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Project Skyway — Board Approval Deck

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Project Skyway — Board Approval Deck

Supporting Brief — Proposed Acquisition of DroneUp, LLC (Board Confidential)

Author: Walmart Corporate Development Date: August 2026

Project Skyway — Board Approval Deck: Supporting Brief

Prepared by: Walmart Corporate Development | Classification: Board Confidential | Date: August 2026

This document supports the 11-slide board deck in the Slides tab. It records the storyline, the key facts behind each slide, and the reference documents each figure is drawn from. All transaction and financial figures are illustrative pending diligence and negotiation.

Reference Documents

The deck is built entirely from four internal documents, referenced by name:

Project Skyway — Investment Memorandum: Acquisition of DroneUp [F-1] — the primary source: thesis, the ask, illustrative deal envelope, and strategic rationale.
DroneUp Company Profile: Strategic Fit Analysis for Walmart [F-2] — fit analysis, competitive landscape, valuation framework, buy-vs-build model, risks and deal structure.
Beating Amazon: Walmart's Strategic Playbook for Online Sales & Drone Delivery [F-4] — strategic context: Walmart's e-commerce position, proximity advantage, and the immediacy stack.
DroneUp Post-Merger Integration Plan [F-5] — Day 1 / Day 30 / Day 100 integration workstreams underpinning the integration timeline slide.

Deck Storyline (11 Slides)

Title — Project Skyway, board confidential, figures illustrative.
Executive Summary & The Ask — approve exclusive negotiations and confirmatory diligence for 100% of DroneUp, LLC at an illustrative $150–300M (60–70% cash, 30–40% milestone earn-out); target LOI within 45 days [F-1].
Strategic Context — drone delivery is Walmart's most differentiated weapon against Amazon, currently run entirely through third-party operators; the window is time-limited as FAA Part 108 finalizes [F-1][F-4].
Market Landscape — chart of per-delivery economics and operator scale: Zipline 1.4M+ deliveries, Wing 450K+, Amazon Prime Air ~16K at ~$63/delivery; DroneUp is the only acquirable full-stack operator [F-2].
Why DroneUp (Fit Scorecard) — ATOMx/AirMap UTM, Uncrew M:N software, FAA Part 135, DBX ground infrastructure, 20,000+ pilot network, three years of Walmart-specific data [F-1][F-2].
Transaction Overview (Illustrative) — structure, consideration mix, earn-out milestones [F-1][F-2].
Valuation Summary — chart of illustrative EV ranges vs. comparable operators (A2Z $50–150M, Matternet $200–350M, Flytrex $200–400M; Zipline ~$7.6B off-scale) and buy-vs-build NPV ($455.5M vs. $617.0M @ 8.5% WACC = $161.5M advantage to Buy) [F-2].
Synergies — cost-per-delivery glidepath from ~$30 today to ~$5.50 by Year 5 (illustrative), driven by M:N operations (60–80% labor reduction), DBX automation (40–50% ground-ops reduction), and BVLOS radius expansion (~300% more serviceable households per hub) [F-2].
Integration Timeline — Day 1 (protect) / Day 30 (nothing unknown) / Day 100 (scale-ready) gates, then Phase 2 platform integration (months 7–18) and Phase 3 scaling to 50+ locations (months 19–36) [F-2][F-5].
Risks & Mitigations — unit economics, talent retention, integration complexity, Part 108 timing, competitive response [F-2].
Recommendation & Next Steps — approve the resolution; LOI in 45 days; stand up the Integration Management Office pre-close [F-1][F-5].

Key Figures Register

Figure	Value	Status	Source
Consideration envelope	$150–300M (60–70% cash / 30–40% earn-out)	Illustrative	[F-1]
Buy vs. Build NPV @ 8.5% WACC	$455.5M vs. $617.0M — $161.5M Buy advantage	Illustrative model	[F-2]
Y5 cost per delivery (Buy vs. Build)	$5.50 vs. $12.00	Illustrative model	[F-2]
DroneUp est. revenue	~$9M (2024E, third-party estimate, unaudited)	Estimate	[F-1][F-2]
Employees	~291 (2026), from ~371 peak	Reported	[F-1]
FAA Part 135 air carrier certificate	Granted Dec 2024; ~5-mile BVLOS radius	Fact	[F-1][F-2]
Certified pilot network	20,000+ (largest in U.S.)	Reported	[F-2]
Walmart drone deliveries since 2021	150,000+	Reported	[F-4]
Walmart drone-enabled sites by 2027	270+ planned	Plan	[F-1][F-4]
Store proximity	4,700+ stores; 90% of U.S. within 10 miles	Fact	[F-4]
Prior partnership economics	~$30/delivery vs. sub-$7 target	Reported	[F-2]
Amazon Prime Air	~16,000 deliveries; ~$63/delivery (2025 est.)	Estimate	[F-2]
Comparable EV ranges	A2Z $50–150M; Matternet $200–350M; Flytrex $200–400M; Zipline ~$7.6B	Illustrative estimates	[F-2]

💭Illustrative Figures

All valuation, consideration, NPV, synergy, and cost-per-delivery figures in the deck are illustrative — drawn from the internal buy-vs-build model and third-party revenue estimates, not audited financials or negotiated terms. Confirmatory diligence is a condition of the recommendation.

