Initiation Report: Nuro

May 30, 2023


Nuro has emerged as a formidable solution to the multifarious challenges posed by last-mile delivery including growing emissions, traffic-related accidents, congested roads, as well as high costs. The trust placed by industry stalwarts such as Kroger, 7-Eleven, and Domino’s in Nuro’s last-mile delivery solutions bears testament to its credibility and efficacy. With a talented and experienced leadership team at the helm, Nuro is well-positioned to continue disrupting and innovating in the ever-evolving last-mile delivery landscape. With its deep roots in robotics, the company is well-equipped to venture into multiple industries beyond last-mile delivery. Nuro’s robotics capabilities are a crucial asset that presents an array of expansion opportunities into sectors such as warehouse management, healthcare, hotels, and campuses, paving the way for accelerated revenue growth and enhanced value. As the only commercially viable autonomous last-mile delivery solutions provider for neighborhoods in the US, Nuro’s best-in-class autonomy stack is a formidable moat and key to its strong competitive position. The company’s recent move to focus on a sequential development model and prioritize scaled and generalized autonomy over commercial expansion will pave the way for accelerated revenue growth, creating significant long-term value for its investors. 


Our views on Nuro are derived from our rigorous research process, involving proprietary channel checks with users, competitors, and industry experts, and synthesizing publicly available information from the company and other reliable sources. 

Investment Thesis 

Nuro is a compelling investment opportunity not only in the fast-growing autonomous delivery market but also in the broader robotics space. As its first product, the company’s focus on local goods delivery has enabled it to develop a solution that is both practical and cost-effective for retailers. Nuro’s autonomous vehicles are purpose-built for delivery, making them more efficient and reliable than other autonomous solutions that have been adapted from passenger vehicles. The company’s vehicles are also designed to be nimbler and more maneuverable than traditional delivery trucks, allowing them to navigate congested urban environments with ease. 

Nuro’s partnerships with major retailers such as Kroger, Walmart, 7-Eleven, and Domino’s have validated its business model and demonstrated the potential of its technology. The company’s vehicles have already completed tens of thousands of deliveries, proving their reliability and scalability. Nuro has also secured significant capital from investors, including Softbank and Greylock Partners, positioning it to continue to develop and expand its technology. 

The autonomous delivery market is poised for explosive growth in the coming years, with the potential to disrupt the traditional logistics industry. Nuro’s innovative business model and technological differentiation make it well-positioned to capture a significant share of this market. The company has the potential to be the undisputed leader in autonomous delivery, with a solution that is both practical and cost-effective for retailers. 

Legal Disclaimer: This report is classified I+ in accordance with Manhattan Venture Research’s Information Access Level Classification System (IALCS). Please see the definition of this classification on the last page of this report.

Key Differentiation

Nuro’s distinguishes itself with its strong focus on a truly generalized and scaled autonomy. By leveraging its deep expertise in robotics, the company is rapidly advancing within the local goods delivery domain. Nuro’s hyper focus on autonomy and commitment to cutting-edge technology is evident in its vehicles, which are equipped with advanced sensor technology and AI capabilities. This integration enables Nuro’s vehicles to navigate complex urban environments with ease, ensuring reliable and secure deliveries even in crowded and challenging settings. A data-driven autonomy stack and a strong partner ecosystem will also enable Nuro to scale to larger operating areas even more rapidly.

Why Nuro is Positioned to Win?

Driving Value in the Supply Chain: By enabling faster, more efficient delivery of goods, Nuro is helping retailers reduce operating costs, increase revenue, and improve customer satisfaction. The company’s self-driving vehicles are well-suited for last-mile delivery, allowing retailers to expand their delivery offerings and reach more customers. In addition, Nuro’s technology can help reduce food waste by ensuring that perishable items are delivered quickly and efficiently. Nuro’s partnerships with major retailers, including Kroger and Walmart, demonstrate the potential for its technology to transform the retail and food supply chain industries and enhance the overall customer experience. 

Solving Key Pain Points in Last-Mile Delivery: Nuro’s innovative autonomous delivery technology is successfully addressing key pain points in the last-mile delivery process. With its advanced AI and machine learning capabilities, Nuro is able to optimize delivery routes, reduce traffic congestion, and minimize delivery times. This helps to alleviate the burden of last-mile delivery for retailers, who have historically struggled with the high costs and logistical challenges associated with this crucial stage of the delivery process. By leveraging cutting-edge technologies to enhance the efficiency, reliability, and safety of last-mile delivery, Nuro is driving significant value for the retail and logistics industries, while also improving the overall customer experience. 

Autonomous Delivery Ripe for Disruption: The US autonomous delivery market is ripe for disruption and presents a promising opportunity for innovative companies to leverage cutting-edge technologies such as AI, machine learning, and robotics to increase operational efficiency, scalability, and cost savings. As the market matures, companies must navigate complex regulatory frameworks, invest in R&D, and strategically partner with key stakeholders to gain a competitive edge and capture the growing demand for contactless, on-demand delivery services. Among the companies well- positioned to benefit from this disruption is Nuro, whose self-driving vehicles and successful partnerships with major retailers demonstrate its ability to navigate regulatory challenges, establish trust among consumers, and effectively address the last-mile delivery demand. Nuro’s commitment to safety, efficiency, and contactless delivery aligns with consumer preferences, further increasing its potential for success in the evolving delivery landscape. 

Differentiated Go-to-Market Strategy: Nuro’s market strategy sets it apart from its competitors. The company has focused on building purpose-built delivery vehicles specifically designed for last-mile deliveries, which are the most cost-intensive and have remained a key pain point in logistics. This strategy has allowed the company to focus on a specific niche and create a highly efficient and effective solution for delivering goods to consumers. While players such as Starship and Kiwibot offer services inside the campus, Nuro has emerged as a leader in autonomous last-mile delivery for neighborhoods. Udelv, another competitor, is more suited for mid-mile delivery and lacks HVAC. Finally, Motional offers last and mid-mile delivery through a compartment in their autonomous passenger cabs. 

