Bobby Healy, chief executive officer of Manna, poses for a photograph at his home in Dublin, Ireland. Healy was inspired to start a drone delivery company by an attack of the munchies after a few glasses of wine in his garden. “I wanted a bag of chips,” the 54-year-old serial entrepreneur recalls.
© 2020 Bloomberg Finance LP
If
you’re craving a coffee in a handful of Dublin suburbs, you can get it delivered to your home by drone. At a strip mall, a staffer from the local startup Manna will load a bag with a cup of hot joe from a nearby coffee shop into a removable cargo bin that’s equipped with a fresh battery, slap it into the autonomous flying machine and it zooms away. Under three minutes later, it lowers the drink on a tether into your yard.
Coffee is the No. 1 item delivered by Manna, which says that caffeine demand in the morning and afternoon and a clever drone design are helping it keep up a steady tempo of deliveries, and operate with fewer staff and drones than deeper-pocketed competitors like Amazon, Alphabet and the unicorn Zipline. They’ve spent hundreds of millions of dollars to try to make drone delivery take flight, but Manna’s brash founder, Bobby Healy, claims his is the only company that’s turning a profit on each delivery. (Amazon, Alphabet and Zipline declined to comment.)
All that money is no advantage, Healy claims, in an emerging business where he says the keys are developing a cheap, reliable aircraft, operating it with as few people as possible, and convincing regulators that you can fly safely in residential neighborhoods.
“It is not a massive investment required. It’s a massive amount of time and confidence building and building flight hours that’s required,” he told Forbes.
By contrast, his company has only raised $60 million, including a fresh $30 million funding round announced Wednesday led by Molten Ventures and Tapestry VC that values the company at over $150 million. Forbes estimates Manna’s revenue last year was an equally modest $6 million. It has so far completed 200,000 deliveries since it first launched in 2020 — far less than those competitors: Zipline has made 1.4 million, mostly of medical supplies in Africa, while Wing has made 450,000 in Australia, the U.S. and the U.K., and Amazon vaguely claims “thousands.”
But Healy, who previously founded the car rental tech company CarTrawler, maintains that after years of perfecting its aircraft and operating model, Manna is set for hockey stick growth, with plans to expand service in the Dublin suburbs this year to areas with a total population of 1.1 million. Healy says 42% of households in the Dublin neighborhoods it serves have already used the service at least once. And now, he says growing its drone delivery bases from three to 11t will help Manna ramp up deliveries to an annual rate of over 1.5 million—a pace no other drone delivery company has yet achieved.
Manna is also planning to grow its operation in Finland, where it’s currently making 100 deliveries a day around the city of Espoo, and expand elsewhere in Europe, taking advantage of an EU-wide regulatory framework that went into effect in 2023. Healy says the slowness of the Federal Aviation Administration to come up with its own rules makes it too difficult to work in the U.S. for now, however much it beckons as the biggest potential market for Manna and its competitors due to Americans’ world-leading wealth and spending. Manna has operated in the Dallas suburbs, along with Wing and Amazon, but the FAA is currently only approving drone delivery trials on a case-by-case basis.
“Irony of all ironies, Europe is the only place to run a drone delivery business today because it has scalable, concrete regulation,” said Healy. “Anyone who’s in the United States now is at a three-year minimum disadvantage to Manna.”
Manna’s delivery drone, which it developed in house, can carry up to eight pounds of cargo. It flies at around 250 feet in altitude, where Healy says it’s quiet enough that “if you don’t look up, you don’t hear it.”
Courtesy of Manna
Whenever the U.S. gets rules in place, Healy says Manna will be ready to take advantage with a battle-tested delivery system. In the Dublin area, Manna operates from the parking lots of strip malls, where two of its drone landing pads take up about five spots. When local retailers there receive orders for food, books or hardware, they run the merchandise out to Manna’s landing area, where a staffer loads it into a removable cargo bay that also contains the drone’s battery. “Hot swapping” the battery with each delivery enables each of Manna’s drones, developed in-house, to make eight deliveries an hour in an area with a radius of up to three miles, according to Healy. He maintains that competitors’ drones with integrated battery packs like Wing and Zipline can only manage 1.4 deliveries an hour due to the time it takes to recharge.
A single Manna staffer loading cargo at a base with eight aircraft can pull off 25 to 30 deliveries an hour with a turnaround time of 60 seconds, according to Healy. And Manna’s drones fly autonomously, with up to 20 at once monitored remotely by a single staffer at headquarters. With labor accounting for roughly 50% of Manna’s costs, the upshot of running that lean is that the company has lowered costs to roughly $4 per delivery—and Healy thinks they’ll be able to get to $1 with higher volume.
Those kind of costs could make drone delivery more affordable than using ground transportation in the suburbs, Healy argues, where couriers have farther to go with fewer items. The consultancy McKinsey estimates that a five-mile delivery of a single package by car or van costs $9 to $11.
Robin Riedel, co-head of McKinsey’s Center For Future Mobility, thinks drone delivery is set to expand dramatically over the next few years. He doesn’t think regulation is as big a barrier in the U.S. as Healy suggests. “It’s much more how do you build an operating model that can scale and then actually rolling it out,” Riedel said.
A key factor will be commercial partnerships, Riedel, said. Walmart has partnered with Wing to pilot drone delivery in areas around Ft. Worth, Texas. Manna is now focusing on delivery apps, where the charge for customers to have food delivered by drone is the same as road delivery. It’s announced deals this year with Wolt, the international arm of DoorDash, and Just Eat. Healy said a deal with another top delivery app is almost done, which will give the company a place on the screens of three of the largest five delivery apps that collectively account for billions of deliveries a year.
Working with delivery apps will enable Manna to scale faster than signing up retailers one by one, said Healy, and promises all the demand that it can handle. “It is an open goal now for us.”