UberEats, Postmates, Grubhub, and the flood of smaller food delivery startups have made midnight snacking much easier. It’s simpler than ever to order up that burrito or sushi without heading outside. This revolution improves not only convenience but also safety and public health (arguably) during the coronavirus pandemic. One problem, though: getting food delivered is expensive. 

One reporter from The New York Times found that ordering simple foods — like Subway sandwiches or meals from Panda Express — is up to 91% more expensive from a delivery app than from in-store. Restaurant industry analysts speculate that current delivery markups mean that UberEats and its competitors can only succeed so much given consumers’ willingness to pay a premium for delivery. Indeed, UberEats has experienced significant growth during the pandemic, but continues to lose money hand over fist. 

High premiums from delivery apps aren’t only bad for customers. Restaurants are increasingly unhappy with the unit economics of orders placed through apps. Many restaurants actually lose money on orders placed through apps. They also often struggle to divorce their own reputations from the sometimes-poor delivery experiences from the apps. 

Some restaurants have tried their own in-house alternatives during the pandemic, but many of these solutions still rely on human deliverers. Those high-touch services will never achieve high-margin unit economics. What food lovers and restaurateurs alike really need is a delivery model that routes dollars back into the pockets of everyone involved.  

Kiwibot is a robotic delivery company deploying a fleet of small, box-like autonomous vehicles to carry items to and fro on city sidewalks. Kiwibots can hold food deliveries, grocery deliveries, or any other type of parcel that needs to move from one place to another. The robots navigate streets independently, intelligently avoid obstacles, detect sidewalks and corners, and make their way along routes between the sender and receiver. So far, Kiwibots have made over 100,000 deliveries in pilot testing. 

The latest version of the Kiwibot robot — Kiwibot 4.0 — has enough cargo room to hold 12-inch pizzas or two smaller delivery orders. The robot uses 4G LTE and integrated GPS to communicate with the central routing system and navigate sidewalks. Several cameras on both the front and rear of the robot ensure that all obstacles are detected and avoided. Kiwibot also has an LED screen that displays order information for senders and receivers. 

After developing a working delivery robot, Kiwibot began forging partnerships with cities and companies to launch deliveries. San Jose, CA is Kiwibot’s testing ground. The company partnered with the San Jose Department of Transportation to receive permission to operate on city sidewalks. Additional partnerships with Shopify, Olo, and Ordermark (the latter two representing 120+ restaurants in the city) provide the goods to be delivered. Kiwibot launched full delivery services in San Jose in July 2020. 

Kiwibot charges a setup fee to deploy a fleet of robots and then charges delivery vendors per order with a minimum transaction volume. Currently, Kiwibot charges $3.99 per order on a minimum of 100 orders per day. Kiwibot reports that the 100,000 deliveries made during testing have allowed the company to reduce costs, to the point where each order will be profitable by Q3 or Q4 2020. 

Kiwibot was founded in 2016 and has raised significant venture capital funding for robot development and manufacturing. The company has raised over $5.4 million from several firms and angels, including Berkeley Skydeck, Prototype Capital, Andrew Savage of Lime, and Patrick Lee of Rotten Tomatoes. Last year, Kiwibot generated almost $280,000 in revenue but spent over $2.6 million on development and other costs. 

Kiwibot was founded by the two previous co-founders of Lulo, “the Instacart for Latin America,” which was acquired in 2016 for an undisclosed amount by a larger grocery delivery competitor in Colombia. At least one of these founders apparently worked on a separate app-based concept before pivoting into the current Kiwibot venture. 

Kiwibot co-Founder and CEO Felipe Chávez Cortés was previously the CEO of Lulo, the grocery delivery company from Colombia mentioned above. Before that venture, Cortés founded and led another company for one year, beginning his entrepreneurial career shortly after graduating from university in Latin America. 

Sergio Pachon, co-Founder and COO of Kiwibot, has a similar background. He graduated from university in Latin America, worked briefly in systems engineering, and then founded Lulo.  

Kiwibot has already partnered with several leaders in e-commerce and restaurant logistics. The company plans to announce two additional partnerships with large public companies in the coming months. Kiwibot’s immediate goal is to fully test a city-wide robotic delivery system in San Jose and ultimately expand to cities nationwide. The company plans to use a sizable portion of capital raised for additional robot development. Another large portion will be devoted to hiring.

• Disrupts a delivery model with poor unit economics: UberEats unit economics are notoriously poor. The company loses money on every order placed and will continue to do so for up to five more years with no clear path to profitability (even on a per-order basis) in sight. That’s why Uber’s fundamental business model has always been under scrutiny. It seems that removing human labor from the equation is the only way for delivery to be truly cost-effective. Kiwibot’s robots seem to be achieving that vision much more quickly than the autonomous cars promised to mitigate cost for other deliverers. There is an undeniable market desire for delivery services. Kiwibot may be the company best-positioned to provide those deliveries without bleeding money. 
• Well-suited for the coronavirus age and beyond: Food delivery has exploded during the pandemic, as consumers responsibly adhere to stay-at-home orders and receive dinner directly to their doors. While a mass turn toward food delivery is likely safer than normal traffic to restaurants, there are some doubts as to whether human couriers for UberEats and its competitors are really delivering food safely. An almost entirely touchless delivery experience facilitated by a robot is undoubtedly safer than human delivery, so Kiwibot is positioned to offer best-in-class service during coronavirus. This proof-of-concept and growth over the next year or more in pandemic conditions could cement Kiwibot as a leading delivery provider even after coronavirus has passed. 
  
• Founders with relevant delivery and entrepreneurship experience: Kiwibot’s founders check many boxes that investors look for in a founding team. They have worked together before on a successful venture that was acquired. Moreover, that previous successful venture was also focused on delivery (of groceries), experience that gives these founders a head start in evaluating operational logistics and forging partnerships with Kiwibot.