Company Overview

Founded in 2016, Nuro is a California-based robotics company, focusing on autonomous delivery solutions. Its core business model centers around providing a fleet of self-driving vehicles that offer safe and efficient transportation of goods. Nuro’s flagship product offering is its autonomous delivery vehicles, which are equipped with advanced technology that allows them to navigate roads and deliver goods with precision and safety. Nuro’s delivery model aims to provide a hassle-free delivery experience by developing proprietary technologies and algorithms that enable its vehicles to navigate complex environments and deliver goods with precision. 

Nuro has raised $2.1 billion across six funding rounds. Gaorong Capital, Greylock Partners, SoftBank, Baillie Gifford & Co., Fidelity Investments, Chipotle Mexican Grill, and Woven Capital are among the key investors in the company. Nuro is the first company to receive an autonomous exemption from the National Highway Traffic Safety Administration.

Nuro has already engaged in several partnerships and collaborations, giving it a competitive advantage over upcoming start-ups. Such partnerships and collaborations will ensure a steady revenue stream for Nuro over the coming years. Moreover, long-term delivery agreements with clients will also aid Nuro in lowering service prices with economies of scale. These strategic initiatives will market Nuro as a highly valuable company in the near future. 

Funding Rounds

Nuro has secured $2.13 billion in funding across six funding rounds. Nuro’s approach of leveraging state-of-the-art hardware and software for last-mile delivery solutions has resonated with both customers and investors, leading to significant investor interest since 2019. Notably, the company raised $940 million in 2019, followed by $500 million in 2020, and $600 million in its latest funding round in 2021. 

The company’s ability to attract investment has continued to grow, with its latest funding round – a $600 million Series D in November 2021 – led by Tiger Global Management with participation from Baillie Gifford & Co., Fidelity Investments, Gaorong Capital, Google Ventures, Kroger, SoftBank, T. Rowe Price, and Woven Capital. Backing from strategic investors such as Kroger and Chipotle provides the company with access to valuable resources and expertise, ultimately improving its offerings and expanding its reach in the market. The latest funding round valued the company at $8.6 billion, marking a 72% increase from its post-money valuation of $5 billion in Series C. 

Nuro’s vehicles are designed with advanced technologies that enable them to navigate complex environments with ease and deliver goods with precision and safety. P2, R2, and Nuro are among the vehicles in the Nuro family. Prior to the deployment of R2 or Nuro, mapping, and testing are conducted with a modified Toyota Prius called P2. Testing and deployment are carried out using R2 and Nuro, with the latter serving as Nuro’s most sophisticated and advanced offering. The details of these three vehicles are mentioned below: 

Key Investment Positives 

Robust Partnerships and Collaborations Support Commercialization at Scale: Nuro has secured partnerships with some of the biggest names in retail and food delivery, such as Walmart, Kroger, Domino’s Pizza, and CVS Health. These partnerships not only provide Nuro with a solid customer base but also help to establish the company as a key player in the autonomous delivery industry.

Large and Growing Addressable Market: The autonomous delivery market – Nuro’s first target market presents a massive untapped opportunity. According to Allied Market Research, the global autonomous last-mile delivery market is expected to reach $90 billion in 2030 from $12.9 billion in 2021, growing at a CAGR of 24.1%. In addition, with a generalized autonomy, the company can target industries such as warehouse automation and robotics security market, among others, further increasing its addressable market massively. With an increasing demand for faster and more efficient last-mile delivery solutions, the market for autonomous delivery is expected to grow rapidly in the coming years. Nuro is well-positioned to tap into this market by leveraging its advanced technology and strategic partnerships with major retailersWith its proven track record of successful deliveries and extensive expertise in autonomous vehicle technology, Nuro is poised to become a key player in the future of autonomous delivery.

Leadership Team: With top talent at the helm, Nuro is leading the charge in autonomous delivery. The company’s co-founders, Dave Ferguson and Jiajun Zhu, have a wealth of experience in robotics, engineering, and autonomous vehicle technology. Additionally, their executive team is made up of seasoned professionals from companies such as Google, Uber, and Tesla. With this combination of expertise and talent, Nuro is well-positioned to lead the charge in autonomous delivery services. Their leadership has already demonstrated an ability to create innovative solutions and bring them to market, as evidenced by their partnerships with major retailers such as Kroger and Walmart. Their commitment to safety, customer satisfaction, and technological innovation will likely drive Nuro’s success in the future.

Focus on Autonomy to Drive Long-Term Value for Investors: With a renewed focus on developing generalized and scaled autonomy, Nuro is positioning itself to be a leader not only in the last-mile delivery industry but also in the broader robotics space. This strategic shift is a testament to Nuro’s commitment to long-term value creation as the technology widens expansion opportunities beyond just retail and food delivery. Specifically, Nuro’s technology can be leveraged in sectors such as healthcare, warehouse management, and autonomous security.

Nuro is a Category Leader: Nuro is a category leader in the fast-growing autonomous delivery market. The company’s self-driving vehicles have attracted significant attention, securing high-profile partnerships with major retailers such as Walmart and Domino’s. With an $8.6 billion valuation and over $2 billion in funding, Nuro is poised to capitalize on the growing demand for efficient last-mile delivery solutions.

Best-in-Class Autonomy Stack: Nuro has developed a best-in-class tech stack that boasts cutting-edge features aimed at ensuring safety, efficiency, and precision. At the heart of Nuro’s tech stack lies robotics, ML, and a full suite of sensors that provides unparalleled real-time data, maximizing safety while simultaneously reducing the time to deployment. Additionally, the system incorporates a comprehensive fallback contingency maneuver that guarantees seamless operations even in the event of an unprecedented failure. Nuro’s hyperlocal deployment strategy – another standout feature that precisely covers delivery areas without the need to map entire cities – helps streamline operations and optimize efficiency. The centimeter-scale details for miles of roads provide an unprecedented level of accuracy, enabling Nuro to deliver goods with pinpoint precision. Its data-driven autonomy stack paves the way for quick commercial expansion in large and congested operating areas. Accordingly, Nuro’s autonomous tech stack positions the company as a market leader, offering unparalleled solutions for complex last-mile challenges.

