Kiwibot has quietly been testing its robots – specially designed to look cute and non-threatening – for the past few weeks in the Valley, as well as more recently at a major university campus the company won't yet name. If all goes well, Kiwibot will begin offering delivery to students through as early as next month before expanding to Santa Monica and other parts of the city after that.
"L.A. is going to be our most important city this year," Chavez said. "In the first five months of the year we plan to employ 100 robots here in the city, and we expect that by the end of the year we're going to have around 400 robots deployed."
Postmates, which is now owned by Uber, has been testing a handful of delivery robots in West Hollywood since April. While those are accompanied by a human chaperone, the Kiwibot robots set out on their own, though operators take over remotely for more complex tasks like crossing the street.
Kiwibot has already made over 120,000 deliveries since 2017 during rollouts at University of California, Berkeley, University of Denver, and San Jose, where it partnered with Shopify and Ordermark. But L.A., with its vast geographic footprint, is a whole new degree of difficulty.
"It's a great challenge for us," said Chavez.
Kiwibot chose L.A. because the city already has a high adoption of food delivery, it is home to potential partners like ChowNow and Ordermark, and the city has been a willing collaborator through its Urban Movement Labs (UML), mostly by sharing data on city streets and sidewalks.
"We trust L.A. to be the best new market for us because the food delivery habit is already there, and we feel backed to scale in an organized and socially responsible and sustainable manner," said David Rodriguez, Kiwibot's head of business.
After a confrontational approach between cities and ridesharing and e-scooter companies, Lilly Shoup, UML's interim executive director, says L.A. is trying to be more collaborative with delivery robots.
"I think we've learned that it's important for city transportation agencies to get ahead of new technology before they appear on city streets," Shoup said. "It's important to understand their business models and proactively develop policies."
UML is also working on a pilot to deliver goods via drone by 2022 and in both instances Shoup says the technology can help reduce pollution and congestion since most deliveries now are made via cars.
"It's really exciting to think about new ways to reduce the environmental impact of delivery," Shoup said.
Robots substantially bring down the cost of delivery, which could help restaurants that operate on thin margins during even the best of times and have been devastated this year. But it will also mean fewer delivery jobs, most of which have been preserved as contract work in California with the recently passed Proposition 22.
Restaurants typically pay between 15% to 30% on orders placed with delivery services like Postmates or Grubhub and drivers are hardly getting rich. In fact, they often make less than minimum wage.
Kiwibot charges fees of a couple dollars on each order – which can be absorbed by the restaurant or passed onto customers. The company says its cost per delivery is now $2.98 but as it scales and the technology improves it can shave the cost down to $1.23 by the end of 2022.
Right now, Kiwibot robots – which cost between $2,500 and $4,000 each – can only operate in a 1.5 mile radius but the company's next generation can go eight miles and is large enough to fit a 12-inch pizza.
Photo by Ben Bergman
Will the Public Accept Robots?
Even when the technology is ready, Kiwibot has what may be a tougher obstacle to overcome – public acceptance. Public safety commissioners in West Hollywood raised concerns about Postmates' robots and even in tech-friendly San Francisco, a city lawmaker, worried they might run into pedestrians, tried to ban them.
Kiwibot warns potential investors on its crowdfunding page: "Delivery bots have proved controversial in some regulatory environments with some cities, like San Francisco, putting out laws that make it difficult for us to deploy. If this became widespread we would have trouble going to market."
Chavez says he spends a great deal of time thinking about how he can get the public to be comfortable with robots.
"There is a sector of people that are concerned about robots and I think that it is very important to listen to them and to get their feedback on everything. but robots are going to happen," Chavez said.
The robot also has a sign affixed to the back to clarify that it is not recording any video, something that was added after homeless people in San Jose feared they were being spied on.
There is a "black box," which records in case of an emergency, but none of the devices have been stolen — so far.
Even though local regulations can allow for robots to go as fast as 10 mph, Chavez has found a speed of 6 mph makes people feel safer.
There are also important visual considerations. Kiwibot's robots look nothing like the hulking devices conjured up in sci-fi movies like "Transformers" or "The Terminator." They are more like a plastic cooler on wheels with lights on the front that resemble a smiling face.
"The new version is even more cute," said Chavez. "It's like a squirrel on a rock."
Taking a page from nature, the design is deliberately playful and small.
"When you see an animal and it is bigger than the width of your shoulders you feel threatened," Chavez said. "So we have made sure that the robot is never going to be wider [than you] so that people don't feel threatened."
Coronavirus has also been helpful, helping accelerate the adoption not only of delivery but also of robots – who you don't have to worry about coughing on you.
Competition with Bigger Robot Deliveries
Kiwibot, which is based in San Jose, has raised more than half $1 million from more than 650 investors in its latest crowdfunding campaign, to bring its fundraising total to over $3 million.
