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Matternet CEO Raptopoulos on Drone Delivery · Choppin’ It Up by Bloomberg Intelligence

• 0:13
  Speaker 1: Welcome to Chopping It Up.
• 0:15
  Speaker 2: I'm your host, Mike Haleen, the senior Restaurant and Food
• 0:17
  Speaker 2: Service Analyst at Bloomberg Intelligence. Our research and that a
• 0:21
  Speaker 2: bi's five hundred analysts around the globe can be found
• 0:23
  Speaker 2: exclusively on the Bloomberg terminal. If you enjoy the pod,
• 0:27
  Speaker 2: please hook us up and give us a five star
• 0:29
  Speaker 2: review on Apple or Spotify. Today we're joined by Andreas Raptopolis,
• 0:35
  Speaker 2: founder and CEO of Maternet, a global pioneer in autonomous
• 0:39
  Speaker 2: joan delivery. Welcome to the pod, Andreas.
• 0:43
  Speaker 1: Thank you for having me. It's a pleasure to be here.
• 0:45
  Speaker 2: Sure thing, So you've been working on drone delivery before
• 0:48
  Speaker 2: it was cool? What drew you to the space?
• 0:51
  Speaker 3: Yeah, I started uttering in twenty eleven. I noticed what
• 0:58
  Speaker 3: was happening in back then, the very sort of embry
• 1:04
  Speaker 3: on it like diy on delivery movement, and I thought
• 1:09
  Speaker 3: that this is going to change how the world works,
• 1:10
  Speaker 3: It's going to change how we do we do one
• 1:12
  Speaker 3: of the most fundamental of things that we do every day,
• 1:15
  Speaker 3: which is move things from A to B. And so
• 1:19
  Speaker 3: that that really gave me the motivation to start the company.
• 1:21
  Speaker 3: And at the same time, you know, help build the industry.
• 1:24
  Speaker 3: So we're really the first people to start doing work
• 1:28
  Speaker 3: in the humanitarian space using drones working in very remote
• 1:32
  Speaker 3: locations places like Bhutan, Paponuine, Malawi with people like UNICEF
• 1:37
  Speaker 3: and others without borders. Then in twenty fifteen, we decided
• 1:41
  Speaker 3: to focus on the urban suburban problem. This is because
• 1:45
  Speaker 3: we thought that this is where the vast majority of
• 1:48
  Speaker 3: the market is going to be. It turns out it's
• 1:50
  Speaker 3: eighty percent of the market. So we thought we should
• 1:53
  Speaker 3: better figure out how to build technology for these pages
• 1:55
  Speaker 3: where the market is going to be at. And then
• 1:58
  Speaker 3: in twenty eighteen we came here to the US starting
• 2:01
  Speaker 3: to operate with rps for healthcare systems. It's a pretty
• 2:06
  Speaker 3: exciting time in the industry right now because you know,
• 2:09
  Speaker 3: there is a massive inflection point that we're going through.
• 2:13
  Speaker 3: Very recently, the FAA has changed the rules or is
• 2:17
  Speaker 3: changing the rules around full autonomous log This is the
• 2:20
  Speaker 3: degree and that's creating the conditions for exponential growth now
• 2:24
  Speaker 3: in the industry here in the US, and that's why
• 2:29
  Speaker 3: it's so exciting. So we get now to deploy this
• 2:31
  Speaker 3: at scale for restaurants, for retailers, you know, in addition
• 2:35
  Speaker 3: to very I think impactful applications in healthcare and other
• 2:41
  Speaker 3: places in logistics.
• 2:43
  Speaker 2: All right, great, and when you started the business early on,
• 2:45
  Speaker 2: I think it was mainly centered around healthcare and can
• 2:49
  Speaker 2: I guess talk about that and then what you know
• 2:52
  Speaker 2: industries you're currently servicing and where most of your effort
• 2:56
  Speaker 2: is going to go moving forward.
• 2:58
  Speaker 3: Yeah, So until a couple of years ago, we exclusively
• 3:01
  Speaker 3: worked in healthcare. The types of things that we've done
• 3:05
  Speaker 3: was like b to b urgent healthcare delivery, so for example,
• 3:10
  Speaker 3: transporting diagnostics from point of collection to point of analysis
• 3:15
  Speaker 3: inside a healthcare network, or transporting chemotherapy drugs from specialty
• 3:21
  Speaker 3: pharmacies to the clinics where they're being administered. With that
• 3:25
  Speaker 3: change that is happening in the US with at the
• 3:30
  Speaker 3: regulary level that now allows us to really scale drone
• 3:33
  Speaker 3: delivery in the US, we thought, now it's the right
• 3:36
  Speaker 3: time to really enter the consumer market and go after
• 3:40
  Speaker 3: some of the biggest applications.
• 3:42
  Speaker 1: That they will be for the drone delivery services. Right.