Being a pioneer in autonomous last-mile delivery vehicles for neighborhoods, Nuro’s machine learning model holds years of additional training over competitors. Moreover, vehicle components such as lidar, radar, 360°cameras, and infrared cameras provide crucial data to fuel the efficacy of the stack. In the future, Nuro can pivot and become a platform provider for other market players. A proven stack that is competent in route planning, fleet orchestration, payments, and tracking the health of the delivery vehicle will present itself as a pragmatic option for new entrants. In addition, Nuro could generate revenue through data analytics and insights, as its vehicles could collect valuable data on customer behavior, traffic patterns, and delivery routes. With this initiative, Nuro will emerge as a highly profitable and asset-light organization.

Key Investment Concerns 

Regulatory Challenges Pose Risk: Nuro’s autonomous delivery vehicles are subject to a complex regulatory environment, which could result in delays or restrictions on the company’s ability to operate in certain markets. For example, in California, where Nuro is based, the company was required to obtain a special permit to operate its autonomous vehicles, which took several months to secure. 

High R&D and Capital Expenditure Requirements: Nuro’s continued success will depend on its ability to invest heavily in R&D and capital expenditures, which could strain the company’s finances and limit its ability to generate profits in the short term. However, investing in R&D can also yield significant long-term benefits, including increased efficiency, improved technology, and enhanced customer experiences. By prioritizing innovation, Nuro can position itself as a leader in the autonomous vehicle industry, which is expected to experience substantial growth in the coming years.

Limited Operational Track Record: Nuro is a relatively new company with a limited track record of success, and the company has yet to achieve profitability. While the company has shown promising growth, investors may be wary of investing in a company with an limited track record. However, a roster of renowned investors, a cumulative raise of $2.1 billion, and an impressive valuation of $8.6 billion reinforce the credibility of the business model. Moreover, with the delivery robots market projected to grow at a CAGR of 33.7% between 2023 and 2028, per Markets & Markets, Nuro is on track to capture a significant share of this rapidly growing market.

Industry Overview

The emergence of autonomous delivery is bringing a platform shift in the logistics industry as companies are now utilizing advanced technologies such as ground-based robots and aerial drones to automate the last-mile delivery process. These autonomous delivery systems come equipped with features such as temperature control and tracking, which ensure that perishable goods are delivered in optimal conditions and customers can easily track their packages.

The integration of autonomous delivery systems can potentially unlock new opportunities such as 24/7 delivery, making it more convenient for customers to receive their packages at any time of the day. Additionally, the elimination of human labor in the delivery process can lower customer costs by removing outlays such as the expectation to tip, making it an affordable and efficient delivery option. 

Technology-Led Transformation of eCommerce and Last Mile Delivery to Support Growth

Technology is transforming last-mile delivery by enabling faster, more efficient, and cost-effective delivery solutions. From advanced route optimization algorithms and real-time tracking systems to autonomous vehicles and drones, technology is streamlining the delivery process, reducing delivery times, and enhancing customer experiences. 

The future of parcel delivery looks increasingly automated, with autonomous delivery vehicles (ADVs) set to become even more prevalent. McKinsey expects the next wave of technology-enabled parcel delivery, with ADVs operating independently without the need for human delivery staff in the next five to ten years. This third wave of automation will revolutionize the delivery industry, drastically reducing delivery times and costs while also improving supply chain transparency and sustainability. 

The potential of significant cost saving is one important factor that will drive the adoption of ADVs. McKinsey estimates a 40% reduction in delivery costs through the use of autonomous vehicles. Studies have shown 90% of Americans want it, if we could overcome the cost hurdle. If we can make this cheap enough that the average American can afford it, it can make their lives better.

As technology continues to play an increasingly important role in the last-mile delivery industry, it is expected to have a significant impact on the industry’s ecosystem, including its competitive dynamics and the distribution of value across industry players. The adoption of technologies such as route optimization, real-time tracking, and autonomous delivery vehicles is already disrupting traditional delivery models and creating new opportunities for companies like Nuro. Additionally, the use of data analytics and machine learning is enabling companies to better understand consumer preferences and optimize their delivery services accordingly, providing a more personalized and efficient customer experience. However, while these technological advancements bring many benefits, they may also lead to increased competition and market consolidation as businesses look to gain a competitive edge. As such, it will be essential for industry players to stay abreast of technological developments and adapt their business models accordingly to remain competitive in the rapidly changing last-mile delivery landscape.

E-Commerce as Percentage of Total Grocery Sales

The underdeveloped e-commerce sector in the grocery industry presents a huge growth opportunity, globally and in the US. This potential will likely be realized as more consumers embrace online grocery shopping and retailers enhance their digital offerings.

Further research from ARK Invest suggested that traffic-integrated robots like those from Nuro could deliver food for 37 cents per trip, which is six times cheaper than a personal trip to the grocery store. This could have particularly large implications for low-income households, which may struggle to access affordable and convenient food options. 

Nuro’s target market is primarily urban areas with high population densities, where traditional delivery methods such as trucks and vans are inefficient and expensive. The company’s initial focus has been on the grocery and food delivery markets, as these sectors have high demand for last-mile delivery services. 

The research from ARK also suggests that the US ranks third globally in average parcel delivery fees, with consumers paying an average of $8.7 per package. In addition, food delivery fees in the US are among the highest in the world, with companies such as Uber Eats, DoorDash, and Instacart charging some of the highest fees in the industry. This makes the adoption of autonomous delivery technologies a potentially attractive solution for businesses looking to reduce costs and remain competitive in a crowded market.

Next-generation technology

Unencumbered by legacy technology and methods, Nuro has taken a clean sheet approach to creating a safe and scalable self-driving system. They have invested in key areas of differentiation that will provide a long-term advantage, including:

• Careful integration of machine learning and engineering approaches

• Differentiated long-range, high-resolution, multi-modal sensor suite.

• Scalable maps that are maximally relevant to the challenges of self-driving

Macroeconomic Factors Propelling the Adoption of Nuro Autonomous Delivery Vehicles

for local communities, Nuro stands at the forefront of reaping the rewards of the prevailing macroeconomic drivers of our time, including the rapid urbanization of society, the ongoing digital revolution, the escalating costs of labor, and the favorable regulatory environment fostered by government entities. As a result of its advantageous position, Nuro is poised to harness these factors to its advantage and cement its position as a leading player in this dynamic and ever-evolving industry.

