Walmart Inc. yesterday said that it has invested in DroneUp LLC, which provides drone services across the U.S. The retailer did not specify the amount of funding but did say that the investment came after successful drone deliveries of COVID-19 self-testing kits.
“In our ongoing effort to get customers the items they want, and fast, we know it will take a well-coordinated network of delivery solutions that span the streets, sidewalks, and skies,” wrote John Furner, president and CEO of Walmart U.S., in a blog post. “Some of these solutions are still emerging, but they’re already showing encouraging results.”
Virginia Beach, Va.-based DroneUp provides flight services, data analysis, and equipment. It also offers drone program development, regulatory consulting, and training. The company claimed it has a database of more than 10,000 pilots certified by the U.S. Federal Aviation Administration (FAA) for its on-demand drone-delivery network.
Walmart builds on proxmity
“Since partnering with DroneUp last year, we’ve valued their technological expertise, world-class operations, and experienced management team – and their commitment to helping the FAA ensure the highest levels of safety with every delivery,” said Furner.
He noted that DroneUp “was the first operator to use the FAA 107.39 waiver, an operation that allows for delivery flights to be conducted over people and moving vehicles” beyond the visual line of sight (BVLOS). DroneUp also provides drone services to government organizations in 11 states.
Furner added that Walmart has “4,700 stores stocked with more than 100,000 of the most-purchased items, located within 10 miles of 90% of the U.S. population.”
Hundreds of drone deliveries were conducted during Walmart's initial testing with DroneUp. “The trial demonstrated we could offer customers delivery in minutes versus hours,” said Furner. “In the coming months, we'll be beginning our first operation at a store in Bentonville, Ark.”
“Conducting drone deliveries at scale is within reach,” Furner said. “DroneUp’s expertise, combined with our retail footprint and proven history of logistics innovation, puts us right where we want to be for that day. Because when it comes to the future of drone delivery, we know the sky’s the limit.”
In other autonomous delivery development, Walmart recently joined a $750 million investment in Cruise LLC, which is working on self-driving ground vehicles.
DroneUp part of growing market
The global drone package delivery market will grow from $528 million in 2020 to $39 billion by 2030, at a compound annual growth rate (CAGR) of 53.8%, predicted Markets and Markets. It said growth would be strongest in the North American and Asia-Pacific markets. Similarly, Facts and Factors forecast a CAGR of 53% from 2021 to 2026, growing from $528 million in 2020 to $6.7 billion by 2026.
Mordor Intelligence was more conservative, projecting expansion from $2 billion in 2020 to $5.6 billion in 2026, at a CAGR of 14%. BIS Research said the market will experience a CAGR of 14.5% beween 2023 and 2030, reaching $4.95 billion. While the specifics differ, most analyst firms expect revised FAA regulations to enable the market to grow as an alternative to ground vehicles for time-sensitive goods such as medication and food.
Also this week, Costa Mesa, Calif.-based El Pollo Loco Holdings Inc. said it would be the first national restaurant chain to offer “door-to-backyard” drone delivery. It is working with Tel Aviv, Israel-based drone provider Flytrex Aviation Ltd. and will begin the pilot with 10 restaurants in Southern California.
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