Grubhub is piloting the use of delivery robots, manufactured by self-driving startup Yandex, at Ohio State University this academic year. The convergence of autonomous vehicle technology and robotics is bringing a future that we only saw in movies to us today, and rapidly. However, the accuracy of autonomous technology aspect has always been the stumbling block that has prevented widescale deployment in the case of delivery. This LA startup has found the answer. Coco is a last-mile delivery service that uses remote human-piloted robots to power deliveries. The technology is versatile enough to be used by restaurants, groceries, convenience stores, and pharmacies; basically, all the essentials that you have become accustomed to ordering on-demand. These industries have been forced to adopt technology in a rapid fashion to address the pandemic and Coco makes local delivery faster, smarter, and more cost-efficient. In fact, Coco estimates that it is able to save up to 30% on delivery times while reducing the environmental footprint. The company, founded in 2019, already has 50+ customers using the technology and has scaled the team to 120.
LA TechWatch caught up with CEO and Cofounder Zach Rash to learn more about the state and future of the delivery market, the inspiration for the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $43M, and much, much more.
Who were your investors and how much did you raise?
Coco recently closed a $36 million Series A funding round led by Sam Altman, Silicon Valley Bank, and Founders Fund, bringing our total funding to $43M. Coco’s investors are some of the biggest names in California’s food and beverage industry including the founder of SBE, Sam Nazarian and the founders of Mendocino Farms, Ellen Chen, and Mario Del Pero.
Tell us about your product or service.
Coco is a Los Angeles-based remotely-piloted robot delivery service that is on a mission to redefine what food delivery can be by giving restaurants a more reliable, and consumer-forward option for delivery. Coco benefits both stakeholders and the community by:
- Providing faster and more reliable delivery for merchants and their customers
- Empowering businesses to increase profit
- Accommodating a more streamlined & manageable system for restaurant staff to support delivery
- Achieving zero-emission delivery
- Reducing traffic by reducing the number of cars on the road
What inspired the start of Coco?
Before Coco, I attended UCLA, where I studied computer science and electrical engineering and cofounded the Connected and Autonomous Electric Vehicles (CAEV) consortium. While at CAEV, my cofounder Brad Squicciarini and I became interested in the application of robotics within the outdoor logistics space, but as we continued our research, we were surprised to learn how slow-moving and research-focused the robot delivery industry was, even after nearly a decade of testing. We set out to create a solution that could deliver immediate value for merchants and their customers. From there, the first incarnation of Coco was set into motion.
How is it different?
Unlike other robot delivery solutions, Coco always prioritizes the merchants’ needs above all else. Instead of pouring money and time into developing autonomy technology without any timeline on bringing it to market, we’ve focussed on mastering our understanding of the merchants’ pain points and operationalizing a solution quickly. To accomplish this, we’ve made the strategic decision to leverage human-piloting, which allows us to have 100% control over the quality of our service and to bring it to market immediately to test and learn. Each day we operate in the market, we learn something new about how we can better serve our merchants. Coco is currently partnered with 50+ enterprise and small to medium sized merchants, providing them with a solution that reduces costs, streamlines kitchen operations, and wows their customers.
What market you are targeting and how big is it?
Coco is targeting the on-demand delivery market, particularly the food, grocery, convenience, and pharmacy segments. Hyper-local, on-demand delivery in these segments is growing exponentially. In the U.S. alone, roughly 6,000,000 deliveries happen within 2 miles of restaurants and grocery stores each day. We believe we can create a more optimistic version of the future of delivery that is sustainable and affordable for merchants.
Coco is targeting the on-demand delivery market, particularly the food, grocery, convenience, and pharmacy segments. Hyper-local, on-demand delivery in these segments is growing exponentially. In the U.S. alone, roughly 6,000,000 deliveries happen within 2 miles of restaurants and grocery stores each day. We believe we can create a more optimistic version of the future of delivery that is sustainable and affordable for merchants.
What’s your business model?
Coco is a last-mile delivery service that deploys human-operated sidewalk robots to transport goods from merchants to their customers. Coco integrates with merchants directly, plugging into their existing ordering channels. When a customer within the serviceable radius places an order through one of those channels, a Coco delivers the order up to 30% faster than car-based delivery services. Benefits to our merchants include reduced cost, consistent and reliable service quality, preserved food conditions, and streamlined kitchen operations.
How does it work?
Customers place orders via their favorite existing delivery channels such as Doordash, Grubhub, Postmates, UberEats, etc, or via the merchant’s custom website or app. If the delivery address is within that merchant’s robot-serviceable delivery radius, the customer will receive notice that their order is being delivered via Coco. We’ll provide an ETA and a text notification as the robot approaches its destination. To retrieve the order, the customer walks outside, texts UNLOCK, and lifts their items out of the Coco.
How has the business impacted by COVID-19?
Though the challenges Coco solves in the on-demand delivery market existed long before COVID-19, the pandemic certainly accelerated the adoption timeline of new delivery technologies, especially in non-restaurant segments like grocery, convenience, and pharmacy. This acceleration of demand outpaced driver supply, which has opened up an amazing opportunity to fill that gap for merchants. Beyond the pandemic, merchants and their customers will continue to benefit from Coco’s service through reduced costs, streamlined operations, consistent service quality, and faster delivery times.
What was the funding process like?
We have been extremely fortunate to have such supportive investors fueling us to expand as quickly as we are.
What are the biggest challenges that you faced while raising capital?
At the beginning, we had to overcome the sentiment that delivery robots weren’t working, since the space is almost a decade old and no existing players are operating at scale. But after we started executing and expanding quickly with large merchant partners doing real deliveries, we’ve been able to raise money quickly from the best in the world, including some of the most prominent figures in the restaurant industry.
What are the milestones you plan to achieve in the next six months?
Coco is currently expanding into other areas of California as well as into a number of other major U.S. cities across the country. Coco’s most recent funding round will be used to help match the demand we are experiencing in the industry by allowing us to meet both the quality and quantity needs of customers and merchants.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Solve a big problem for someone and show that you can grow it quickly with a small team. Investment will always follow that formula.
Where do you see the company going now over the near term?
In the near term, we are continuing our expansion across Southern California. We have partnered with national restaurant brands like SBE (Umami Burger) and are actively scaling across many brand locations. We are continuing to launch with new merchants and in new geographies every day and will have expanded to several other U.S. markets before the end of year.
What is your favorite restaurant in LA?
Lately, I’ve been really enjoying Wabi on Rose in Venice. The team there is phenomenal (Madison is the best!), the ambiance is vibrant, and the menu is top-notch. Our headquarters isn’t too far away either, which means we end up there perhaps too often. If you go, order a spicy mezcal margarita, the tuna crispy rice, the Rick James roll, and the scallops!