• 3:45
  Speaker 3: So, when we look at what's happening with ont mad
• 3:48
  Speaker 3: food delivery like Torda, super Eats and their competitors, right,
• 3:53
  Speaker 3: these guys are transporting today, you know, food from restaurants
• 3:57
  Speaker 3: to people's homes. And it happened depends you know, with
• 4:01
  Speaker 3: a four thousand pounds vehicle, someone goes across town. You know,
• 4:06
  Speaker 3: PARTI legally creates traffic, right picks up food, takes it
• 4:10
  Speaker 3: to somebody's home. This is happening like one or two
• 4:14
  Speaker 3: packages at a time, and it happens like over ten
• 4:17
  Speaker 3: million times every day. I think it's kind of crazy
• 4:21
  Speaker 3: that we allow such a wasteful system to exist. We're
• 4:24
  Speaker 3: not thinking about the total cost of those of these
• 4:27
  Speaker 3: systems in terms of emissions, congestion that they generate, et cetera, accidents,
• 4:32
  Speaker 3: And I think, you know, this is an application that
• 4:37
  Speaker 3: will be revolutionized by drawn deliver You're going to be
• 4:39
  Speaker 3: able to do the same thing at a speed that
• 4:42
  Speaker 3: feels like magic. So you know, what you are used
• 4:46
  Speaker 3: to getting in thirty to thirty minutes to an hour,
• 4:48
  Speaker 3: you will be getting in five to ten minutes, and
• 4:51
  Speaker 3: eventually at the cost that's going to be lower than
• 4:54
  Speaker 3: any human operated system.
• 4:56
  Speaker 2: So what types of restaurant markets are best suited for
• 5:00
  Speaker 2: drone delivery?
• 5:01
  Speaker 3: First of all, I think we're going to see drone
• 5:03
  Speaker 3: delivery scale first in the suburbs. This is where you
• 5:07
  Speaker 3: have like that sweet spot of enough density of restaurants
• 5:11
  Speaker 3: and also consumers demand right and you also have a
• 5:18
  Speaker 3: relatively simple.
• 5:21
  Speaker 1: Model that you can operate on.
• 5:23
  Speaker 3: So because in suburban areas you typically have open spaces
• 5:28
  Speaker 3: you can deliver to. So if you go to our
• 5:30
  Speaker 3: website you can see you know what this looks like, right,
• 5:34
  Speaker 3: A drone picks up from a ground ast aveigles station.
• 5:39
  Speaker 3: This is like a portal that a restaurant can use
• 5:41
  Speaker 3: in order to put a package into the system. Don't
• 5:45
  Speaker 3: drone takes off from their complete autonomously and then executes
• 5:48
  Speaker 3: that flight and then it comes to your designated spot
• 5:52
  Speaker 3: in the front yard or backyard in a centile family
• 5:55
  Speaker 3: home and deliver something there. So that is the simplest
• 5:58
  Speaker 3: model for drone delivery to scale well. And the pickup
• 6:01
  Speaker 3: problem is the problem that really has to be solved
• 6:04
  Speaker 3: for the unit economics and the value proposition to be
• 6:06
  Speaker 3: where it needs to be right. So matter it is
• 6:09
  Speaker 3: very unique in that we have developed this thing called
• 6:11
  Speaker 3: the station. It's like a portal that you upload the
• 6:14
  Speaker 3: package into the system and that's going to go on
• 6:17
  Speaker 3: the back of a Chipotle or a back of Starbucks,
• 6:20
  Speaker 3: right and that you know, eventually we're going to have
• 6:24
  Speaker 3: integrations even with the buildings, but initially it takes one
• 6:27
  Speaker 3: parking spot to have one of those things there. So
• 6:31
  Speaker 3: the first model that we're focusing on is a stand
• 6:34
  Speaker 3: alone store that may have like a couple of parking
• 6:37
  Speaker 3: spaces and they may wish to adopt their own delivery,
• 6:41
  Speaker 3: so they're willing to give one of these parking spots
• 6:43
  Speaker 3: for drones to be picking up packages. So we'll start
• 6:47
  Speaker 3: from this, like we're really focusing now on national chains
• 6:51
  Speaker 3: and you know, focusing on first piloading and integrating. There
• 6:55
  Speaker 3: is like the physical integration I talked about, there's also
• 6:58
  Speaker 3: the digital integration with the back end systems for them
• 7:01
  Speaker 3: to be able to ingest those deliveries through the channels
• 7:04
  Speaker 3: and then you know, make theron delivery available to the
• 7:08
  Speaker 3: customers within you know their network, so urban suburban so
• 7:15
  Speaker 3: or mostly you know suburban to start with. And you know,
• 7:18
  Speaker 3: the standalone restaurants is what we're focusing on.
• 7:22
  Speaker 2: Ultimately, do you see these docking stations being a part
• 7:25
  Speaker 2: of the actual physical restaurants so the the employees don't
• 7:29
  Speaker 2: have to leave.
• 7:30
  Speaker 3: Yes, Yeah, that that's that's really the long term vision
• 7:32
  Speaker 3: and we've been working on solutions for that with a
• 7:36
  Speaker 3: couple of restaurant partners. I think once the model, the
• 7:40
  Speaker 3: model is proven, uh, it's going to be a no
• 7:43
  Speaker 3: brainer for a restaurant to you know, putting the infrastructure
• 7:49
  Speaker 3: that will allow it to vastly expand its ability to
• 7:53
  Speaker 3: do really fast deliveries and of course ireate way more
• 7:57
  Speaker 3: revenue from a single restaurant. Right, So so I think
• 8:01
  Speaker 3: it's about one hundred and fifty thousand dollars for a
• 8:03
  Speaker 3: restaurant to put in a drive through, right, and they
• 8:07
  Speaker 3: know what that means.