• Urbanization: As per a report by the World Economic Forum , the global population is expected to reach 8.5 billion by 2030, with 60% of people living in cities. With such a huge population in cities the demand for autonomous delivery robots will rise proportionately.

• According to the United Nations, the world is becoming increasingly urbanized. Today, more than half of the global population lives in urban areas, while the urban share worldwide is rising from around one third in 1950 to around two thirds in 2050.

• Digitalization: Growing digitalization is another macroeconomic factor propelling the adoption of autonomous delivery vehicles.

• According to Gartner, in 2022, intelligent systems controlled 70% of customer interactions.

• According to IDC, 65% of the world’s GDP was estimated to be digital in 2022. From 2020 to 2023, it is predicted that this will lead to direct investments in digital transformation totaling more than 6.8 trillion dollars.

• Rising Labor Costs: Together with additional problems like traffic accidents, congestion, failed deliveries, and growing pollution; rising labor costs make the already expensive last-mile delivery services much more painful. Many of these challenges in the last-mile delivery area will be overcome by the adoption of autonomous delivery vehicles.

• Favorable Government Regulations: Favorable government regulations to promote electric vehicles will also propel the adoption of autonomous delivery vehicles. For instance, the 117th Congress and the Biden-Harris Administration have passed significant legislation that will solidify American leadership in electric transportation and keep the automotive sector competitive globally. These landmark laws—the Infrastructure Investment and Jobs Act and the Inflation Reduction Act—invest hundreds of millions in the electric vehicles market. They will facilitate the transition for both the light-duty and the medium- and heavy-duty sectors by strengthening U.S. manufacturing and supply chains. The Electrification Coalition has long pushed for federal legislation to hasten the uptake of electric vehicles. Four main pillars can be used to group these policies:

• Purchase incentives 

• Charging infrastructure funding 

• Federal fleet electrification funding 

• EV manufacturing and supply chain funding and programs

Key Investment Positives

Robust Partnerships and Collaborations Support Commercialization at Scale

Nuro, a pioneer in autonomous delivery for neighborhoods, stands out from the competition with features such as HVAC capabilities. It’s already gaining traction among grocery stores, logistics players, and restaurants. Moreover, with the growing urbanization and government mandates to reduce emissions, the demand for Nuro bots will rise across the globe. The cost-effectiveness, customer convenience, or regulatory compliance that these bot offer will attract several B2C businesses to collaborate with Nuro as their last-mile delivery partner.

An HVAC system makes Nuro an excellent choice for restaurants and grocery stores. Moreover, its narrow body design and self-cleaning sensors make it suitable for all weather conditions and traffic situations. Its customer satisfaction can be observed from the expansion of collaboration with Kroger in January 2022. Furthermore, its trust among new prospects is evident from its long-term agreement with Uber Eats in September 2022. As these clients have a presence across the globe, the demand for Nuro’s services will grow swiftly. The business has recently started running a 74-acre testing facility at the Las Vegas Motor Speedway where they test the bots in real-world circumstances which makes them ready to cater to larger contracts in the future. Key collaborations of Nuro are mentioned below:

Similar Businesses to Follow Suit

Nuro has established the credibility of its business model with the above-mentioned players. The successful integration of its services across multiple outlets of renowned grocery stores and restaurants is likely to serve as a beacon for similar businesses to follow suit. For example, forging a fruitful partnership with Kroger would facilitate seamless entry into other major retail chains such as Costco, Ahold, and Aldi. In a similar vein, food delivery businesses like Grubhub, DoorDash, Seamless, and their contemporaries would be more inclined to collaborate with a trusted delivery partner of their well-established competitors. Chipotle, which is also a strategic investor in Nuro, also plans to deploy autonomous delivery through its Nuro partnership by 2026. In a recent pilot program with CVS pharmacy in May 2020, Nuro demonstrated its potential in the lucrative prescription delivery segment, which presents a promising avenue for the growth of Nuro’s autonomous delivery bots. 

Collaboration with the Government/NGOs for the Differently Abled

Nuro is also addressing difficulties faced by those with impairments, such as their capacity to drive, their proximity to a shop, and their need to pick up and carry objects. Several consumers in Houston have already received services from Nuro’s bots. The company has made sure that wheelchair users can use the vehicle’s doors and compartments with ease. Also, the lower lockers that will fit inside the compartments can be chosen through Nuro’s mobile delivery app, making them potentially more accessible for those with poor vision or restricted reach. With 11.1% of US adults suffering from mobility issues, 6.4% requiring assistance with running daily errands, and 4.9% with vision impairment; Nuro offers a significant value proposition in this space as well.

Public-private partnerships are critically important when it comes to reaching underserved and underrepresented communities. People with disabilities do not always have transportation and shouldn’t have to rely on someone to help with everyday tasks like grocery shopping. Nuro’s pilot program is filling that gap and letting disabled Houstonians live more independently. I am impressed by the company’s commitment, and I thank Nuro for working to ensure that no Houstonian is left behind. - Houston Mayor, Sylvester Turner

Large and Growing Addressable Market

Numerous direct-to-consumer businesses, including grocers, restaurants, and pharmacies, are projected to adopt autonomous delivery vehicles due to their cost-efficiency, enhanced safety, and reduced emissions. Allied Market Research’s data predicts that the global autonomous last-mile delivery market will expand from $12.9 billion in 2021 to $90.2 billion by 2030, with a CAGR of 24.1%. Nuro has positioned itself as a frontrunner in this swiftly growing market, presenting a lucrative investment opportunity.

Nuro’s cutting-edge technology has the potential to revolutionize last-mile delivery by addressing the high shipping costs and inefficiencies associated with it. By implementing real-time monitoring, efficient route planning, and low delivery costs, Nuro can mitigate such inefficiencies. As per a report from MarketsandMarkets, autonomous delivery vehicles can reduce 80% - 90% of last-mile delivery expenses for the retail sector, making Nuro’s technology highly appealing to businesses.

