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Exclusive: Pipedream raises $13M for underground delivery

Apr 23, 2024
Illustration of a conveyor belt in the shape of a dollar sign.

Illustration: Allie Carl/Axios

Pipedream Labs, an underground logistics network, raised a $13 million seed to expand its network into more cities, CEO Garrett McCurrach tells Axios exclusively.

Why it matters: The company says it helps retailers save costs while delivering items faster and addressing labor shortages.

Zoom in: The round was led by Starship Ventures, Myelin VC and Cortado Ventures.

  • The company previously raised a $1.6 million pre-seed round.
  • Pipedream expects to close a few partnerships with quick-service restaurants, retail and grocery partners in the coming months.

How it works: Pipedream uses small, autonomous delivery robots that move through its underground network of pipes, which use the same infrastructure as a water or sewage main.

  • A worker in a fast food restaurant or grocery store can put an order into a compartment and the rest of the process is handled autonomously by its robots which can ferry those items a mile away, McCurrach says.
  • If a robot fails while traversing its system, it can be pushed off so it doesn't cause delays or lose volumes.

Reality check: Retailers are often reticent to adopt capital-intensive hardware due to the training and troubleshooting required.

  • McCurrach says it's not a heavy cost for retailers because Pipedream typically works with their building's existing infrastructure and installing the pipes requires a cut-and-cover process, something most construction crews can do in less than two weeks,.
  • Pipedream hires contractors or subcontractors that are typically already working on common infrastructure projects to install this pipe network under streets, parking lots and buildings.

The latest: Pipedream has built a mile-long test network in the city of Peachtree Corners, Georgia, north of Atlanta.

  • The company is rolling out its instant pickup offering, which lets customers retrieve items curbside through one of its pickup locations.

What's next: The company hopes to begin construction on its first-ever, in-city network this year.

  • It is looking for the right city to build its middle-mile offering, McCurrach says, adding the network could be up to 20 miles long and connect different districts and existing delivery networks.
  • Pipedream hopes to complete one city, learn from it and eventually roll out its network into as many as five other cities, McCurrach says.

Yes, but: Pipedream must "confirm that the system is sufficiently making delivery easier, faster, and cheaper" before it steps on the pedal again, says McCurrach.

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