• 8:07
  Speaker 1: And then so return of investment.
• 8:10
  Speaker 3: We're generating that data now for our system, right, it's
• 8:13
  Speaker 3: not going to be as expensive and hopefully you know,
• 8:17
  Speaker 3: you can see real impact to your revenue through first
• 8:20
  Speaker 3: part of delivery by using a system like ours that
• 8:24
  Speaker 3: is really a delightful customer experience. So once that data
• 8:29
  Speaker 3: is out and people start seeing the impact is going
• 8:31
  Speaker 3: to have on their business, I think it's going to
• 8:32
  Speaker 3: be a no brainer to really integrate this fool into
• 8:35
  Speaker 3: the restaurant so people don't even have to leave the
• 8:38
  Speaker 3: premises and go outside in order to load and order.
• 8:41
  Speaker 2: Let's talk about the urban markets. So what are the
• 8:45
  Speaker 2: sticking points? What makes it more difficult in those markets?
• 8:49
  Speaker 2: Is it just a place to drop off the package
• 8:51
  Speaker 2: or is there issues with routing?
• 8:55
  Speaker 1: What?
• 8:55
  Speaker 2: What things are issues? I guess for you in the
• 8:58
  Speaker 2: urban markets.
• 8:59
  Speaker 1: Yeah, it's really about the drop off for us.
• 9:01
  Speaker 3: So you know, it takes a much safer system to
• 9:06
  Speaker 3: be able to fly in densely populated areas. Martinet is
• 9:10
  Speaker 3: the only drone delivery system in the world that has
• 9:12
  Speaker 3: reached the gold standard of aviation safety or air Weddiness
• 9:16
  Speaker 3: certification as we call it, which is the FAA TYPES certification.
• 9:20
  Speaker 3: So we're the only ones only during delivery plasm out
• 9:23
  Speaker 3: there that has FAA T certification. We have been able
• 9:26
  Speaker 3: to prove our system to a level where we could
• 9:28
  Speaker 3: operate open over Manhattan today this level of population density,
• 9:33
  Speaker 3: and we've had operations in urban environments for years, right,
• 9:36
  Speaker 3: We've been operating in zero for many years. We've had
• 9:39
  Speaker 3: operations in Berlin. We are standing operations in London now
• 9:43
  Speaker 3: Central London, which is very exciting. So the safety part
• 9:49
  Speaker 3: is very robust on our platform. The thing that is
• 9:54
  Speaker 3: tougher is like again how do you pick up? How
• 9:56
  Speaker 3: do you deliver? The pickup problem? I think think there
• 10:00
  Speaker 3: are some very interesting applications in food. Right, So when
• 10:04
  Speaker 3: we think about dark kitchens for instance, right, these are
• 10:08
  Speaker 3: places that have volumes of typically hundreds of deliveries per day,
• 10:13
  Speaker 3: and you know they have premises with which you can
• 10:16
  Speaker 3: really integrate. So the pick up problem, at least in
• 10:20
  Speaker 3: our platform is relatively easily addressed. The delivery problem is
• 10:24
  Speaker 3: a bit tricky because you know, if you go to
• 10:28
  Speaker 3: a part two to deliver to a customer on the
• 10:30
  Speaker 3: fifth floor of an apartment building, you need to figure
• 10:33
  Speaker 3: out how will you solve this final leg. In some
• 10:39
  Speaker 3: of the more premium apartment buildings we're having any discussions
• 10:43
  Speaker 3: with a major developer in Florida, for instance, they are
• 10:48
  Speaker 3: these are service buildings. So today, if you order a
• 10:51
  Speaker 3: door dash, concerts will have to escort the dasher up
• 10:54
  Speaker 3: your apartment. So when that model exists, it would just
• 10:59
  Speaker 3: make sense that you just have the drone drop it
• 11:00
  Speaker 3: off and concerts can still take you to you without
• 11:03
  Speaker 3: having to escort a person up. In the cases where
• 11:07
  Speaker 3: you're not in a service department. You know, the way
• 11:10
  Speaker 3: the model would work today is that the person would
• 11:12
  Speaker 3: come down and pick it up from a drop location
• 11:15
  Speaker 3: right next to the apartment building. This is a part
• 11:17
  Speaker 3: of the experience that we haven't proven out yet. Like,
• 11:20
  Speaker 3: you know, what does that do to customer demand? What
• 11:23
  Speaker 3: is the trade off between like convenience and speed? Right,
• 11:28
  Speaker 3: you get your food match faster by you sacrificing a
• 11:30
  Speaker 3: little bit of convenience.
• 11:31
  Speaker 1: So these are some of the things that we are
• 11:34
  Speaker 1: trying to test for right now, got it?
• 11:36
  Speaker 2: Where are you currently testing delivery and how much faster
• 11:39
  Speaker 2: are drones than drivers in those areas.
• 11:42
  Speaker 3: We are live in Mountain View, California, and the couple
• 11:46
  Speaker 3: of the surrounding city, Sunnyvale. We've been running this program
• 11:51
  Speaker 3: for over a year and a half now, and you know,
• 11:55
  Speaker 3: the data is just mind blowing. Drone delivery is extremely fast.