Growing Robot-as-a-Service (RaaS) Market to Support Growth 

The RaaS model of Nuro will also play a pivotal role in boosting its adoption over the coming years. Delivery robots are expensive and take years for businesses to observe a return on investment, discouraging them from making such investments. Nuro’s RaaS model doesn’t require heavy initial investment and is more flexible, scalable, and affordable than traditional robotics initiatives. Additionally, it enables businesses to easily and quickly scale up or down in response to shifting customer and market demands. Such factors have resulted in a rapid adoption of RaaS. Accordingly, the market for RaaS is expected to reach $41.3 billion in 2028 from $12.6 billion in 2020, per Coherent Market Insights. 

Nuro - A Catalyst in the Transformation Process

According to the World Economic Forum, the number of delivery vans in the top 100 cities worldwide would rise by 36% by 2030. As a result, daily commute times for each passenger will increase by 11 minutes, with a 32% increase in emissions from delivery traffic and a 21% increase in congestion. Nuro, being a top-of-the-mind autonomous delivery brand, will establish itself as a solution provider for businesses to reduce costs as well as governments to improve traffic congestion and the environment.

Last mile delivery vehicles take up an increasing amount of road space as a result of the development in both urban population and e-commerce. These delivery vans contribute to congestion, reduced space in cities, and higher emissions by slowing down traffic. Moreover, last-mile delivery is the most expensive step in logistics among warehousing, parceling, sorting, and remaining supply chain costs. Nuro, a pioneer in autonomous last-mile deliveries for neighborhoods is rising as a pragmatic solution to tackle the above mentioned issues.

Growing Trend of Online Grocery Shopping to Boost Nuro’s Demand

Online grocery purchasers are growing year-over-year in the US. Shopping and other errands represent 43% of American vehicle trips, which equates to spending 60,000 lifetimes every year on such trips. Moreover, the labor cost is adding to the misery in the already costly last-mile logistics. Nuro is offering a cost-effective, environmentally friendly, and safe alternative to traditional last-mile delivery. Therefore, as online grocery shopping increases, the utility of Nuro bots will become further evident. The following chart represents the scenario of online grocery shoppers in the US.

In 2030, the market for real-time autonomous delivery has the potential to reach an addressable market worth approximately $1.2 trillion, per ARK Invest. This would be a significant market opportunity for Nuro. With the continued development of autonomous technology, businesses are likely to explore new ways to leverage this technology to create innovative delivery solutions that can meet the evolving needs of consumers and businesses alike. Overall, the potential for real-time autonomous delivery represents a major market opportunity for businesses, and is likely to drive significant investment and innovation in the coming years.

Long Runway Ahead for Robotics Adoption

The last-mile autonomous delivery market is at a nascent stage. Nuro is the torchbearer in autonomous deliveries for neighborhoods. The opportunities for these bots are massive as the overall last-mile delivery market will be around $288.9 billion by 2031, per Allied Market Research. Owing to the cost-efficiency, regulatory compliance, safety, and environmental friendliness offered by autonomous bots, they will rapidly eat into the share of traditional last-mile deliveries in the above mentioned market. Nuro will benefit heftily in this scenario owing to its early mover advantage.

While driverless delivery technology has gathered momentum during the pandemic, it will easily outlast this period with both companies and consumers recognizing and, already, reaping benefits from it. - Scott Rosenberger (Global Transportation, Hospitality & Services sector leader)

Urban warehousing: Urban warehousing will bring out the full potential of autonomous delivery ecosystem. Urban areas are the primary target market for autonomous deliveries. By utilizing urban warehouses Nuro bots can fully automate delivery systems by sourcing goods for delivery from areas closer to their destinations. This limits their trip distance, lessens their reliance on stores to complete their orders, and lowers the overall number of journeys.

Partnerships with large organizations to boost expansion: Many large corporations have already partnered with Nuro, and this trend will continue in the future owing to Nuro’s technical expertise in this space. Since this market is at a nascent stage and Nuro is among the top-of-the mind delivery bot services provider the adoption of its services will have an competitive edge among other market players.

Surging demand for last-mile deliveries: Growing urbanization and the rising adoption of online shopping are propelling the demand for last-mile deliveries. Therefore, the need for a transformation in last-mile delivery is at an all-time high. Statista reports that worldwide e-commerce sales ratios almost quadrupled between 2014 and 2021. Various firms consider autonomous delivery vehicles to lower costs, delivery errors, delivery times, and energy usage, as well as to deliver packages around the clock, be more environmentally friendly, and reduce traffic fatalities.

Leadership Team

Nuro’s impressive leadership team is a vital asset that positions the company for continued growth, innovation, and effective solutions within the evolving last-mile delivery landscape. Notably, Nuro’s founders were instrumental in establishing Google’s self-driving program, now known as Waymo, demonstrating their extensive experience and expertise in the field. This strategic decision to pivot from autonomous passenger vehicles to autonomous delivery vehicles showcases Nuro’s leadership team’s sharp business acumen, identifying and capitalizing on a significant market opportunity. Nuro’s leadership team’s visionary leadership and expertise in autonomous technology are powerful advantages that are propelling the company forward in the dynamic last-mile delivery market.

Jiajun Zhu, Co-founder and the CEO: Jiajun Zhu, the CEO of Nuro, has extensive experience in the autonomous vehicle space and has previously worked in Google’s autonomous vehicle program. He developed and directed the project’s simulation efforts as well as the perception team. Jiajun obtained his master’s and bachelor’s degrees in computer science from Fudan University and the University of Virginia, respectively. Jiajun has received close to a hundred patents.

Dave Ferguson, Co-founder and President: Dave Ferguson, the president of Nuro, worked as a principal engineer on Google’s self-driving car project before starting Nuro. He established and oversaw the scene comprehension, behavior prediction, machine learning, and computer vision teams. Also, he oversaw the planning team for the Carnegie Mellon University team that triumphed at the 2007 DARPA Urban Grand Challenge. Dave has a bachelor’s degree in computer science and mathematics from the University of Otago, as well as an MS and PhD in robotics from Carnegie Mellon. Dave has over 100 patents and has written more than 60 scholarly articles.

