SkyCell raises a $35 million series C round and enters COVID-19 vaccine distribution market
SkyCell, a Swiss company developing smart containers for transporting medicines and vaccines, is announcing a significant round of funding. On top of a $62 million round that closed last year, the company has now raised a $35 million Series C to improve shipping of temperature-sensitive drugs – including COVID-19 vaccines. The round, which is a […]
SkyCell, a Swiss company developing smart containers for transporting medicines and vaccines, is announcing a significant round of funding. On top of a $62 million round that closed last year, the company has now raised a $35 million Series C to improve shipping of temperature-sensitive drugs – including COVID-19 vaccines.
The round, which is a combination of equity and debt financing, lists investors from the Middle East, including DisruptAD and (the VC arm of ADQ, an Abu Dhabi-based sovereign wealth fund), and SHUAA (a major UAE asset management and investment banking firm). The investment also includes, per the company, “China-based” and Zurich-based family offices,” and investment from Mobiliar, a major private Swiss insurance company.
This round brings the company’s total funding to $133 million.
Essentially, SkyCell has developed a shipping container that maintains temperature, controls vibration, and is outfitted with sensors that continuously report the status of the cargo. The idea is to minimize temperature excursions – harmful fluctuations that can spoil drug products – and other damage that happens during shipping.
An oft-cited number in the vaccine logistics community comes from a 2005 World Health Organization report suggesting that as many as 50 percent of vaccines are wasted – partially thanks to temperature, logistics, and shipping issues. The biopharma industry uses more optimistic numbers. SkyCell co-founder and CEO Richard Ettl says the industry typically factors in about a 4% failure rate for established markets and 12% failure rate for emerging markets when it ships drugs around the world.
So far, SkyCell’s temperature excursion rate is less than .1%, according to an outside audit of the technology.
When TechCrunch last covered SkyCell back in April 2020, the company had been working with eight major pharmaceutical companies and was in trials with seven more. The company now “works with the majority of the top 20 pharmaceutical companies,” per a PR representative – though the company wouldn’t provide further details.
Before COVID-19, the company was delivering about 250 million vials of pharmaceutical products per year across all customers. Since then, the technology has moved forward in one big way: It’s been redesigned to be able to transport mRNA-based COVID-19 vaccines, as well as the raw materials needed to make them.
The newly designed containers use dry ice – a necessity to achieve the temperatures about -80 to -60 degrees Celsius preferred (but no longer always required) to transport vaccines like Pfizer’s.
When it comes to ultra-cold vaccine shipping, dry ice is basically unavoidable. (UPS Healthcare makes its own dry ice and has been upping production to meet COVID-19 vaccine demand ). SkyCell’s tech, says Ettl, uses far less of it than competitors. It uses 100 kilograms of dry ice for about 120 hours of use, though it can store vaccines longer, if more dry ice is added upon arrival.
“The competition would need 200 kilos or more of dry ice,” he says. “So that was a major feat of engineering.”
Ettl says the company is now transporting either raw materials or vaccines for three top COVID-19 vaccine makers (he did not disclose which ones – though by the ultra cold temperature requirements, you might be able to guess.
“For two [of the three] we almost exclusively transport the raw material that comes out of the factory,” he says.
Another major step forward is the company’s expansion from flying into trucking services.
Though many vaccines first arrive in countries via plane, it’s often trucks that bring vaccines to central medical warehouses. Ideally these trucks are refrigerated, but those aren’t always available, which means that cold boxes and large-scale hauler trucks get used instead, according to a 2021 McKinsey report.
The expansion into trucking greatly increases the reach of SkyCell’s vaccine distribution network. The company has been involved in European distribution of vaccines for one major vaccine player, Ettl says.
“Before we were not doing trucking,” says Ettl. “Our container is used on trucks to transport these -80 Celsius and very cold temperature [products] around. So this was definitely a big change.”
Ettl says that COVID-19 vaccine shipping will likely continue to play a role in the company’s future. But it’s not the core of their business. Many pharmaceutical products from cancer drugs to other vaccines require cold chain handling.
The International Air Transport Association’s Center of Excellence for Independent Validators in Pharmaceutical Logistics suggests world sales of cold-chain drugs and biologics will surpass $440 billion by 2024 – and that doesn’t include COVID-19 vaccine spending.
Within that industry, there also appear to be three macro-trends, the report continues. There are an increasing number of container reuse services, and development of more recyclable shipping containers, and finally the use of electronics to track shipments in real time.
For its part SkyCell overlaps with all of these trends. The fact that SkyCell’s container is reusable is a “major driver” that has helped the company obtain pharmaceutical partnerships, Ettl says. The company has also installed sensors within the boxes, and collects a constellation of data points on every shipment.
Ettl believes that SkyCell is poised to respond to industry-level changes and increasing demand for cold-chain products. So far, the numbers seem to be in the company’s favor.
“We have never lost the product in the company’s history,” he says.