• 12:00
  Speaker 3: It feels kind of unreal if you sort of get
• 12:03
  Speaker 3: your first delivery, it's just not used to the speed.
• 12:07
  Speaker 3: Are records are flying at about fifty miles per hour
• 12:10
  Speaker 3: and there's not traffic in the sky, right, so you
• 12:12
  Speaker 3: can cover like a five mile or three mile delivery
• 12:15
  Speaker 3: in five minutes and by car it would be I
• 12:19
  Speaker 3: don't know, thirty to forty five minutes, and sometimes it's
• 12:22
  Speaker 3: even more than that. Right, So you know, right there
• 12:25
  Speaker 3: you probably have like I don't know, eight to ten
• 12:28
  Speaker 3: x speed improvement, and you know, it's just like completely
• 12:33
  Speaker 3: revolutionizes the experience, right because when I think about QSR,
• 12:37
  Speaker 3: I think about food that we the experience of consuming
• 12:41
  Speaker 3: that food degrades quickly over time.
• 12:44
  Speaker 1: Right, so when you.
• 12:45
  Speaker 3: Have a delivery mechanism that allows you to receive that
• 12:49
  Speaker 3: food and the experience is the same as you just
• 12:52
  Speaker 3: had it in the restaurant like serf. To you, it's
• 12:55
  Speaker 3: just like a completely different experience. It's very surprising to
• 12:59
  Speaker 3: experience that. So you know, that's really one of the
• 13:02
  Speaker 3: key regions why I think there's going to be massive
• 13:05
  Speaker 3: adoption and this like new technology capability is going to
• 13:09
  Speaker 3: be like a massive I think, you know, it's going
• 13:13
  Speaker 3: to make a huge difference on how people think about,
• 13:17
  Speaker 3: you know, food consumption at home, like prepared food and
• 13:21
  Speaker 3: food delivery.
• 13:23
  Speaker 1: It's going to take the.
• 13:24
  Speaker 3: Existing experience, you know, to a completely different level in
• 13:27
  Speaker 3: the in quality and over time as well in cost
• 13:31
  Speaker 3: because as a system scale, they're going to be much
• 13:34
  Speaker 3: cheaper than the existing delivery mechanisms.
• 13:36
  Speaker 2: Yeah, getting the food there hot quickly. Is is so important?
• 13:41
  Speaker 2: Me and my ex wife used to joke around there
• 13:43
  Speaker 2: was this Chinese restaurant that was pretty.
• 13:46
  Speaker 1: Close to where we lived. We lived in roseland there was.
• 13:48
  Speaker 2: A Cafe eighty eight Livingston, New Jersey.
• 13:50
  Speaker 1: The food would be there in fifteen minutes.
• 13:52
  Speaker 2: We used to joke around that they were cooking it in.
• 13:54
  Speaker 1: The back seat.
• 13:56
  Speaker 2: But it motivated us to order from there more often
• 13:59
  Speaker 2: because you knew we're going to have a good experience. So, yeah,
• 14:02
  Speaker 2: it's critical. You said they go up to fifty miles
• 14:05
  Speaker 2: an hour. Of the drones, how high are they flying.
• 14:08
  Speaker 3: They're flying typically between three and four hundred fift This
• 14:12
  Speaker 3: is the lower part of the airspace, so you know,
• 14:15
  Speaker 3: pretty much nothing else flies there except emergency helicopter services.
• 14:19
  Speaker 3: And you know they're high enough so that you cannot
• 14:24
  Speaker 3: see them or hear them, right unless you're really paying attention.
• 14:28
  Speaker 3: Those things are not inside your sort of perceptual your
• 14:32
  Speaker 3: field of perception, right, So.
• 14:33
  Speaker 1: Which is the way we want it to be.
• 14:35
  Speaker 3: We don't want to pollute the sky or pollute our
• 14:37
  Speaker 3: cities with new sources of like you know, visual or
• 14:42
  Speaker 3: auditory pollution.
• 14:43
  Speaker 1: Right, So.
• 14:45
  Speaker 3: That's that's another big benefit of the technology, right, you
• 14:47
  Speaker 3: actually remove things from your environment versus ADS. When you
• 14:52
  Speaker 3: compare this to a four thousand sort of pound card
• 14:55
  Speaker 3: doing a delivery.
• 14:56
  Speaker 2: Yeah, well that's a relief because you know, I live
• 14:58
  Speaker 2: in a pretty populated area. I thought I was going
• 14:59
  Speaker 2: to have move to the mountains.
• 15:01
  Speaker 1: You know.
• 15:04
  Speaker 2: So what's the weight limit of packages right now? How
• 15:08
  Speaker 2: far can the drone and how far can the drones go?
• 15:11
  Speaker 3: Yeah, so in our current system we call it matter
• 15:14
  Speaker 3: at M two, the weight limit is four pounds and
• 15:20
  Speaker 3: the radius, the area of coverage is five miles around
• 15:25
  Speaker 3: the restaurant.
• 15:27
  Speaker 1: And you know, that allows us to do most.
• 15:30
  Speaker 3: Single personal meals or maybe a couple of orders at
• 15:33
  Speaker 3: the time. With our next gen system, we call it
• 15:37
  Speaker 3: M three. We will announce it in a few months.
