Startup Neubility is cornering the last-mile market with its end-to-end RaaS (Robotics as a Service), raising $23.5M • TechCrunch
Known for their fierce competition in the food delivery market, South Korean retail companies face growing competition. Market GMV has more than doubled to $19 billion during the pandemic, but turning a profit is still a long way off for most food delivery startups. The main concern is of course manpower. The labor shortage is affecting businesses as they struggle to absorb increased delivery volume while providing timely services, while striving to cut costs.
Flexible workforce and micro fulfillment centers have been a viable solution, but the problem of labor intensity remains as companies have no choice but to use human couriers.
Meanwhile, a fast-growing startup is drawing attention to the adoption of robotics in delivery. Neubility, identifying itself as a RaaS (Robotics as a Service) company, aims to reduce last-mile inefficiencies by disrupting the logistics supply chain. The company uses its in-house developed robot “Neubie” to perform various errands in dense urban areas.
After a complete planning of 6 months of pilot projects, Neubility is about to sign its first commercial contract. It began making pilot deliveries last October for Songdo residents and college students, and quickly expanded pilots to downtown Seoul neighborhoods including Gangnam, Yeouido, and Songpa, with counterparts such as 7- Eleven. During the initial pilot test in Songdo, the company experienced surprisingly high public acceptance for delivering the robot. During the first half of the two-month trial, the robots participated in around a quarter of total delivery orders. However, as word spread about new cheap and cute robots in town, 52% of customers started choosing robot delivery over courier delivery. The strong preference for instant but cheap robotic delivery gave the company the belief to stick to its mission statement, “Automating Urban Streets”. After the first successful trial, Neubility gradually moved to Korea’s largest metropolis to gain operational experience in a busy urban environment. During Q2 trials, stores saw a rapid increase in sales from robots, with a 221% increase in delivery orders. Meanwhile, Neubility is going through a second pilot phase with 7-Eleven, expanding the service to multiple stores in Gangnam, Seoul. Companies will continue their efforts to improve the customer experience and update service scenarios.
Neubility is currently expanding to private suburban golf clubs throughout 2-3Q. The startup’s first B2B business use case will launch at major golf clubs nationwide in the second half of 2022, and more than 200 bots will be deployed at golf clubs within the year.
The company is also preparing abroad. It recently introduced a new product line named “NeubieGo”. The company explains that NeubieGo is a set of APIs and solutions needed to monitor and manage Neubie, which can be easily integrated with pre-existing application platforms. With the combo, the company is actively seeking opportunities to satisfy various needs in the global delivery market. Neubility will be the first Korean delivery robot company to attend TechCrunch Disrupt in October, where it plans to showcase Neubie to its American counterparts.
In order to create a sustainable business flow for “fast and cheap delivery”, Neubility has made it a priority to become independent of outsourcing. From hardware-related development such as mechanism design, embedded systems to core technology, such as V-SLAM and sensor fusion, Neubility has internalized development costs. This allows the company to focus on connecting what people need most with autonomous robots: a cost-effective, low-maintenance product. Neubility ensured price competitiveness by using multi-camera V-SLAM instead of using high-priced LiDAR. Based on V-SLAM, the robot perceives its surroundings for localization and detects obstacles to evade animate and inanimate objects. Large amounts of data are optimized with in-house developed technology, which helps Neubie maintain its performance with a central processing unit.
Led by IMM Investment, one of the largest VCs in Asia’s fourth-largest economy, Neubility recently successfully closed a $21m Series A funding round in May. Many big name VCs and CVCs have been seen in this cycle, such as retail giant Lotte and Shinsegae, SK Telecom, Kakao Investment, KB Investment and more. Samsung C&T subsidiary Samsung Welstory and 42dot, a company recently acquired by Hyundai Motor Group, also made strategic investments. This should bring new business opportunities in various operational sites to scale its business. Expanding the business to various verticals will enable the company to achieve sales-led growth. With real data on driving performance in dense, highly populated areas, the company develops B2B partnerships with companies that need to handle large volumes of on-demand deliveries in busy cities.