a company. I think the really simple math behind your question is that there are currently 5.5 billion instant deliveries happening in the US alone. [43:04] And there are multiple delivery platforms that are worth more than $100 billion serving that $5.5 billion delivery market. [43:11] Thank you. [43:12] The crazy thing is that the data that Zipline is currently seeing in Dallas, [43:17] the frequency of customer ordering. If you were to apply that just to the rest of the US, there would be 50 billion instant deliveries happening in the US every year. [43:25] So this is like [43:26] a shocking [43:28] realization. And it's maybe similar to how people always said, "Oh, Uber, even if they only capture 50% of the taxi market in San Francisco, it'll only be [43:35] so big. And of course, today, Uber is 10 times the size of the taxi market in San Francisco. [43:40] If you make something way better, you make it a better product experience, 10 times faster, less expensive, [43:47] remove any kind of safety concerns and guilt factors of people using the system. They just consume a lot more of it. They actually change their lives around it. So we actually think it's very obvious, like people will be using, once you automate these kinds of services and make them less expensive and safe, people will be consuming them multiple times a day.

[44:03] And so that 10x increase in the size of the market [44:07] is the difference between companies that are being built that are worth hundreds of billions of dollars, versus companies that are built that are worth trillions of dollars. By the way, that's only the US market that I was just talking about. [44:16] And I think a huge portion of the opportunity here is to build a global network. The goal was never to build a company that would achieve such and such market cap, right? Like we were just way more focused on like what would be an inspiring mission, like an insane adventure to build something that we thought was really important and cool for humanity. Like how can we build a sci-fi, a part of the sci-fi world? [44:36] you know, [44:38] version of the future that we'd be really proud to hand to our kids and to our grandkids and so I think that um [44:43] The mission was always like the rocket fuel for the company. It's more like a consequence of working on something that we really believe in, that has wound up being one of the biggest markets on Earth. [44:51] that means that [44:52] you know, we suddenly have a company that [44:54] it, uh, [44:55] is highly valued by investors and [44:58] has a pretty much like straight and obvious path to becoming a trillion dollar. You recently got up to $550 million to expand into Africa. Can you break this down? [45:07] Yeah, I mean, we announced this a couple weeks ago. You know, it's really coming... [45:11] from the US government, the State Department, trying to redefine how it is delivering healthcare and providing help to developing economies. Obviously, USAID was shut down a year ago. I think there was this [45:25] a huge political battle over that, over what was the impact. [45:29] Interestingly, the countries themselves have been extremely consistent, as I mentioned before. They want trade, not aid. They want AI and robotics, not cost plus contracting provided by US NGOs. This should not be that surprising to anybody who is kind of...

[45:45] spent time in Africa or, you know, [45:47] sees the analogs in the US. [45:51] And so the [45:53] Basically, the US government is taking a new approach they're calling commercial diplomacy, with the idea that, look, [46:00] We want to be helping these countries turbocharge their economies and leapfrog into the future, but they should be doing it by working directly with U.S. companies. We should be using that to [46:08] to secure US technology and manufacturing leadership for the decade to come. And so, you know, ZipLine is already in a lot of these countries operating large autonomous logistics systems delivering life saving medical care. And the the [46:23] kind of cool change here is that the countries themselves are committing [46:28] uh, [46:29] uh, [46:30] an overwhelming majority of the CapEx and OpEx to make this happen. So the US is like incentivizing it and subsidizing it and accelerating it, but the countries themselves are putting [46:41] They're putting their own money on the line, which is really important. It's kind of like the gym membership that you pay for and use versus the gym membership you get for free and never show up for. It's really important that these countries have skin in the game and that they be willing to commit their own budgets, their own funding to building these kinds of healthcare supply chains. That's a big part of it. [47:00] That's really what we've been able to work with the State Department to craft here. It's like a compact that should accelerate the rate at which [47:07] these developing economies who really want to be allies to the US, [47:10] can intertwine their economies with the US economy and can [47:14] who can take advantage of US AI and robotics technology to

[47:18] to achieve economic growth. Founders ship faster on deal. Set up payroll for any country in minutes, hire anyone anywhere, get visas handled fast, and get back to building. Visit deel.com slash sorcery. That's deel.com slash s-o-u-r-c-e-r-y. [47:36] Working on this company for over 10 years, what's it like working through this new administration? Look, I mean, I think the reality is like this is definitely like the most exciting time to be living in America. It's the most exciting time to be an American. We should be extremely proud. [47:50] I mean, I know that [47:51] People tear themselves up over political divisions, but the reality is actually the US is in an amazing position. [47:58] The economy is growing. We continue to make, like, when you look over five years or 10 years or 15 years, we continue to make really amazing progress on all of the core metrics that you care about, whether it's like healthcare, longevity. [48:11] You know, [48:12] But... [48:13] equality, literacy, [48:15] democracy, like I actually think most of the metrics are quite good. [48:20] Um, [48:20] I'm a huge fan of this book, Enlightenment Now, by Steven Pinker. I honestly think if I could be [48:25] um you know president for a day like that's what i would do i would insist that every american read that book because it's amazing to me that [48:32] in this day and age, [48:33] when we are by far the luckiest humans. Like this, the best time to possibly be alive is right now. We are accelerating and making positive progress on all the metrics that matter for humanity, faster than we ever have before. And yet, [48:46] Most humans have been convinced [48:48] that they're actually living in like

[48:50] you know, [48:51] a terrible time when everything is going downhill. [48:57] And, um, [48:58] I think that [48:59] you know, the reality is [49:01] uh, [49:02] is the exact opposite. So I would say, in general, it is awesome, both that you see this, [49:08] acceleration and progress, and you now see the US administration figuring out how to make sure that the US [49:14] uh, [49:15] plays a big role in [49:17] in that economic progress and that we are [49:20] and that we are [49:22] exporting that kind of AI and robotics technology, those are things that are the competitive advantages of the US. We're exporting that to our allies. That's going to result in [49:30] Saving lives, it's going to save those countries money, it's going to make the world safer. It's also going to be really good for the US. [49:35] Hey, it's Molly. If you enjoy our interviews, check out our newsletter, Sorcery.vc, where we deliver a once a week top deals and tech headlines email and also go deeper on our podcast interviews. Subscribe to Sorcery today. And don't forget to subscribe to the podcast on YouTube, Spotify, Apple or wherever you listen. Link in description to sign up.