The urgency of the Covid-19 pandemic may be in the past, but the need for fast and secure ways to send valuable, fragile medicines and their components around the world is still quite relevant. SkyCell has developed hardware and software to run that transport process better — and greener, it says — than before, and it has now raised some significant capital to continue expanding its business.
The Swiss startup has closed out its Series D at $116 million, which it will use to double down on working with companies operating in Asia and the U.S. Tybourne Capital Management and CCI are together putting in $59 million, on top of the $57 million SkyCell had raised from M&G Investments’ purpose-led private assets strategy, Catalyst, last year. Prior to this Series D, the company had raised around $133 million.
This latest investment was made at a higher valuation than the 2023 tranche, and SkyCell is now valued at $635 million, the company told Madconsole.
We first covered SkyCell’s rise during the Covid-19 pandemic, when the world was suddenly focused on the fragility of certain vaccines that need to be kept at specific temperatures to keep from spoiling.
The startup had actually been around for years before that: It was founded in 2012 in Switzerland, when Richard Ettl and Nico Ros were tasked with designing a storage facility for a big Swiss pharma giant. The executive overseeing the project brainstormed that Ettl and Ros’ work could be applied to transportation containers, and thus SkyCell was born.
It turned out that SkyCell’s system was perfect for vaccines: The company uses “smart containers” that are powered by machine learning and software to maintain strict temperatures, humidity levels, and levels of vibration. It has also built a software logistics system called “SkyMind” to transport drugs around the globe on behalf of their makers.
The demand for transporting medicines securely has only grown, and SkyCell has grown 50% annually over the last several years. Its customers today include pharmaceutical companies as well as a large network of the cargo partners that transport those items.
SkyCell says it now moves some $2.5 billion worth of pharmaceutical products and ingredients a month — that includes hundreds of millions of vaccine doses, cancer treatments, diabetes medicines and diagnostic treatments.
Ettl, the startup’s CEO, credits the company’s traction to the simple fact that more products have come to market and there are more people in the world who need them. But, he added, the need has actually grown more complex for another reason: Decarbonization.
“Six months ago, we had a feeling that this was going to happen,” he told Madconsole. It’s estimated that pharmaceutical companies — including the manufacturing, packaging and transport of medicines — account for 4.4% of global emissions, and that’s become a big problem for the industry to fix.
“First, it was optional for pharma companies,” Ettl said. “Now it’s more clear: They’ve all had to make commitments to decarbonize their supply chains.”
That’s played into SkyCell’s hand well, Ettl said, since the startup has been wanting to help reduce the carbon footprint of air transportation “for almost a decade.”
The company’s containers are, on average, about half as heavy as those of its competitors, “which means 50% less CO2.”
As an example of how that can impact the bottom line, Ettl estimates that for a big pharma company, it would cost roughly 2% of sales to “go green” — to reduce its carbon footprint substantially in one area or another. (This article, which explains how Bayer moving to more sustainable packaging would cost it 2% of its sales, explains how this is worked out.)
“When you look at the percentages, that’s not a lot. But in absolute terms, we’re looking at a billion dollars in costs. So when that billion can become $500 million, people start to pay attention.” He said that two of SkyCell’s largest customers have mandates to bring down their CO2 emissions. “So using us has become part of their key decision criteria.”
The company’s containers and logistics software are still its core products, but interestingly, Ettl said it has unexpectedly also found itself selling components of its products to customers. For example, SkyCell is selling one of its smart thermometers, which it developed for its containers, to a pharma customer.
“With its lead in hardware as well as software and tracking platform offering, SkyCell is well positioned to become the technology partner of choice to the global pharmaceutical industry well beyond its current cold-chain logistics business,” said Bosun Hau, MD of Tybourne. “Global supply chains are becoming increasingly complex and managing risk is a board level issue for nearly every sector — for pharmaceutical companies, in particular, it is mission critical for getting life-saving medications into the hands of patients. SkyCell has developed a comprehensive state of the art system combining hardware, software and big data analytics that is transforming a pharmaceutical logistics industry that has seen little innovation over the past several decades.”
