Drone start-up Manna raises funds for launch in US and UK

Irish drone start-up Manna has completed its biggest fundraising with backing from UK venture capital firm Draper Esprit and the founders of online payments group Stripe to prepare to launch delivery services in the UK and US.

Manna has a working drone service in two towns in Ireland to pilot its technology — delivering groceries, takeaways and medicines — and will add a third town next month. The company then plans to expand to the UK, where it builds drones in a factory in Wales, and the US.

The start-up will on Thursday announce it has raised about $25m from Draper Esprit, Team Europe, the venture capital firm of Delivery Hero founder Lukasz Gadowski, and DST Global. Stripe’s Patrick and John Collison have also backed the group as private investors.

Manna founder Bobby Healy, a tech entrepreneur who helped build one of Ireland’s most valuable start-ups, CarTrawler, said the money would be used to speed up manufacturing and research, before expanding operations in Europe and the US in about 18 months.

Healey said the business would raise “a significantly larger amount of finance in the next 12 to 24 months” to accelerate this rollout. Manna has recruited a former Alphabet drone executive to head its US operations.

“The biggest market for us is the USA, but number two is the UK, which is bigger than the entire rest of Europe combined in takeaway and delivery meals,” said Healey.

“Drone delivery is regulated for, it’s technically very practical, and we’re already showing that it works. The unit economics are absolutely golden. It’s a trillion-dollar plus industry that’s actually viable in the next 24 months. The next phase for us, when we start to scale, will require a gigantic infrastructure rollout. Us and Alphabet Wing will be leading it.”

Manna’s largest rollout has been in the Irish town of Oranmore, where companies from Tesco to local cafés supply products to a population of about 10,000 people via two drones. 

Other partners include Just Eat, while it also delivers medicine and Covid-19 testing kits. The median flight time for its drones is two minutes and 40 seconds. Healy said take-up in the town was about 30 per cent since its launch in November.

“Drone delivery is the way you get things delivered there. It’s not some toy, it’s not some project, it’s literally: I want a coffee,” he said. “That’s the way you get things from Tesco to the local vendors. Whether you need a pint of milk, some Calpol for the kids or your takeaway food, this is a far safer, quieter, cleaner way to move things around.”

Healey estimated that between 40,0000 to 50,000 drones would be needed to supply just a tenth of the UK market. “You’ll need two or three people for [a] hub and we think we need about 3,000 hubs in the UK, so five to 10,000 full-time employees and upwards of half a billion dollars in investments just to launch to 10 per cent of the UK.”

He described the business as “being an aircraft manufacturer and an airline rolled into one. It’s just your flights are shorter and your aircraft is smaller.”

Nicola McClafferty, partner at Draper Esprit, the largest investor in the fundraising, said Manna had shown that with relatively little capital and time “how transformational drone delivery can be for suburban communities”.