Estonian package delivery robots manufacturer Starship Technologies has raised €40 million from foreign investors and plans to grow tenfold by conquering university campuses in America.
The locals know Starship’s robots from Tallinn’s Mustamäe borough where they deliver groceries from a Selver supermarket. One of the heads and owners of the company, Skype cofounder Ahti Heinla said the firm is doing just fine in Tallinn but plans to concentrate on USA over the next few years with a plan of reaching one hundred university campuses.
Starship was recently given €40 million by investors to reach the ambitious goal, with the largest contribution made by Morpheus Ventures that already had a stake in the company. Estonian Jaan Tallinn is also among investors. The recent sum is noteworthy as Starship has until now raised a total of €45 million in the five years it has been active.
Pizzas and burgers for students
Heinla explained why the company finds US university campuses so appealing. “Unlike students in Tallinn and Tartu who live all over the city, students in America live close to each other on university campuses where they spend the entire day,” he said.
This means they have breakfast, lunch and dinner in the same place, and the Estonian robot is the perfect means of delivery. “What do American students eat? Pizza, burgers, bananas, salad. Fast food mainly,” Heinla said.
University campuses have another big plus. People usually do not drive there, while the area is too big for a courier to cover on foot. Starship’s robot could be just what the doctor ordered. The company launched food delivery services in two campuses toward the start of the year, which Heinla says has given an encouraging signal.
If right now, the company has close to 300 robots, Starship wants to have 3,000 in two years’ time. Every campus could have 30 delivery bots. Heinla predicts the number of orders the robots are expected to fill to grow even more. The robots have filled 100,000 orders by today. “Perhaps we will soon serve as many people in a single day,” he said.
Even though Starship Technologies is expanding in the US, the company’s software development unit is located in Tallinn where it employs some 150 people. Heinla said that while the company will need more people, the exact number remains unclear. “We can say this investment contributes directly to the Estonian economy.”
People have accepted robots
When Starship started offering deliveries in Mustamäe last December, Heinla promised the service would soon become available all over Tallinn. The CTO now said that it is rather unlikely in the near future as the company will be concentrating on the US market. Heinla said that Estonians have accepted the robots and use them primarily for their cost-effectiveness.
What is Starship’s greatest challenge? “Being the first company in the world to do something like this,” Heinla said, adding that they have to invent everything from scratch.
“We cannot hire someone with experience of how to expand a self-driving robots business and how to make people like robots. Those things exist in science fiction, not in real life,” he said.
Even though there are other companies making self-driving robots, Heinla said they are far behind Starship. The CTO said that while it is very simple to build a prototype and make it move, that is where the difficult part starts. “How to go from a single robot to a functional service that works smoothly and that people like is a great challenge for everyone,” he explained.