January 12, 2017      

Starship Technologies, which has been testing robotic delivery of packages in nearly 60 cities worldwide, got an endorsement today from Daimler AG. The German automaker led a €16.5 million ($17.2 million) seed funding round.

While a lot of public attention has focused on Amazon.com Inc.’s plans for aerial drone delivery, Starship has been moving forward with wheeled drones in an area with less competition and fewer regulations — suburban sidewalks. But there are still challenges of scale, security, and public acceptance.

Business Takeaways:

  • Starship Technologies has built on its relationship with Mercedes-Benz and obtained funding with help from Daimler.
  • The companies are developing autonomous ground vehicles for package delivery, and the general public has already had more than a million encounters with Starship’s robotic delivery.
  • Starship plans to test its systems in more markets, and its co-founder expects robotic delivery to become more common by year’s end.

Last-mile disruption

Starship CEO Ahti Heinla was also co-founder and chief technical architect of Skype before founding Starship.

Starship CEO Ahti Heinla discussed robotic delivery at CES 2017.

Robotic delivery will soon be an everyday occurrence, said Starship CEO Ahti Heinla.

“After Skype, we didn’t want to think small — we wanted something bigger,” he said during the “Delivery Robots Knocking at Your Door” panel in the Robotics Conference at last week’s Consumer Electronics Show. (Editor’s Note: Sister publication Robotics Trends hosted that conference at CES.)

“Delivery … is one of the last undisrupted industries,” Heinla said. “It’s still largely manual work, not yet automated and ripe for innovation.”

“One thing that hasn’t changed is the cost of manned delivery methods,” he added. “The human is your personal servant. Never mind that a driver has 200 packages in a van. While parking it, knocking on your door, finding a place to leave it — for those minutes, they are your personal servant.”

“You are paying for that — one second is one cent; very roughly, robots are cheaper,” Heinla said. “We can get it down … it’s just a question of time.”

“One of the key reasons why we founded Starship is that we realized that there are no insurmountable technical challenges,” he added. “Human-level AI is not necessary for a robot like that.”

Starship, which has offices in London and Tallinin, Estonia, has built a relatively robust system with multiple sensors.

Strategic partners for robotic delivery

In September, Starship and Mercedes-Benz announced a partnership in which Starship’s delivery robots would carried on Mercedes-Benz “mothership” vans. Mercedes-Benz is a business unit of Daimler.

“Starship’s unique technology fits perfectly with our vans,” said Voker Mornhinweg, head of Mercedes-Bens Vans.

Robotic delivery could soon come via Mercedes vans.

Mercedes-Benz displayed a concept van with aerial drones on its roof at CES 2017.

Mercedez-Benz is keeping its options among autonomous delivery methods, since multiple types could be used for different items or locations. At CES in Las Vegas, Mercedes-Benz displayed a concept vehicle that included recent acquisition Matternet’s aerial quadcopters for small parcels.

Other investors in Starship included Shasta Ventures, Matrix Partners, ZX Ventures, Grishin Robotics, and Playfair Capital.

“This funding further accelerates development of our technologies and enables us to launch pilot programs in several new markets,” Heinla said.

U.S. cities that are testing Starships’ robotic delivery include Washington, D.C., and San Francisco.

More on Robotic Delivery:

The near future is full of robots

Switzerland’s national postal service has begun testing the robots with the possibility of official adoption within three years. Also last year, Starship partnered with Just Eat, an online food-delivery firm in London.

“In 2017, robotic delivery will become regular,” Heinla predicted. “Starship has 270 robots, has logged 16,000 miles, and is doing commercial deliveries in four cities in Europe. Soon, we’ll add three cities in the U.S. We could soon have thousands of robots, which would change people’s perception.”

By last August, 1 million people had encountered Starship’s robots, according to the company.