Investment Memo:

Spun out of + backed by Uber, Serve Robotics is a leading maker of fully Autonomous Mobile Robots (AMR’s) for sidewalk deliveries. The company has a signed multi year contract with Uber Eats representing $70M in revenue, among contracts with other major customers.

The company is led by an exceptional + technical founding team. Ali Kashanshi (CEO - PhD in robotics / computer vision), is a previous 2x exited founderwho sold his last company to Postmates where he went on to become VP of Special Projects before becoming Head of Serve Robotics at Uber and eventually spinning out the division. He is joined by Touraj Parang (President & COO) – previous VP of Corp Dev at GoDaddy, Dmitry Demeshchuk (Co-Founder & VP Software) – previous Engineering Director at Postmates, MJ Chun (Co-Founder & VP Product) – previous Director of Product at Postmates, and Euan Abraham (SVP Hardware) – a previous VP Hardware at Latch and GoPro. 

Early this year, Serve became the first autonomous robotics company to complete commercial deliveries at Level 4 autonomy, and the only one that delivers at a lower cost-per-delivery than human couriers. Serve’s goal is to replace 90% of the $100B short-distance delivery market currently fulfilled by gas-burning cars, which would remove the equivalent of one million vehicles off US roads alone, and could one day reduce global CO2 emissions by 2%.

Serve is currently operating robots that have made over 20,000+ commercial deliveries in the last year. They experienced a 99% fulfillment rate, a 95% on-time delivery rate (compared to 83% by traditional couriers), and an astounding 0 incidents of courier error or fraud. The company has a signed multi year contract with Uber Eats representing $70M in revenue opportunity. This has led to a strong pipeline of customers representing 1 million robots which equates to $18B in potential revenue. Pipeline customers include 7-Eleven, Delivery Hero, Google, Walmart, Pizza Hut, Papa Johns, IHOP, UPS, Square, ChowNow, among others. 

The company currently has 2/3rd of its Series A committed with Uber and a notable VC (can not disclose) co-leading. They are looking for one more lead VC to fill out the rest of the round and the deal won’t be completed before the holidays so the founders are doing this $5M inside round. I was introduced to Serve through one of their investors Delivery Hero Ventures, and given I am helping the founders fill out the remaining allocation on the Series A, we were invited to participate a small amount on this Series A extension. The founders plan to close the Series A in Q1 2023, so we have an opportunity to invest now at a $65M cap / 20% discount which will convert into the Series A. Investors in this insider round include Uber ($2M lead check), Delivery Hero Ventures (Jeff, Yodawy), Wavemaker Partners ($1M check - Blue Bottle, Figs), Neo VC ($1M check - Bubble, Scale), among others. We have pro rata rights.

Here is why we are excited to have secured allocation in Serve Robotics...

$310B and Growing Opportunity: Consumers spend nearly $310 billion annually on short-distance delivery across the pharmacy, grocery, restaurant, and same-day retail industries. This is trending up as consumers want their products and services almost instantly.

Massive Problem: Today, 50% of home deliveries are under 2.5 miles and generate 2% of global CO2 emissions (700M tons of GHG) because last mile delivery logistics are broken. The founders of Serve are constantly asking themselves questions like why do we move 2lb burritos in 2 ton cars or why shipping from China costs $2 and $8 from Chinatown. With technology advancements there has to be a better way. This is where Serve comes in.

An Innovative Solution: Spun out of + backed by Uber, Serve Robotics is a leading maker of fully Autonomous Mobile Robots (AMR’s) for sidewalk deliveries. Serve is the technology leader in hardware design, autonomy, and safety. It is the only company that’s operating at level 4 autonomy commercially, and the only one that delivers at a lower cost-per-delivery than human couriers. Serve’s goal is to replace 90% of the $100B short-distance delivery market currently fulfilled by gas-burning cars, which would remove the equivalent of one million vehicles off US roads alone, and could one day reduce global CO2 emissions by 2%.Here is a video introducing the first wave of urban robots!

Level 4 Autonomy:  Early this year, Serve became the first autonomous vehicle company to complete commercial deliveries at Level 4 autonomy. This milestone means Serve Robotics' latest generation of robots are able to operate routinely without human intervention, and can rely on their onboard capabilities to ensure safe operation. This industry first is the result of nearly five years of work by the Serve Robotics team and represents a major step forward for the autonomous vehicle industry, significantly lowering the barriers for autonomous delivery at scale. 

Scaling Traction:  Serve is currently operating robots that have made over 20,000+ commercial deliveries in the last year. They experienced a 99% fulfillment rate, a 95% on-time delivery rate (compared to 83% by traditional couriers), and an astounding 0 incidents of courier error or fraud. The company has a signed multi year contract with Uber Eats representing $70M in revenue opportunity. This has led to a strong pipeline of customers representing 1 million robots which equates to $18B in potential revenue. Pipeline customers include 7-Eleven, Delivery Hero, Google, Walmart, Pizza Hut, Papa Johns, IHOP, UPS, Square, ChowNow, among others. To support their growth, the company has a multi-year manufacturing partnership with the largest tier 1 automaker in the US and an asset financing agreement.

Technical Founding Team: The company is led by an exceptional + technical founding team. Ali Kashanshi (CEO - PhD in robotics / computer vision), is a previous 2x exited founder who sold his last company to Postmates where he went on to become VP of Special Projects before becoming Head of Serve Robotics at Uber and eventually spinning out the division. He is joined by Touraj Parang (President & COO) – previous VP of Corp Dev at GoDaddy, Dmitry Demeshchuk (Co-Founder & VP Software) – previous Engineering Director at Postmates, MJ Chun (Co-Founder & VP Product) – previous Director of Product at Postmates, and Euan Abraham (SVP Hardware) – a previous VP Hardware at Latch and GoPro. 

Strong Roster of Co-Investors: Investors in this insider round include Uber ($2M lead check), Delivery Hero Ventures (Jeff, Yodawy), Wavemaker Partners ($1M check - Blue Bottle, Figs), Neo VC ($1M check - Bubble, Scale), among others. Previous investors include Nvidia (has invested $10M), Scott Banister (early in Uber, Paypal), 7-Ventures (Super Coffee, Muse Nutrition), Neo VC (Bubble, Scale), Western Technology Investment (Allbirds, Toast), Long Journey Ventures (Carta, Flexport), Think + Ventures (AngelList, LilyAI), Founder of FitOn (Russell Cook), among others.