• 15:40
  Speaker 3: We are actually doubling the weight. We're going all the
• 15:43
  Speaker 3: way up to more than doubling, we're going up to
• 15:45
  Speaker 3: eleven pounds, and we're doubling the service radios to ten miles.
• 15:49
  Speaker 3: So that would really allow us to cover the vast
• 15:52
  Speaker 3: majority of food delivery orders. And you know, the you know,
• 15:57
  Speaker 3: some of the experimentation we're doing now with days for instance,
• 16:00
  Speaker 3: is like.
• 16:00
  Speaker 1: Okay, you know, what is the.
• 16:04
  Speaker 3: You know, what is the change in customer behavior that
• 16:06
  Speaker 3: we can at least at even like with the similar orders. Right, So,
• 16:10
  Speaker 3: what happens to late night ordering, for instance, when you
• 16:13
  Speaker 3: have access to that speed, you know, at eleven pm
• 16:17
  Speaker 3: at night or at seven pm on a or a
• 16:20
  Speaker 3: Friday evening, right, what happens to your you know, similar
• 16:25
  Speaker 3: to your experience? Right when you do have that super
• 16:28
  Speaker 3: fast Wait, what happens to your consumption? Like and you
• 16:30
  Speaker 3: know when you just prefer to go to that store
• 16:33
  Speaker 3: versus at the other store, right, just because you know
• 16:36
  Speaker 3: it's going to be here hot, and it's going to
• 16:38
  Speaker 3: be here at the guaranteed time, that's math much faster.
• 16:40
  Speaker 1: Yeah, it's very cool.
• 16:41
  Speaker 2: Is there going to be any change to the size
• 16:43
  Speaker 2: of the actual drones in the next version?
• 16:46
  Speaker 1: Yes, yes we are.
• 16:48
  Speaker 3: One of the things I think that we've learned with
• 16:50
  Speaker 3: customers is you know you can it's it's it's really
• 16:55
  Speaker 3: great to allow a volume variability in what you can carry.
• 17:02
  Speaker 3: So in our action platform, we're actually engineering a very
• 17:04
  Speaker 3: clever system to have different sort of volumes of boxes.
• 17:08
  Speaker 3: So the frame is not going to be it's going
• 17:12
  Speaker 3: to be a bit better than our current sort of
• 17:14
  Speaker 3: airframe is still a very smaller aircraft.
• 17:16
  Speaker 1: I think we're going to be the smallest in the industry.
• 17:20
  Speaker 3: Or tied at that like the first place perhaps of
• 17:24
  Speaker 3: like a really small footprint. But then you know, there's
• 17:27
  Speaker 3: gonna be a lot of variability on what size boxes
• 17:29
  Speaker 3: you can you can you can transport with that.
• 17:32
  Speaker 1: Gotcha? How big are the drones today?
• 17:34
  Speaker 3: It's it's it's about three feet by three feet.
• 17:40
  Speaker 1: They feed inside a cube of three feet by three
• 17:42
  Speaker 1: feet by fit.
• 17:43
  Speaker 2: Okay, and I think I know the answer now because
• 17:47
  Speaker 2: you mentioned that they fly, you know, three to five
• 17:50
  Speaker 2: hundred feet above the ground and people don't notice them.
• 17:52
  Speaker 2: But I was, you know, curious about routing and if
• 17:56
  Speaker 2: they were allowed to fly over homes or if they
• 17:59
  Speaker 2: kind of had navigate over streets.
• 18:02
  Speaker 3: Yeah, it's actually coming down to how you build your
• 18:07
  Speaker 3: safety case. And flying over homes is a very safe
• 18:09
  Speaker 3: way to conduct operations, right because there's a light with aircraft,
• 18:12
  Speaker 3: and you know, the if you just think purely from
• 18:17
  Speaker 3: an aviation risk minimization perspective, then flying over rooftops is
• 18:22
  Speaker 3: actually the safest. So, yeah, there are some limitations of
• 18:28
  Speaker 3: areas where we don't like overfly, So we don't fly
• 18:31
  Speaker 3: over schools, we don't fly over stadiums when there is
• 18:35
  Speaker 3: like a live event in Switzerland, we don't fly over embassies,
• 18:39
  Speaker 3: and you know a few other locations that are like
• 18:42
  Speaker 3: considered sensitive.
• 18:44
  Speaker 1: But you know, by and.
• 18:45
  Speaker 3: Large, we want to have the straightest possible path from
• 18:50
  Speaker 3: point of collection to point of delivery because that makes
• 18:54
  Speaker 3: everything work better. Right, So your time delivery is shorter,
• 18:57
  Speaker 3: your cost is lower, your is doing the flight is lowest,
• 19:01
  Speaker 3: so you know, it really pays out, pays back in
• 19:04
  Speaker 3: multiple ways.
• 19:05
  Speaker 1: Yeah, it's interesting.
• 19:06
  Speaker 2: Can you talk about the current regulatory climate in the
• 19:09
  Speaker 2: US and overseas and if you know you expect any
• 19:14
  Speaker 2: changes this year, and then you know how quickly you
• 19:18
  Speaker 2: expect drones to be adopted here in the US.
