DroneUp
Virginia Beach-based DroneUp reports that a strategic investment from retail giant Walmart positioned the company to one day make unmanned air deliveries to over 90% of the U.S. population. DroneUp developments since that initial investment have supported the business’ announced plan to serve as the last mile solution for all deliveries. Williams Mullen partners Tom Frantz, John Paris and David Burton, have advised DroneUp from its first fundraise up through its expansion.
Challenge
Building trust in a new technology is never easy, but with the right plan, there's no end to how high you can fly. In 2016, DroneUp founder Tom Walker created a company based on unmanned aerial systems (UAS) employing drone technology to improve efficiency and performance across economic sectors. Our team at Williams Mullen, behind the leadership of John Paris, helped the venture structure and raise $23 million over several rounds of private financing. With a national network of more than 20,000 trained drone pilots, DroneUp touts its reputation for excellence and safety in aerial services ranging from insurance inspections to commercial real estate.
In 2020, during the early days of COVID-19, DroneUp partnered with Walmart in a trial program to deliver at-home test kits in minutes instead of hours. The trial convinced Walmart to approach DroneUp about making a strategic investment to develop a scalable last mile delivery solution for other Walmart products. Negotiations between the world's #1 retailer and the “little-drone-company-that-could” had high financial, regulatory and reputational stakes for both partners. Time was of the essence to secure first-mover advantage.
Solution
Working on behalf of DroneUp, we negotiated deal terms that would let the company maintain independence, obtain significant new capital, and begin work on a nine-figure delivery services agreement. This agreement set the table to allow Walmart to deliver products via drones from its 4,700 locations, while giving Walmart a stake in the business and a seat at the board table. We also helped DroneUp move to increase its flight and logistics infrastructure to serve Walmart's vast customer base and beyond. DroneUp’s technology now allows it to offer last mile delivery services to quick service restaurants, convenience stores, medical deliveries and more.
As part of an economic development project, behind the leadership of Tom Frantz, we helped DroneUp secure grants to expand its headquarters and open a testing and development center at Richard Bland College. According to DroneUp, this will create over 650 jobs. With Paris leading, we represented DroneUp in the purchase of AirMap, Inc., which provides air traffic control for drones. Williams Mullen continues to represent DroneUp in growth initiatives as well as equity and debt offerings.
Achievements
While the initial project contemplated serving four million U.S. households across six states, Walmart's investment in DroneUp is planned to eventually facilitate drone deliveries nationwide — potentially connecting 90% of the U.S. population to 100,000 of Walmart’s most purchased items in just minutes to hours. Meanwhile, DroneUp continues to explore new ways to leverage the commercial promise of unmanned flight through new last mile alternatives for nearly every retail, QSR, convenience and any company needing products and shipments delivered efficiently.
Finding Yes® Moment
The effective negotiation of Walmart's substantial equity investment and related contract to begin the process of opening DroneUp hubs throughout Walmart’s store footprint U.S.-wide.