That pales in comparison to not only Uber but also much larger rivals Starship, a robot food delivery service launched in 2014 by two Skype co-founders that plans to rollout deliver to 100 universities by next summer and Nuro – an autonomous vehicle startup founded by two ex-Google engineers valued at $4 billion. The company received regulatory approval last week to operate on city streets in the Bay Area.
But with global autonomous last-mile delivery projected to grow from $11.16 billion next year to $76 billion by 2030, Kiwibot sees room for multiple competitors.
"In L.A. right now we are talking with multiple partners, very big companies," said Chavez.
"Everything is moving very fast," he added, as his robot inched along the sidewalk, heading back to the lab to continue more testing.
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Now comes the harder part: producing them at scale.
The Torrance-based defense startup raised a $1B Series C at a $13B valuation. The financing includes $800M in equity and a $250M revolving credit facility, making it one of the largest recent raises for an LA defense technology company.
JPMorganChase’s Strategic Investment Group, Andreessen Horowitz and Carlyle co-led the round. Lightspeed Venture Partners, Lavrock Ventures, Altimeter, General Catalyst, T. Rowe Price and LA-based Interlagos Capital also participated.
Castelion will use the capital to ramp production of Blackbeard, its low-cost hypersonic strike missile, while developing a longer-range precision weapon and new defensive systems. Hundreds of millions of dollars will go toward expanding manufacturing at Project Ranger, the company’s 1,000-acre production campus in New Mexico.
Image Source: Castelion
Blackbeard was designed in California, will be built in New Mexico and is expected to enter service in 2027. Castelion says it has already secured more than $500M in U.S. military contracts over the past 18 months and moved the missile from a clean-sheet concept to an official program in fewer than four years.
That timeline is central to Castelion’s pitch. Traditional defense programs are often associated with long development cycles, limited production runs and eye-watering costs. Castelion is applying the rapid testing and vertically integrated manufacturing approach popularized by commercial space companies to weapons production.
But a $13B valuation changes the standard. Castelion is no longer being judged as a promising startup with an impressive prototype. It is being funded like a company expected to become a major part of the American defense industrial base.
The question is no longer whether a startup can build a hypersonic missile. It is whether one can manufacture thousands of them without losing the speed, discipline and cost advantages that made it disruptive in the first place.
For LA’s defense ecosystem, that shift matters. The region has become home to a growing number of companies promising to modernize how America builds critical hardware. Castelion now has the capital, contracts and facilities to show what happens when that promise reaches the factory floor.
The next test will not be in a pitch deck. It will be in production.
More from this week’s LA startup and venture scene below.
🤝 Venture Deals
LA Companies
- Long Beach based Ampaire raised a $19M Series B led by DiamondStream Partners, with strategic participation from Alaska Star Ventures and IAGi Ventures, bringing its total funding to $68M. The hybrid-electric aviation company will use the capital to expand flight operations, produce additional Eco Caravan aircraft, advance regulatory certification and scale its manufacturing capabilities. - learn more
LA Venture Funds
- SUM Ventures participated in AssistMe’s €6.5M funding round, which was led by CRB Health Tech and Vorwerk Ventures and included several returning investors. The German care technology company will use the capital to expand across Europe, prepare for a U.S. launch and further develop alea, its digital platform for supporting caregivers and improving nursing-home operations. - learn more
- CIV led Hypercubic’s $5.3M seed round, with participation from Y Combinator, Afore Capital, Pioneer Fund, Multimodal Ventures and several angel investors. The San Francisco startup will use the capital to develop AI agents that can analyze, document and rewrite decades-old COBOL systems, helping enterprises modernize critical mainframe software faster and with less risk. - learn more
- Plus Capital participated in Wispr Flow’s $280M Series B, led by Menlo Ventures and joined by existing and new investors, valuing the AI voice company at $2B. The funding brings Wispr’s total capital raised to $361M and will support its expansion beyond dictation into meeting tools and proprietary speech technology, including its new Canto model. - learn more
- Alexandria Venture Investments participated in Leal Therapeutics’ $30M Series A extension alongside new investor Eli Lilly and returning backers including OrbiMed, Newpath Partners and SV Health Investors’ Dementia Discovery Fund. The biotech company will use the funding to advance clinical trials of LTX-001 for schizophrenia and LTX-002 for ALS, with initial schizophrenia trial data expected by year-end. - learn more
- BroadLight Capital participated in Higgsfield’s $400M Series B, led by DST Global and joined by investors including Goldman Sachs Alternatives, Smash Capital, Fifth Wall and Intel Capital. The AI video and image platform, now valued at $5.4B with $700M in annualized revenue, will use the funding for R&D, global infrastructure, AI hiring and international expansion. - learn more