Albert Meixner, Head of Software: Albert Meixner, Head of Software at Nuro, is the man behind developing the best-in-class autonomy stack of Nuro. Before joining Nuro, he held leadership positions in technology companies such as Google and NVIDIA. He also holds a PhD from Duke University.

Andrew Clare, Chief Technology Officer: Andrew Clare, a Massachusetts Institute of Technology alumni, brings technological expertise in the Nuro’s team. Before joining Nuro, he held leadership position in Tesla. His expertise in science and technology has helped Nuro create one of the most sophisticated autonomous delivery vehicle in the market.

Focus on Autonomy to Drive Long-Term Value for Investors

With a renewed focus on developing generalized and scaled autonomy, Nuro is positioning itself to be a leader not only in the last-mile delivery industry but also in the broader robotics space. This strategic shift is a testament to Nuro’s commitment to long-term value creation as the technology widens expansion opportunities beyond just retail and food delivery. Specifically, Nuro’s technology can be leveraged in sectors such as healthcare, warehouse management, and autonomous security.

Rising warehouse labor wages to drive implementation of autonomous delivery bots: Nuro’s holds capabilities to tackle issues in warehouse management. Procuring and retaining warehouse labors are a longer-term structural problem. A lack of accessible workforce, growing labor expenses, and a lack of reliable labor are issues that can be resolved by automation. 

Mobile warehouse robots enable businesses to become less dependent on labor, increase the productivity of their current workforce, and give employees a better working environment. With the aid of integrated sensors and embedded software, autonomous vehicles are able to understand their environment and carry out their jobs. 

Dearth of healthcare workers to augment adoption of autonomous delivery bots: The World Health Organization predicts a shortfall of 18 million health care workers by 2030. Autonomous mobile robots are commonly utilized by healthcare organizations because they can assist with necessary chores like cleaning, telepresence, and the transfer of medication and medical supplies, helping to maintain safe environments and freeing up staff to spend more time with patients. Clinical staff can engage with patients while working at a distance with autonomous mobile robots that have mapping, visual computation, and light detection and ranging (LiDAR) systems. When a doctor is on a hospital tour, an autonomous mobile robot that is operated by a remote specialist or another employee can accompany them and allow the specialist to provide input via an on-screen consultation regarding patient diagnostics and care. With few modifications, a more compact version of Nuro can be utilized in hospitals thereby creating a new revenue stream.

In hospitals, automated guided vehicles transport dishes between the kitchen and the ward, manage trash cans and trolleys, transport linens (clean and soiled), transport sterile supplies, hospital medications and other supplies for laboratories, wards, pharmacies, and operation theaters. Nuro bots with slight modifications have the potential to fulfill such need in hospitals.

Campuses of universities and factories to be relatively easy target market for Nuro: Competitors such as Starship Technologies are already expanding as an autonomous delivery service provider inside campuses of various universities as well as factories. Nuro, having cracked the autonomous delivery space in neighborhoods, will find penetration in autonomous delivery in campuses much easier. 

Nuro to offer outdoor security and inspection: Companies such as SMP Robotics are offering autonomous bot for security and inspection. Nuro bots, with slight modifications can penetrate in this space too for additional revenue stream. The applications include:

• Amusement Park security at night

• Hospitals and Medical Facilities Security

• Mining and construction equipment parking lots

• Industrial plants and manufacturing factories

• Electrical substation and solar farms

• Critical infrastructure protection

• Oil and gas facilities, refineries, chemical plants

• Corporate and university campuses

• Gated communities, resorts, golf clubs

• Smart villa, rancho, luxury estate

• Water supply areas stations and reservoirs

• Data centers

Nuro to offer delivery solutions to small businesses: Nuro’s innovative approach to last-mile logistics has garnered significant interest from small-scale businesses such as bed and breakfast and family-owned restaurants. These inquiries signal a clear opportunity for Nuro to expand its revenue streams and capitalize on the growing demand for autonomous delivery services. Nuro’s robot-as-a-service model allows small businesses to leverage autonomous delivery for their clients, enhancing their customer experience and improving their bottom line. As Nuro continues to expand its reach and deploy its fleet of self-driving vehicles across the country, investors stand to benefit from the company’s unique position in the market and its ability to deliver value to businesses of all sizes.

Nuro - A Category Leader 

Nuro is the leader in its niche market. It is the sole provider of commercially available, autonomous, last-mile delivery solutions for neighborhoods in the US. Its distant competitors Ottonomy, Neolix, and Refraction AI are lagging in terms of commercial adoption in the US. Moreover, they lack HVAC capabilities, in contrast to Nuro, which regulates the cabin’s temperature based on the food item it is carrying. Starship technology and Kiwibot operate on sidewalks and campuses; they cannot operate in the real-world traffic of roads. Udelve is better suited for B2B logistics and offers a shuttle-like service. Moreover, Motional includes a compartment for food delivery in their autonomous cabs. 

Despite the presence of these competitors, Nuro maintains a commanding lead in the autonomous last-mile delivery market. Its unparalleled combination of cutting-edge technology, robust operational capabilities, and unmatched market presence render it an industry leader with tremendous growth potential. 

Best-in-Class Autonomy Stack 

Nuro was founded on the premise of shifting focus from autonomous passenger vehicles to autonomous delivery vehicles. This fundamental principle is evident in the goods-first approach that steered the creation of Nuro’s autonomy stack. Under the approach, comfort-related features became unnecessary in the absence of human occupants and safety was given priority instead. Moreover, Nuro created a high-definition scalable map that has centimeter-level resolution. The final result was capabilities to handle various traffic conditions and a robust fallback contingency. The degree of exposure to various settings determines how effective machine learning models are. Nuro’s machine learning model has already undergone years of training. Therefore, being an early entrant Nuro holds a significant advantage over upcoming start-ups that have their autonomous delivery vehicle in the pipeline.

