Zipline raises $600 million to expand drone delivery in Houston and Phoenix

Drone delivery startup Zipline will begin operations in Houston and Phoenix early this year as part of a major expansion backed by $600 million in new funding.

The latest investment round brings the company's valuation to $7.6 billion. Zipline plans to use the capital to scale its service to at least four additional U.S. states by 2026.

Founded in 2014, Zipline first gained prominence for delivering blood and medical supplies in Rwanda. The company has since pivoted toward the food and retail sectors, operating in the United States, Japan, and five African nations.

In the U.S. market, Zipline has partnered with Walmart and more than a dozen restaurant brands, including Panera and Chipotle. The company reported that its domestic delivery volume has grown by approximately 15% every week for the past seven months.

Zipline continues to face stiff competition in the automated logistics sector from rivals such as Alphabet’s Wing and Amazon Prime Air, which are also aggressively developing their drone technology.

Zipline’s recent $600 million funding round, backed by heavyweight institutional investors including Fidelity and Tiger Global, marks a definitive shift in the autonomous logistics sector. The capital injection signals that drone delivery has successfully transitioned from a speculative "moonshot" to a viable industrial reality. Central to Zipline’s narrative is its strategic pivot: having refined its flight technology through medical deliveries in Africa, the company is now leveraging that operational pedigree to penetrate the hyper-competitive U.S. retail and food service markets.

Rather than attempting to disrupt e-commerce giants head-on, Zipline is positioning itself as a critical "last-mile" infrastructure partner for established brands such as Walmart and Chipotle. This B2B approach allows the company to scale rapidly without the capital-intensive burden of building a proprietary retail ecosystem. The selection of sprawling metropolitan areas like Houston and Phoenix is equally calculated; in these high-traffic, low-density environments, aerial delivery offers a tangible speed advantage over traditional ground-based logistics.

Despite the momentum, Zipline’s growth trajectory remains tethered to a complex regulatory landscape. To achieve true commercial scale, the company must continue to navigate stringent Federal Aviation Administration (FAA) certifications and demonstrate flawless safety records in high-density airspaces. While competition from Alphabet’s Wing and Amazon Prime Air remains formidable, Zipline’s advantage lies in its sheer volume of real-world flight data and a proven track record of operating in challenging environments—assets that may prove decisive as the industry enters its next phase of maturity.

Major chains like Panera and Chipotle adopting drone delivery signals a significant shift in the future of the food service industry. As this technology becomes more accessible and cost-effective, small businesses—including phở restaurants and Vietnamese eateries in our Little Saigons—may soon look to drones as a way to stay competitive and reach their customers more efficiently.