Danvers, Mass., drone startup CyPhy Works turned some heads Tuesday morning when it said the investment arm of UPS was named not as just one of the investors in the Danvers drone startup's $22M Series B Round, but also as a strategic partner.
Whenever someone mentions drones and the name of a delivery company in the same sentence, it's hard to not think of Amazon's drone delivery service that's been in development for a few years.
When I asked CyPhy CEO Helen Greiner about it, this is all she had to say: "I’m going to have to let you use your imagination on that one."
However, Greiner was able to speak with me about the other aspects of the funding announcement. Perhaps most importantly, the Series B will help CyPhy launch the commercial version of its Persistent Aerial Reconnaissance and Communications vehicle system. The funds will also help "accelerate adoption of drones into public safety, construction, agriculture, journalism, mining, defense and other fields."
So what are we supposed to do with the mystery surrounding the UPS Strategic Enterprise Fund's involvement? After a call with a UPS spokesman, the picture became much clearer.
The UPS fund essentially serves as a research and development arm, so it invests startups of various stages that are in an area of interest for UPS, whether that's because its technology may have a disruptive impact on UPS' business or a complementary one, company spokesman Steve Gaut told me.
In making these investments, he said, UPS aims to learn from its portfolio companies, which now includes CyPhy, so that it can gain a competitive advantage, whether that's by changing services or "implementing a lesson learned."
"We invest so we can rapidly learn where they have more expertise than we have.
"We invest so we can rapidly learn where they have more expertise than we have," Gaut said, adding that the cost of developing UPS' own research teams to study these technologies would be more expensive.
So when I asked Gaut about what UPS expects to get out of CyPhy, he told me this: while UPS is studying the drone startup's technology for general purposes, the company is also looking at how the startup's knowledge of the use of drones could assist with the company's humanitarian disaster relief efforts.
UPS announced earlier this year it was studying the use of drones for humanitarian disaster relief efforts. According to the company's website, UPS in 2012 provided $6.5M in funding, technical support and in-kind services for its Humanitarian Relief Program and made more than 200 in-kind shipments to 35 countries.
"We looked at the ability to deliver small packages and vials of medicine using a drone in an area where there had been significant destruction to roads" Gaut said of the study.
Outside of its specific work with CyPhy, Gaut said UPS is "evaluating drone alternatives in the humanitarian aid delivery area and for improved high storage visibility use in warehouses or other processing centers," noting that's the extent of its current activities with drones.
In other words, we probably shouldn't expect a UPS drone delivery service anytime soon. However, one could argue, CyPhy's work with UPS could yield something better than delivering toilet paper within 30 minutes: an improved way to help people in crisis.