• 19:21
  Speaker 3: Yeah, so twenty twenty six is in my view, the
• 19:28
  Speaker 3: inflection point for drones. To give your sense of scale,
• 19:33
  Speaker 3: there's probably a couple of thousand deliveries by drone every
• 19:36
  Speaker 3: day here in the US today, and I think that
• 19:39
  Speaker 3: number by twenty thirty is going to be at least
• 19:44
  Speaker 3: three million.
• 19:44
  Speaker 1: I think more likely close with five million.
• 19:48
  Speaker 3: And we have like some big entities like Amazon, Walmart,
• 19:52
  Speaker 3: Uber or does. They are all leaning in in pretty
• 19:55
  Speaker 3: big ways to take advance of the opportunity that is
• 19:58
  Speaker 3: being generated now. Now, reason why all this is happening
• 20:01
  Speaker 3: is because there's been a recent change in regulatory in
• 20:03
  Speaker 3: the regulatory framework that you know governs how drones fly
• 20:08
  Speaker 3: in the airspace. Up until recently, you could not fly
• 20:13
  Speaker 3: long distances autonomously. We call this in our industry beyond
• 20:17
  Speaker 3: visual line of sight flying or operations. Now you can
• 20:22
  Speaker 3: actually do that, and the FAA has put out a
• 20:25
  Speaker 3: rule last August that is the proposal for how the
• 20:30
  Speaker 3: airspace is going to work. You know, when you know,
• 20:33
  Speaker 3: for these autonomous long distance operations, Martin and a few
• 20:37
  Speaker 3: other companies that are you know, have advanced like in
• 20:41
  Speaker 3: trusted relationship with the FAA already operate under adversime. So
• 20:45
  Speaker 3: if you were to visit usn't mounted you you would
• 20:48
  Speaker 3: see the operation at scale as it's opposed to be
• 20:51
  Speaker 3: with complete autonomy.
• 20:52
  Speaker 1: Right, So.
• 20:55
  Speaker 3: This will become a role most likely you know, this year,
• 21:00
  Speaker 3: most likely in the next quarter or two. And you know,
• 21:05
  Speaker 3: this is the signal that the big you know, enterprise
• 21:08
  Speaker 3: customers are looking at and say, Okay, this is actually
• 21:12
  Speaker 3: the time for us to now get in.
• 21:14
  Speaker 1: So up until maybe a.
• 21:16
  Speaker 3: Year two years ago, there was like risk with getting
• 21:20
  Speaker 3: involved from a strategic point of view, risk we're getting
• 21:23
  Speaker 3: involved with own delivery, Like should we really be investing
• 21:26
  Speaker 3: time on this now?
• 21:27
  Speaker 1: It's actually slipping.
• 21:28
  Speaker 3: If you're not getting into this, I think you will
• 21:32
  Speaker 3: be missing out and a massive opportunity to re architect
• 21:36
  Speaker 3: I think your customer relationships. So if your restaurant, you
• 21:39
  Speaker 3: really have to be looking into drain delivery, thinking about
• 21:41
  Speaker 3: your strategy, thinking about like okay, will I go first party,
• 21:45
  Speaker 3: will I go third party and rely on orders and breeds?
• 21:48
  Speaker 1: You know, how do I prepare my.
• 21:51
  Speaker 3: Processes in my physical infrastructure for this, because you know,
• 21:55
  Speaker 3: it's going to really change how the space works and
• 21:59
  Speaker 3: it's going to make you know, these tannel and restaurants
• 22:02
  Speaker 3: way more productive from a revenue perspective.
• 22:05
  Speaker 1: Very cool.
• 22:05
  Speaker 2: So what's what do you view matter Net's competitive advantage
• 22:08
  Speaker 2: as outside of the FAA certification.
• 22:11
  Speaker 3: The biggest one is probably what we call our micro
• 22:15
  Speaker 3: hub architecture. So most of our competitors they have to
• 22:21
  Speaker 3: have these big drone parts in the middle of like
• 22:25
  Speaker 3: their operations, uh, the areas where they operate, and this
• 22:30
  Speaker 3: is where their assets are charged, and this is where
• 22:33
  Speaker 3: their assets are maintained and you know, stored with the
• 22:36
  Speaker 3: north flies.
• 22:38
  Speaker 1: This works well for.
• 22:40
  Speaker 3: You know, rural areas or you know, sparse suburban, but
• 22:47
  Speaker 3: when you go to denser suburban areas or even urban,
• 22:51
  Speaker 3: obviously you want your drones as closely as possible to
• 22:54
  Speaker 3: the urgons where the demand is for what to be
• 22:57
  Speaker 3: picked up from, and you want the very close your customer.