Nuro has developed a fleet that can be deployed in bulk, is remotely controlled, and requires little human intervention. Additionally, it has an autonomy stack that is tailored to the needs of the communities in which it operates, drastically lowering accidents and iterating continuously to increase safety and efficiency. The company acquired Ike in 2020, an autonomous trucks company, allowing integration of the tech stack-related expertise of both companies to improve the existing offering. Furthermore, Nuro uses Google’s transfer appliance ensuring a steady stream of valuable data with a reduction in operational overhead. The aforementioned elements will unquestionably propel Nuro to be the market leader in its niche. The company is currently a potential investment option because it will see rapid revenue growth as its geographic reach develops.

Patented Technology to Ensure Competitive Edge

Nuro boasts an impressive patent portfolio of 71 patents belonging to 21 distinct patent families. These proprietary innovations serve as a critical competitive advantage and ensure Nuro’s continued dominance in the foreseeable future.

With these remarkable assets in hand, Nuro remains poised for sustained success and market leadership. Its commitment to continuous innovation and its unwavering focus on delivering exceptional value to customers positions it as a top contender in the rapidly evolving last-mile delivery market.

Tech Stack Could Offer Additional Revenue Streams 

As a proven and efficient solution for managing the complexities of running a fleet of autonomous delivery bots, Nuro’s technology stack represents an attractive option for new entrants seeking to establish a foothold in the market. By leveraging this opportunity, Nuro can position itself as an asset-light and highly profitable organization.

The successful deployment of the Nuro autonomous stack across California, Nevada, Texas, and Arizona has demonstrated its dependability. A new entrant in this market can subscribe to this prospective future offering of Nuro instead of building a machine learning model from scratch. Moreover, Nuro benefits by generating an asset-light revenue stream without bearing the production cost of new bots. Furthermore, the mapping and testing data by P2 can also be provided at a premium. Additionally, Nuro will continue to gather valuable data throughout its operations. This data is a goldmine for last-mile analytics. There will be a lot of players ranging from grocers, restaurants, e-commerce players, other delivery bot companies, logistics companies, etc. interested in paying for such analytics.

With the reduction in operational costs by Nuro delivery bots, dense logistics networks will become obsolete, allowing for new innovative solutions in the space. In such a scenario, the implementation and management of autonomous delivery fleet and the provision of white-label solutions to extremely large merchants will be a lucrative opportunity for Nuro.

Reduction in Emissions 

Autonomous delivery bots present a significant reduction in carbon emissions when compared to ICE (internal combustion engine) delivery vans. Moreover, since they are smaller, these bots also consume less energy than an electric van. These bots also have a machine learning model for route optimization therefore they choose the route with lowest carbon footprint. Furthermore, these robots are much quieter than delivery vans and therefore help reduce noise pollution as well.

Key Investment Concerns

Regulatory Challenges Pose Risk

The complex legal environment that surrounds Nuro’s autonomous delivery vehicles could cause delays or hinder the company’s ability to operate in certain areas. Laws will differ from one nation to the next, and Nuro will emerge as the torchbearer for start-ups to follow in this space.

Liability for Traffic Accidents-related Torts

Delivery bots that are remotely controlled hold their operators liable for torts stemming from traffic accidents. However, the accountability for autonomous robots remains ambiguous under the law. In such cases, the last-mile delivery service provider company is likely to be held responsible. As a trailblazer in this field, Nuro’s position is a matter of significant interest for policymakers worldwide. Given Nuro’s demonstrated compliance with relevant regulations in California, Nevada, Texas, and Arizona, it is expected that this trend will continue in other regions. 

Privacy Issues

Nuro and other autonomous delivery robots employ cameras to record deliveries and collect consumer data, which raises concerns about customer privacy and data security. Firms must be cognizant of relevant data protection laws and guarantee that any data collected by delivery robots complies with such regulations, which can vary in severity from country to country. Nuro, with its established track record in California, Nevada, Texas, and Arizona, holds a competitive edge in handling such issues. 

High R&D and Capital Expenditure Requirements 

The cost of entering a new geography is high for Nuro. Upon entering a new area, Nuro’s P2 will engage in mapping and testing. Once, the process is complete R2 or Nuro can be deployed. This requires combined efforts from robotics, machine learning, and human labor. However, once stack update is done, scaling is easier. Restaurants, grocers, pharmacies, and other retail outlets can be served with the same stack. In addition to serving more clients, the stack can be shared with autonomous delivery bots of other start-ups on a subscription model.

Limited Operational Track Record

Nuro’s operational footprint is currently limited to a mere four states within the United States, thereby resulting in a scarcity of pertinent financial data that could offer insight into the company’s performance. Despite this, it is important to acknowledge the vast potential that Nuro possesses in terms of their hardware, software, astute leadership, and a sustainable business model that promises to yield substantial revenue growth in the foreseeable future.

Nuro’s commendable attributes, such as a solid clientele, first-mover advantage in the market, an adaptable tech stack, a competent leadership team, and a sustainable solution for efficient, secure, and eco-friendly last-mile deliveries, collectively serve as compelling reasons for any discerning investor to consider Nuro as a viable investment opportunity.


Revenue Outlook and Implied Valuation

Disclaimer: Nuro has not released audited financials and is not expected to do so until it files for IPO. The revenue model and the implied valuation is preliminary and is based on Manhattan Venture Research’s internal assumptions and will be adjusted to reflect any incremental information

While it is early to project revenue estimates for Nuro, based on our in-house model the company is well positioned to generate material revenues given its disruptive offerings. The company recently adopted a sequential development model with a hyper-focus on autonomy to reach true generalized and scaled autonomy faster. In the meantime, the company will also look for more efficient commercial deployment models with its industry partners. This new approach that will provide a leaner model for AV development, will mean a slower commercial expansion in the near term. In the long term, however, this will mean a much faster and smoother expansion for the company. Accordingly, based on our projections, we expect Nuro to achieve significant commercialization scale-up from 2027 onwards, primarily through geographical expansion in last-mile deliveries. Moreover, improved autonomy is expected to significantly impact Nuro’s regulatory approvals. With safer and more effective autonomous vehicles, regulatory bodies are likely to have greater confidence in Nuro’s technology, leading to faster approvals.

