Manna Drone Delivery, one of the only drone delivery companies currently making deliveries to customers, spoke with us recently to explain where their business is today and where they plan on going in the future. For those unfamiliar with Manna Drone Delivery, they're an Ireland-based drone delivery company with up-and-running operations in several areas in the country.
Manna CEO Bobby Healy founded the company based on his belief that drones can replace people-dependent delivery for the last mile. He also explained that current delivery methods, like cars and fossil-fuel-powered scooters, are putting tremendous weight on our communities through excessive pollution and short battery lifetimes. By removing the driver and the car from the equation for suburban deliveries, the door opens to a cleaner delivery service powered by drones, which was Bobby's idea behind founding Manna Drone Delivery.
He explained that if we take the time to look closely at the problem, it's one that desperately needs solving due to the mix of large economic demands and the problems associated with scaling human-based delivery services like the ones mentioned above, as well as difficult-to-achieve profit margins. To illustrate this, current last-mile delivery products brought to customers at a distance of about 3 miles away, often see the price increase more than 30% of the product's original value. Although we’ve witnessed the last-mile delivery industry scale from the beginning of the pandemic, we've also seen its slow fall after investors quickly realised that just getting the product into customers' hands wasn't enough to prove it a profitable business case. By removing the delivery driver, drones can achieve the same result, opening up a huge market beyond the initial curiosity of drone delivery services.
When we asked Bobby about why he thinks Manna will overcome current last-mile delivery challenges, he told us that he’s confident in the founding team, who have considerable experience founding and scaling companies across multiple industries. Bobby's theory is that a good business case mixed with a solid team is all he needs to become the top player in the market.
Manna Drone Delivery has recently moved into the US drone market, which, according to Bobby, is the largest target market for his team. One of the reasons he sees the United States as such an important market is due to how the average consumer tends to add on to already-existing market sizes, leaving room for multiple players, which makes the market incredibly attractive to new business models. Still, their focus is on Europe, where regulations are well-defined and have been implemented into law by the European Aviation Safety Agency (EASA). Because the Federal Aviation Administration (FAA) does not have a clear framework for drone regulations, it makes it difficult for new and existing drone companies to get operations off the ground.
Bobby described Manna’s recent launch in Texas as a "theatre opportunity" where they can begin collecting flight hours to prove that, with the proper regulations in place, businesses are capable of scaling safely, which will hopefully bring clarity into a currently unclear market. That's why Manna will continue focusing on growing revenue in Europe while working alongside American regulators like the FAA to end the "never-ending loop of regulatory purgatory" that many companies have faced in the past.
One of Bobby's many advantages over other drone companies is his dedicated investors based in Texas, who have connections to government decision-makers, which can allow him to begin testing operations faster and easier. While he won't be able to deliver to apartment complexes or within the city centre, he can scale by delivering to people's gardens in sparsely populated areas. Adding to the decision to expand to the United States, he explained that no matter where a company wishes to establish their business, it's always important to have connections to community leaders alongside political and commercial support. These advisors, in Bobby’s case American investors in Texas, can help by becoming strategic partners who play an important role in business development.
After working in Europe, Bobby Healy also offered a European perspective to American regulators to start integrating UTM solutions. These UTMs have the potential to be stacked solutions that can work together to enable strategic deconfliction, opening up new operational models and regulatory pathways that might ease requirements for American drone companies. While he acknowledges that the United States is a proud country, he told us that they should still begin looking to Europe to understand which elements worked well for their implementation of drone regulations and which ones could be improved on. This could help unlock some of the current blockers and create a more pragmatic approach to enabling growth in the industry.The official US market launch was in October 2023 in Texas, but Bobby was much more excited about the upcoming European rollout that's being further developed.
When we asked this question, Bobby laughed and said that they regularly get invited to enter into new markets because of the success they've seen in Ireland. Before deciding to launch operations in Texas, they had numerous alternative offers from other states but ultimately decided to go with Texas for various reasons, one being that it was the only state "with a direct flight connection to Dublin."
They currently have conducted 160,000 delivery flights and are certified by the European Aviation Safety Agency (EASA) for beyond visual line of sight (BVLOS) operations. This is a huge achievement that people notice right away, regardless of the country they're based in. Because they're certified to operate in Ireland, it also makes approvals for other European cities faster and easier, which is another reason why the Manna team plan to continue European-based launches in the near future.
One of the main challenges that Bobby acknowledged he will face in the future is that, even though they're launching in Texas with great backing, he expects to face many problems when it comes to the regulatory environment. The US market has just opened, which creates a certain amount of uncertainty and makes it harder to raise a fund. That means the amount of investment capital available for drone delivery is even less than it currently is (due to the unpredictable markets in 2023) in the United States, where investors are still sceptical about the business model's viability.
A few companies can continue investing money in their portfolio start-ups experimenting with drone operations, but Bobby's ambitions are greater than just living on investments. The simple fact is no one can operate at scale in the United States today, which is why he's waiting to scale his Texas operations until there is a sign that scaling revenue is possible and wouldn’t entail scaling inefficient, often costly processes.
