A Coup in Coffee Town
Flytrex hits 100k deliveries, Zepto raises $340M, Starship & Serve add partners
Hats off to Starbucks, with the coffee giant looking to recaffeinate its ailing fortunes with a huge new hire. Speaking of huge — Zepto just raised a humongous Series G at a $5 billion valuation. Plus we’ve got some big tech milestones from Flytrex, Serve and Starship — read on!
This week’s edition is brought to you by Yoshi Mobility.
Today:
Chipotle CEO Jumps to Starbucks
Flytrex Makes 100,000th Delivery
Chart Time | Zepto Raises $340 Million
Starship and Serve Score New Partners
LEADERSHIP | Chipotle CEO Heads to Starbucks
Brian Niccols, CEO and Board Chairman of Chipotle, is headed to Starbucks, replacing Laxman Narasimhan as Chief Executive. The market took the news like a triple shot of espresso, with SBUX stock jumping 24.5% in response, a record single day gain that added $21.4 billion in market cap, undoing a year’s worth of price sliding. Chipotle investors were less thrilled with their loss — Niccols turned the company around after its bad e. coli scare in 2018, following an acclaimed stint at Taco Bell — CMG stock fell 7.5%. Chipotle COO Scott Boatwright will step in as the burrito bowl builder’s interim CEO.
The Big Picture: Starbucks stock has been down 36% since Narasimhan took over from Howard Schultz, with sales continuing to fall in key markets like the U.S. and China. The company has been dinged for a number of shortcoming as of late: a tired menu, operational inefficiencies and falling foot traffic from non-rewards members. Its delivery / takeout business has been a mess as well, with mobile ordering impacting in-store wait times, and partnerships with the 3PDs taking too long to emerge, while interesting initiatives like in-house baristas at Gopuff MFCs tread water. Niccols tenure at Chipotle has seen him turn the brand into a tech leader, with digital sales accounting for over one third of revenue, and the company receiving acclaim for innovations like its Chipotlane and forthcoming Hyphen makeline.
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DRONES | Flytrex First to Hit 100,000 U.S. Deliveries
Drone delivery startup Flytrex just hit an impressive milestone for the burgeoning aerial logistics industry: it’s the first operator to make 100,000 commercial deliveries in the United States. This puts it ahead, at least domestically, of better-funded competitors like Wing and Zipline: the former claims 350,000 deliveries, but largely in Australia, while the latter’s million unit milestone is based off moving vials of blood in Africa. Flytrex operates in four small towns in Texas and North Carolina, where 70% of households in its service radius have made use of the service, calling in drones to deliver grocery staples and meals from the likes of Little Caesars and Jersey Mike’s.
The Big Picture: Speaking with Ottomate, Flytrex CEO Yariv Bash shared some insights about what’s next for the startup. He believes the FAA will grant Flytrex its BVLOS waiver by the end of the year, while by late 2025 he expects to open ten more hubs in the Dallas-Fort Worth region. Also noteworthy: orders take 4.5 minutes to be delivered, and average order value is on par with that of DoorDash or Uber Eats.
CHART TIME | Zepto Grows into Series G
Indian instant delivery startup Zepto just raised a mammoth Series G, co-lead by General Catalyst and Mars Growth Capital, pulling in $340 million at a whopping $5 billion valuation. This comes — no joke — less than two months after a Series F valued the company at just $3.6B. Zepto is set to generate about $1.5 billion in annualized sales, as it goes head to head with other local competitors like Zomato’s BlinkIt and Swiggy’s Instamart, for a mega-market that Amazon has essentially walked away from.
AUTONOMY | Starship, Serve Secure New Partners
Sidewalk delivery robotics players Starship and Serve both just locked in some new partners. Starship is adding five more college campuses — Georgia Tech, Southeast Missouri State, University of New Mexico, Prairie View A&M and Cal Poly San Luis Obispo — to a roster of schools that’s already 50+ deep. Meanwhile Serve, which is focused on urban deliveries, has lined up Shake Shack as a new restaurant partner in Los Angeles.
The Big Picture: Starship’s got a bit more tech making moves as well, including that it’s now using wireless charging on 75% of its campuses. Bigger yet is the launch of Starship Marketplace, a self-ordering kiosk + mobile pickup solution that will augment its delivery bots on short staffed locations. The company has now made nearly seven million deliveries. For Angelenos craving a robotically delivered ShackBurger, try ordering from 6201 Hollywood Boulevard, 8520 Santa Monica Blvd, or 3785 Wilshire Blvd, those three locations match up with Serve’s Koreatown, Hollywood and West Hollywood operating zones.
A Few Good Links
Papa John’s revenue falls 1.3%. Boston launches e-bike incentive program. DoorDash offers free Max With Ads streaming bundle for DashPass subscribers. Instacart donates five million servings of fruits and veggies with PHA, partners with Ibotta on coupons and brings new display ads to Canada. RBI prices secondary offering. Fast food tactics bump Chili’s sales. Canadian railroads embargo goods ahead of work stoppage. Walmart opens ocean shipping to marketplace vendors. Overstock.com / Beyond plan reverse logistics partnership. Senate probes Kroger’s dynamic pricing. Ahold warns that digital convenience erodes loyalty. FCC looks to cut down on AI-powered robocalls. Diesel prices drop. ShipHero spins off 3PL arm. Deliveroo Belgium launches grocery delivery with Carrefour. Deliveroo Italy looks to cut down on packaging waste. Texas sues GM over driver data sales. WeRide receives CPUC approval to begin robotaxi pilot. UAW files charges against Musk. Peterbilt pushes EVs. Yelp names top new ramen joints. Test your knowledge of global food delivery trends.
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