• 23:00
  Speaker 3: So that model, I think you know, has some pretty
• 23:05
  Speaker 3: sickly fail limitations there. Mother's model is to embed our
• 23:09
  Speaker 3: assts directly at the merchant's side. So if we're serving Starbucks,
• 23:13
  Speaker 3: for instance, we want our assets directly on that location
• 23:18
  Speaker 3: in our stations and other solutions we're developing that like
• 23:22
  Speaker 3: really attached to the building invisibly, so you know, for
• 23:26
  Speaker 3: that Starbucks or that for that day's called chicken. Right,
• 23:30
  Speaker 3: they know that they have certain delivery capacity. We design
• 23:34
  Speaker 3: our system for the capacity that they. We agree with
• 23:36
  Speaker 3: the customer. For example, they may tell us we want
• 23:38
  Speaker 3: to do one hundred and fifty deliveries a day. We
• 23:41
  Speaker 3: want to pick off like thirty deliveries per hour, So
• 23:44
  Speaker 3: that tells us how many drones we need to to
• 23:48
  Speaker 3: plan for and put up at their facilities and then
• 23:52
  Speaker 3: you know those assets are right there. So every time
• 23:55
  Speaker 3: that you have to do a delivery to a customer,
• 23:58
  Speaker 3: don't pick up the food from that location and takes
• 24:01
  Speaker 3: to the customer, comes back, so you have a very
• 24:04
  Speaker 3: direct out and back. Whereas like in the competitive in
• 24:06
  Speaker 3: the competitors model where you have a central hub, this
• 24:10
  Speaker 3: is always a three legged delivery, right, So if you
• 24:12
  Speaker 3: leave from the hub, you go to the store to
• 24:14
  Speaker 3: pick up, you go to the customer, and then you
• 24:16
  Speaker 3: come back to the have charge again. Right, You have
• 24:19
  Speaker 3: to repeat a three legged sort of delivery process every
• 24:22
  Speaker 3: type you're doing a delivery.
• 24:23
  Speaker 1: So that's really the biggest change.
• 24:25
  Speaker 3: The reason why we're able to have that model is
• 24:29
  Speaker 3: because of you. Number one, the size of our drone
• 24:33
  Speaker 3: is very small, so we can embed it invisibly in
• 24:37
  Speaker 3: a customer's location. And the second reason is because we
• 24:42
  Speaker 3: invested very early on in ground infrastructure that can host
• 24:48
  Speaker 3: those drones when they're not in use and can also
• 24:51
  Speaker 3: pick up packages from the customer without requiring anybody that's
• 24:55
  Speaker 3: the expert of drones to be there. So if you
• 24:57
  Speaker 3: look at our video, right, so someone today would leave
• 25:01
  Speaker 3: the Dave's you know, kitchen and go out fifteen steps,
• 25:06
  Speaker 3: twenty steps, scan their badge and you know they can
• 25:10
  Speaker 3: put the package inside the station and then everything else
• 25:14
  Speaker 3: happens autonomostly, right. So that type of capability is you know,
• 25:20
  Speaker 3: something that we do so very early on back in
• 25:23
  Speaker 3: twenty seventeen was the first time that we articulated this
• 25:26
  Speaker 3: vision that you know, you need to have these assets
• 25:29
  Speaker 3: on the ground in order to have complete end to
• 25:31
  Speaker 3: end autonomy right where you needed at the betch in side.
• 25:35
  Speaker 3: So these are really the two key reasons why we're differentiating.
• 25:38
  Speaker 3: So the microhab concept is powered by that if you
• 25:42
  Speaker 3: sort of compliment, like you know, you add on this
• 25:44
  Speaker 3: our type ofthification, the fact that we can really scale,
• 25:48
  Speaker 3: and you know the fact that we've demonstrated our technology
• 25:53
  Speaker 3: in very hard environments like B two B for healthcare
• 25:57
  Speaker 3: urban where like you know, things are very.
• 25:59
  Speaker 1: Tight in terms of like delivery quality.
• 26:02
  Speaker 3: We've been waiting with ups in twenty nineteen where there
• 26:05
  Speaker 3: only turn deliverery partner today and you know, it's a
• 26:10
  Speaker 3: world class operator that requires excellent quality for the systems
• 26:14
  Speaker 3: that they put their hands on. Right, So we have
• 26:18
  Speaker 3: like technology that has been proven for years and we
• 26:20
  Speaker 3: have also the right model. So frankly, we've been waiting
• 26:23
  Speaker 3: for this moment to come, right, this moment of okay,
• 26:26
  Speaker 3: regulatory is now here, so we can really scale.
• 26:29
  Speaker 2: And when do you see you know, these drones actually
• 26:32
  Speaker 2: having a strong enough ROI that that restaurants get more
• 26:36
  Speaker 2: aggressive in terms of their adoption.
• 26:39
  Speaker 3: Yeah, so I think the ROI is already attractive today
• 26:46
  Speaker 3: and so they get way more attractive over the next.
• 26:47
  Speaker 1: Few years as we scale.
• 26:50
  Speaker 3: So you know, today we try to launch, some customers
• 26:56
  Speaker 3: require that we do pilots, and when we are doing
• 26:58
  Speaker 3: a pilot, it's only subscale, so we have to be
• 27:01
  Speaker 3: creative on how do we make the economics work for
• 27:04
  Speaker 3: them and for us.
• 27:06
  Speaker 1: But if we can get to scale.
• 27:07
  Speaker 3: This is where the economics are to be very competitive
• 27:11
  Speaker 3: with you know, a human doing delivery on a platform today,
• 27:16
  Speaker 3: like if you're going to sort of farm out your
• 27:17
  Speaker 3: delivery even first part delivery right to orders or uber
• 27:22
  Speaker 3: is we are actually getting to the zone of cost competitiveness,
• 27:27
  Speaker 3: even with a much better delivery experience. And then you know,
• 27:30
  Speaker 3: over time, as we scale these, you know, we believe
• 27:34
  Speaker 3: that our cost is going to be below five dollars
• 27:36
  Speaker 3: per delivery, so we can really sort of provide a
• 27:41
  Speaker 3: service that is you know, not going to be more
• 27:44
  Speaker 3: expensive than delivery today, which, by the way, is going
• 27:48
  Speaker 3: to keep on getting more expensive, right because of all
• 27:51
  Speaker 3: the pressures around the marketplace model and labor, et cetera.