When we asked Bobby the advice he'd provide to start-ups looking to get into the industry today, he wasn't very optimistic:
"I think a startup today will have even more difficult problems than we did five years ago when we started. Because you need a lot of capital to run a business like this, we've raised $50 million so far. And Zipline has raised a billion dollars so far, and those are the two.
"It was a well-known private company, and it takes a lot of capital, and startups that are just getting started today have no more certainty than they did five years ago when we started in the US. So these start-ups are going to have to raise funds and look at more difficult private investment markets because of high interest rates.
"So they already have a challenge, and on top of that, there are already big companies - successful ones like us, Wing and so on - that will make it difficult to get funding for the first startup. And yes, it's easy to get two or three million, but you need a lot more than that to build the ground delivery business.
"So I think it's harder than ever to start a drone delivery business now."
Bobby Healy isn’t just one of the most successful drone company founders, but he's also incredibly talented at raising funds for his businesses. He has decades of experience, and his advice was that it takes a "certain resilience to weather the storm because of the climate aspect of what we're doing. There's still a lot of investment capital available for systems or technology that goes towards solving the climate crisis or at least supporting it through greener technologies." He told us that a lot of investments are likely to come once we're out of the end tail end of this recession.
Currently, there is a flight of capital from ventures to high-interest-rate government bonds and products competing with venture capital returns. This is making it incredibly difficult for start-ups to raise capital for the foreseeable future. While we might see a bit of confidence return, the overlap of the war and the pandemic has put the global economy in a fragile place. Even though Bobby isn’t an experienced investor or economist himself, he is one of the most talented founders when it comes to understanding the language investors speak.
For some good news, we can look to the companies managing to make the best of the situation, with a few IPOs potentially happening at the end of 2023.
One thing Bobby highlighted was Manna's strong focus on safety. He told us that "it's not just interesting to build cool technology solutions — sexy, in-any-way clickbaity stuff that's just attractive to newspapers or social media. The one who is going to succeed is going to be as boring as hell. They'll have to operate like an aircraft manufacturer and an airline with all the governance considerations and conservative approaches to operations that standard aviation has."
The focus on cool, sexy and flashy products has started to distract from improving the industry. Bobby pointed out to us that we’ll need to focus as an industry purely on safety, which means everyone will need to work together to solve some of the main problems. That includes managing and cooperating in shared airspaces to enable deconfliction.
Just like traditional aviation, the drone industry is better off working together to open up new airspaces rather than staying at home doing inspections on private property or focusing on individual operations in corridors rather than co-creating spaces where multiple competitors can occupy airspaces together. He wants founders to start asking themselves essential questions like, "How do we operate at scale safely together?", "What systems do we need to do that?" and "Are we doing that together?"
In five to ten years from now, Bobby also sees a future where, in most European suburbs, drone delivery will be available from multiple operators working in the same airspaces. Still, this future won't be possible if we don't start working towards it now, which means building systems that can compete with each other safely so that traffic is coordinated in an optimal way that considers all of the stakeholders. An example would be where emergency and blue light operators have priority over food delivery.
In five years, uncrewed aviation coordination systems should be built and understandable to current operators using a single airspace management layer similar to the mandatory services in the new U-space regulations in Europe. The goal is for these to also be available and affordable to everyone who wants to enter the industry.
Manna Drone Delivery was founded by Bobby Healy in 2019 in Dublin Ireland. They’re currently one of the top drone delivery companies in the world, rivalled only by Wing, a subsidiary of Alphabet Company (Google). This might soon change, however, as they have received funding from Coca-Cola HBC, bringing their total financing to around $40 million. This is a huge contrast in comparison with our interview with Manna Drone Delivery in 2020 when the company was still in its early stages.
CEO of Coca-Cola HBC stated in an article announcing the funding, “Our investment in Manna Drone Delivery, one of the most innovative drone delivery start-up companies in the world, encapsulates our ambition to deliver our products in new and more sustainable ways,” says Zoran Bogdanovic, CEO, Coca-Cola HBC. “We are excited about this partnership which allows us to be at the forefront of disruptive technologies across the worldwide consumer packaged goods (CPG) market. Furthermore, with up to eight times less CO2 compared to car delivery, this partnership with Manna Drones is another step in our journey to achieve net zero emissions across our value chain by 2040.”
Manna Drone Delivery will launch operations in Texas in the near future and another European city soon. Their goal is to launch an additional three cities in the upcoming year.
Bobby Healy is an entrepreneur with a diverse professional background. He started his career developing video games for Nintendo and other platforms. In 1992, Bobby transitioned into the tech industry and founded Eland Technologies, an airline tech company, which he sold to SITA.AERO after 11 years. He then established CarTrawler, a globally recognised mobility marketplace for airlines, and successfully led two leveraged buyouts for the business.
In 2019, Healy founded Manna Drone Delivery, a Dublin-based drone delivery service. In addition to his entrepreneurial roles, Healy is also a board member at DEBRA Ireland, an investor and chairman at Coindrum, and the founder of Meili.
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