Magway plans to sell capacity on its underground system to online retailers and logistics companies.
British start-up Magway has raised £1 million in crowdfunding for its underground e-commerce delivery network.
Magway hopes to reduce road congestion and air pollution by moving logistics transportation through new and existing pipe infrastructure via pods powered by magnetic motors. The system combines proprietary linear synchronous motor technology with existing open-source hyperloop solutions.
The company has raised over £1.2 million via crowdfunding platform Crowdcube, beating its original target of £750,000, with three days to go.
Its e-commerce delivery solution would deliver parcels between distribution and consolidation centres via a predominantly underground network of pipelines. The company says its system could accommodate all of the UK’s online grocery deliveries and 90 per cent of online general merchandise purchases from the likes of Amazon.
The crowdfunding investment will be used for further patent registrations and to expand the core team.
Magway noted that almost 45 per cent of its Crowdcube investors are aged between 18 and 30 years old.
Anna Daroy, managing director, Magway said: “We’ve been overwhelmed by the response to our crowdfunding campaign. It shows that people, particularly younger generations, are prepared to back innovative businesses, such as Magway, in their drive to change existing, outdated modes of transportation, and in doing so, help improve air quality and the wider environment.”
"We need big ideas, such as Magway, which represents a step-change in the way we currently deliver goods."
“Without a significant step-change in managing how billions of parcels and goods reach our doors, delivery traffic will continue to increase along with the levels of toxic air we breathe,” she added. “As the first major economy in the world to legally commit to zero emissions by 2050, the UK Government has taken positive steps towards reducing global warming, but more can be done and ‘business as usual’ won’t cut it. Therefore, we need big ideas, such as Magway, which represents a step-change in the way we currently deliver goods.”
Daroy said that built at scale, Magway could help reduce the UK’s C02 emissions by 6 million tonnes per annum by 2050, equivalent to a third of the delivery vehicle emissions in the UK.
A recent report by the World Economic Forum found that urban last-mile delivery emissions are on track to increase by more than 30 per cent by 2030 in the top 100 cities globally (by population).
With seed funding and a grant from Innovate UK in place, Magway has completed a demonstrator system at a test facility in London.
For initial commercial pilots, Magway is looking at short, dedicated routes delivering duty free and food and beverage from consolidation centres to airport terminals. In most cases, these would be located entirely on private land where limited or no external approvals are required.
The company providing the use case would fund such pilots and costs are estimated at between £3 million and £10 million, depending on complexity and length.
Magway is then targeting construction of a wider UK network of pipes, spanning hundreds of kilometres, to start in 2023, serving logistics companies and online retailers. The company will sell capacity on the system, rather than the system itself.
It says an 850-kilometre network of pipes in London would cost between £5 billion and £7 billion and could be completed in 20 to 25 years. There is potential to recommission and incorporate unused infrastructure, such as disused mail and gas networks, the company says.
“Once installed, Magway will significantly reduce the operational costs of transportation and deliveries by more than 70 per cent with minimal ongoing costs for decades to come,” Phill Davies, co-founder and commercial director, Magway, said.
Magway also envisions that its transport system could be beneficial for greenfield developments that are being planned in the UK and internationally.
Magway also envisions that its transport system could be beneficial for greenfield developments that are being planned in the UK and internationally, such as Old Oak and Park Royal (OPDC) in west London, five garden towns along the OxCam corridor and Sidewalk Labs’ Toronto Waterfront development.
“In these cases, where new groundworks and utilities are being installed, it makes sense to consider an ‘omni utility’ corridor that could include Magway’s system being installed at the same time,” Davies said.
“Like all revolutionary transportation systems there will be challenges,” Davies admitted.
These include “rights of way and convincing investors, governments and the general public to support and believe in a new, unfamiliar solution."
This has always been the case with revolutionary modes of transport, such as the introduction of rail, canals, cars and aeroplanes,” Davies added.
However, he said that because of the focus on transporting goods, the challenges are simpler than those faced by similar hyperloop systems proposed to transport people.
“In these cases, there is a need to persuade people to travel on the system; the operating speeds require a vacuum to operate; there is a single point of failure within the system; and it’s a much larger and more costly solution,” according to Davies.
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