Robomart, a startup that builds self-driving delivery robots, is unveiling its latest robot with an ambitious goal of using it to make on-demand delivery profitable.
The Los Angeles-based company announced its patented Robomart RM5 on Monday. The level-four autonomous vehicle can carry up to 500 pounds and is made up of 10 individual lockers that hold customer orders. This structure is designed to allow for batch ordering so a robot can work on multiple deliveries at the same time.
Robomart plans to use these new robots to operate an on-demand delivery business model similar to those of established food delivery platforms, Ali Ahmed, Robomart co-founder and CEO, told TechCrunch. This model involves retailers partnering with Robomart to open their own storefronts on Robomart’s app — which is similar to apps like UberEats or DoorDash.
What is different is the cost structure for the customers. Each time a customer orders from Robomart they pay a flat $3 delivery fee, which the company hopes will be a much more attractive option than the multiple fees typically charged by other delivery apps, Ahmed said.
“We see this as building our own autonomous marketplace,” Ahmed said. “That is something that is pretty unique in this space, an autonomous marketplace for on-demand delivery using self-driving robots.”
Robomart plans to start onboarding retailers in its first market, Austin, Texas, over the next few months ahead of launching the delivery service later this year.
This announcement marks an expansion from Robomart’s roots. The company was founded in 2017 and started piloting an autonomous “store on wheels” in 2020, which brought a mobile autonomous store stocked with goods like pharmacy items and ice cream direct to customers who requested it.
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While the company started with its “store on wheels” model, this move into on-demand delivery was a natural progression, Ahmed said. He added that the company knew it wanted to tackle on-demand delivery from the beginning.
Prior to Robomart, Ahmed founded Dispatch Messenger, an on-demand delivery platform in the U.K., in 2015. Ahmed said that his previous company just couldn’t make the economics to remain profitable while still relying on human delivery drivers. That focused his attention on automation to cut costs. Now, Ahmed believes they’ve cracked the code.
“Our robots bring the cost of a delivery down by up to 70%,” Ahmed said. “That is a critical difference. If you are paying a driver $18 an hour, your cost, just for that driver, is $9 to $10 per delivery.”
Robomart has gotten to this point with very little funding, something that Ahmed said he’s really proud of. The company has raised less than $5 million in funding from firms including Hustle Fund, SOSV, and Wasabi Ventures, among others.
“We have raised almost $4 million in funding, and that has enabled us to build five generations of robots and now deploy the first autonomous marketplace for the road,” Ahmed said. “I’m proud of our team, and it’s a testament to how much we have been able to achieve.”
While the on-demand delivery sector is a crowded space with several large legacy players, including UberEats and GrubHub, Ahmed thinks Robomart is bringing a totally new product to market at a price he thinks consumers will be attracted to.
“To give them this incredible proposition of $3 and no other charges, just [price] markups in themselves can be prohibitively expensive,” Ahmed said. “They don’t even realize they are paying that markup and the other fees and the tips. This makes [our model] very attractive to the retailers and customers.”