As a result, we expect Nuro to capture a 5-7% share of the overall autonomous last-mile delivery market by 2030. Furthermore, we believe that the adoption of a truly generalized and scaled autonomy stack will unlock new opportunities for expansion into other sectors, including warehouse management, healthcare, hospitality, campuses, outdoor security & inspection, and small businesses. These additional revenue streams will contribute significantly to Nuro’s bottom line by 2030. Given these assumptions and projections, we estimate that Nuro’s revenue will experience substantial growth in the coming years, estimates for which are as follows: 

For comparison, we looked at the unit metrics of Starship Technologies, a slightly older competitor of Nuro, which reported an average of 10,000 daily deliveries to various campuses in early 2022. However, Nuro has a wider customer base that includes neighborhoods, along with a much larger storage capacity of approximately 23 times greater than Starship. Moreover, Nuro boasts a robust customer base that includes major players such as Kroger, Uber Eats, and Domino’s, with which it is exploring more efficient deployment models.

While Nuro’s current hyper-focus on enhancing autonomy may slow down its commercial expansion in the short term, the investment in R&D is expected to lay the groundwork for rapid commercialization from 2027 onwards. With this increased focus on autonomy, we anticipate that Nuro will outperform Starship’s delivery numbers by a staggering 10 to 15 times. Based on these assumptions, we forecast the following revenue estimates:

Based on Approach 1 and Approach 2, Nuro’s financials are triangulated as follows: 

Private Market Valuation

Nuro is creating a market in the neighborhood’s last-mile delivery space by introducing autonomy. However, Aurora is relatively similar to Nuro as both companies are into self-driving technology. Aurora went public 8 months after its Series C round. Since Nuro is focused on the costliest pain point in logistics, it is reasonable to project a markup of 10-20% on its last valuation to derive a current valuation.

For reference, when Tesla went public, the company got a markup of 98% on its last private round. Similarly, in the case of DoorDash, the markup was 103%. Though these public players are not directly comparable to Nuro, they have autonomous driving tech and food delivery as one of the offerings in their respective portfolios.

Comparative Public Multiples

The following table shows the multiples of public companies operating in last-mile delivery, robot-as-a-service, autonomous vehicles, and food and grocery delivery. As a leader in this emerging space, Nuro is creating a niche for autonomous last-mile delivery in neighborhoods.

While evaluating the company’s implied valuation using public multiples might seem tempting, it falls short of painting a comprehensive picture of Nuro’s potential. This is because Nuro is creating a new market space, and therefore, the public peers’ multiples may not reflect the true value of Nuro’s innovative and unique offering.

Nonetheless, the public multiples do provide a useful reference point for Nuro’s future valuation. Given Nuro’s disruptive technology in the last-mile delivery space, it is reasonable to expect Nuro to command a premium over its public peer multiples. Nuro’s innovative approach to delivery challenges traditional logistics models and promises to revolutionize the industry.

About Manhattan Venture Partners

Our Research Methodology

Manhattan Venture Research provides clients with accurate, timely, and innovative research into the companies and sectors we cover. To that end, we have established an experienced team of analysts, researchers, economists, and industry veterans that focus exclusively on private companies with a proven track record of success. Producing quality research on a private company is uniquely challenging. Our analysts communicate with ex-employees, early investors, VCs, competitors, suppliers, and others to gather valuable information about the company under coverage. This information enables us to create unique financial models that value the underlying company and provide insight to our clients and industry experts, leveraging years of experience working for bulge bracket firms. Manhattan Venture Research reports include business and financial aspects of late-stage companies. These reports include but are not limited to industry overviews, competitor analysis, SWOT analysis, products (existing and in development), management and key directors, risks and concerns, other proprietary channels, historical financials, revenue projections, valuations (using various matrices and valuation recommendation), waterfall analysis, and a capitalization table.

Information Access Level Classification System (IALCS)

Manhattan Venture Research uses an Information Access Level Classification System (IALCS) to make clear the degree of access offered by the company(s) covered in all research reports.

Each research report is classified into one of three categories depending on its classification. The categories are:

I++: The company covered by the research report provided substantial disclosures to Manhattan Venture Partners.

I+: The report was prepared following partial disclosure by the company, including publicly available financial statements, and/or is based on conversations with past or present company employees.

I: All reports are prepared using a mosaic research approach. Not all companies are willing and able to provide substantive access to management and information. In I reports no direct access was granted. 

About the Analyst

Santosh Rao

Santosh Rao has over 25 years of experience in equity research with a primary focus on the technology and telecom sectors. He started his equity research career at Prudential Securities and later moved to Dresdner Kleinwort Wasserstein, Gleacher & Co, and Evercore Partners, where he followed Telecom and Data Services. Prior to joining Manhattan Venture Partners, he was the Managing Director and Head of Research at Greencrest Capital, focusing on private market TMT research. Santosh has an undergraduate degree in Accounting and Economics, and an MBA in Finance from Rutgers Graduate Business School. While at Gleacher & Co he was ranked leading telecom equipment analyst by Starmine/Financial Times

-The MVR Team


I, Santosh Rao, Head of Research, certify that the views expressed in this report accurately reflect my personal views about the subject, securities, instruments, or issuers, and that no part of my compensation was, is, or will be directly or indirectly related to the specific views or recommendations contained herein. 

Manhattan Venture Research is a wholly-owned subsidiary of Manhattan Venture Holdings LLC (“MVP”). MVP may currently and/or seek to do business with companies covered in its research report. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. This document does not contain all the information needed to make an investment decision, including but not limited to, the risks and costs.

Additional information is available upon request. Information has been obtained from sources believed to be reliable but Manhattan Venture Research or its affiliates and/or subsidiaries do not warrant its completeness or accuracy. All pricing information for the securities discussed is derived from public information unless otherwise stated. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Past performance is not indicative of future results. MVP does not engage in any proprietary trading or act as a market maker for securities. The user is responsible for verifying the accuracy of the data received. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments, or strategies to particular clients. The recipient of this report must make its own independent decisions regarding any securities or financial instruments mentioned herein. Periodic updates may be provided on companies/industries based on company-specific developments or announcements, market conditions, or any other publicly available information.

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