• 27:55
  Speaker 3: So but even if you were to freeze that we're
• 27:57
  Speaker 3: going to be less than that and the delivery experience
• 27:59
  Speaker 3: is going to be, then that is better.
• 28:01
  Speaker 2: That's exciting and congratulations are in order. A more major
• 28:04
  Speaker 2: partnership with soft Bank Robotics in America was announced today.
• 28:08
  Speaker 2: Why is soft Bank the right partner for Matternet.
• 28:10
  Speaker 1: We're very excited about that. So soft Bank, you know.
• 28:15
  Speaker 3: They're known you know to take of course big pets,
• 28:18
  Speaker 3: and they go deep into infrastructure as well. What we're
• 28:22
  Speaker 3: trying to build here is the delivered infratructure of the future.
• 28:27
  Speaker 3: You know, we want to make Madernet technology like ubiquitous,
• 28:32
  Speaker 3: like an invisible infrasexual layer that people can just use
• 28:36
  Speaker 3: in order to see things like magically much faster at
• 28:41
  Speaker 3: a lower cost than they do today.
• 28:42
  Speaker 1: Right.
• 28:43
  Speaker 3: So soft Bank Robotics has a lot of experience deploying
• 28:48
  Speaker 3: robotics at scale for enterprise customers. So they've been doing
• 28:51
  Speaker 3: it for years. They know what it takes to build,
• 28:54
  Speaker 3: they know what it takes to put to service installed,
• 28:58
  Speaker 3: they know what it takes to maintain. And our partnership
• 29:01
  Speaker 3: with them is around the ground infrastructure for our systems, right,
• 29:06
  Speaker 3: So it's actually two part partnership. There is a joint
• 29:11
  Speaker 3: go to market, so we will be approaching together certain
• 29:14
  Speaker 3: sort of enterprise customers that will value the fact that
• 29:18
  Speaker 3: sort banking is actually involved.
• 29:20
  Speaker 1: And the second part is like we will be working together.
• 29:26
  Speaker 3: To accelerate manufacturing of the ground assets and also installation
• 29:31
  Speaker 3: and support at some point of the future in the future,
• 29:34
  Speaker 3: that's going to also be a financing element to this,
• 29:38
  Speaker 3: which we're looking to sort of.
• 29:39
  Speaker 1: Bring in as well. So there's a few key reasons why,
• 29:43
  Speaker 1: you know, we feel it's really great much.
• 29:47
  Speaker 3: You know, we're marrying matternets, pasting class technology with soft
• 29:52
  Speaker 3: Pak Robotics, you know, very deep expertise in commercializing and
• 29:58
  Speaker 3: being what they call the AI orchestration leader, you know
• 30:02
  Speaker 3: for physical AI now good stuff.
• 30:06
  Speaker 2: Any other any other new announcements, Like I know I'm
• 30:09
  Speaker 2: being a little greedy here right now. Any other announcements
• 30:12
  Speaker 2: you have either recently or coming up soon.
• 30:16
  Speaker 1: Yeah.
• 30:17
  Speaker 3: So I think by the time the showers we will
• 30:21
  Speaker 3: have announced that we are live in London.
• 30:24
  Speaker 1: And you know, we've been working on this for a
• 30:26
  Speaker 1: while now.
• 30:28
  Speaker 3: We work with the aviation authorities in the UK to
• 30:33
  Speaker 3: make sure that they, you know, are very comfortable with
• 30:36
  Speaker 3: our technology. So we went through like you know, a
• 30:41
  Speaker 3: multi month I think process with them.
• 30:44
  Speaker 1: Uh.
• 30:44
  Speaker 3: And we will be flying in the very center of London.
• 30:47
  Speaker 3: So we're going to start with just customers. So if
• 30:51
  Speaker 3: you're visiting Big Band anytime soon, just look up. You
• 30:54
  Speaker 3: may if you look very carefully, you may see like
• 30:56
  Speaker 3: a tiny actor flying autonomously there. That's going to be
• 30:59
  Speaker 3: a matinet own to our sporting an NHS pockets also
• 31:03
  Speaker 3: all healthcare service puckage. Uh.
• 31:05
  Speaker 2: This is exciting stuff man, I'm looking forward to following
• 31:09
  Speaker 2: the story. Thanks for doing this, Andreas.
• 31:11
  Speaker 1: Oh, it's a pleasure.
• 31:12
  Speaker 2: Thank you, Mike, Yeah, sure thing, And thanks to the
• 31:15
  Speaker 2: audience for tuning in. If you'd like to learn more
• 31:17
  Speaker 2: about maternet, go to maternet dot com. And if you
• 31:20
  Speaker 2: liked our discussion, please share with your friends and colleagues.
• 31:23
  Speaker 2: Check back soon for another interview on chopping it up