Project Skyway

Board Approval Deck — Proposed Acquisition of DroneUp, LLC

Walmart Corporate Development | Board Confidential

August 2026 — All financial figures illustrative pending diligence and negotiation

Executive Summary & The Ask

Acquiring DroneUp converts Walmart from a customer of third-party drone operators into the owner of a proprietary drone-delivery platform — Amazon's vertical control at a fraction of the cost.

$150–300M

Illustrative Consideration

Part 135

FAA Air Carrier Certificate

$161.5M

NPV Advantage vs. Build

45 Days

Target to LOI

The Ask: Approve exclusive negotiations and confirmatory due diligence for 100% of DroneUp, LLC

Illustrative envelope of $150–300M — 60–70% cash at close, 30–40% earn-out tied to cost-per-delivery and integration milestones
Target signed LOI within 45 days; window closes as FAA Part 108 BVLOS rules finalize

Strategic Context — Why Drone Delivery, Why Now

Drone delivery is Walmart's single most differentiated weapon against Amazon — yet today it runs entirely on operators Walmart does not own.

4,700+

Stores — 90% of U.S. Within 10 Miles

150,000+

Walmart Drone Deliveries Since 2021

270+

Drone-Enabled Sites Planned by 2027

100%

Volume Dependent on Wing & Zipline

No ownership, no control: Wing (Alphabet) and Zipline set the technology roadmap, cost curve, and offer no exclusivity — both can serve Target, Kroger, or Costco tomorrow
DroneUp is available at a depressed valuation: anchor customer lost, headcount down ~21% from peak, ~$9M revenue — yet its core assets are intact
The window is time-limited: once FAA Part 108 finalizes, DroneUp's scarce Part 135 certification differentiates less and new customers could reset its valuation upward

Market Landscape — Economics Decide the Air War

Per-Delivery Economics ($, Illustrative)

Post-Part 108, competition shifts from regulatory access to cost and execution.

Operator scale & availability

Zipline — 1.4M+ deliveries; ~$7.6B valuation → Minority Stake Only
Wing (Alphabet) — 450K+ deliveries; Walmart's current partner → Not Available
Amazon Prime Air — ~16K deliveries at ~$63 each → Competitor
DroneUp — full-stack, Part 135, proprietary UTM → Acquirable

Key insight: DroneUp is the only operator that is both independently acquirable and owns a proprietary UTM/airspace platform

Why DroneUp — Strategic Fit Scorecard

Every asset maps directly to a capability gap in Walmart's current partner-only model.

DroneUp Asset	What It Gives Walmart	Fit
ATOMx / AirMap UTM platform	Walmart-owned orchestration layer across Wing, Zipline & owned fleets	★★★★★
Uncrew M:N operations software	1 operator : 5–10 drones — the single largest per-delivery cost lever	★★★★★
FAA Part 135 certificate (Dec 2024)	Scarce BVLOS authority (~5-mile radius); held by only a handful of U.S. operators	★★★★★
3 years of Walmart operational data	Delivery zones, demand curves, workflows — perishable and irreplaceable	★★★★★
DBX autonomous ground infrastructure	Climate-controlled lockers + reverse logistics at store endpoints	★★★★☆
20,000+ certified pilot network	Largest U.S. drone workforce, distributed across Walmart's footprint	★★★★☆
Standalone revenue (~$9M est.)	Small base — value is the platform, not the P&L	★★☆☆☆

Defensive imperative: in a competitor's hands, DroneUp's Walmart-network data is a direct intelligence loss

Transaction Overview (Illustrative)

$150–300M

Illustrative Envelope

60–70%

Cash at Close

30–40%

Milestone Earn-Out

100%

Of DroneUp, LLC

Structure

100% acquisition of DroneUp, LLC — majority cash with milestone-based earn-out
Retention packages with 2–3 year vesting for CEO, CTO, and top regulatory-critical personnel, executed at close
<0.05% of Walmart annual revenue; 7–15% of the autonomous-delivery M&A envelope

Key earn-out milestones

Sub-$10/delivery within 18 months; sub-$7 within 36 months
ATOMx integrated with Wing/Zipline operations
Scale to 50+ Walmart drone locations on DroneUp technology
Key personnel retained through vesting period

All figures illustrative pending diligence and negotiation.

Valuation Summary (Illustrative)

Illustrative EV Ranges — Acquirable Comparables ($M)

Zipline (~$7.6B) excluded — off-scale and not fully acquirable.

Buy vs. Build — 5-Yr NPV of Spend @ 8.5% WACC ($M)

Buy is $161.5M cheaper on NPV, delivers +6.6M more cumulative deliveries over 5 years
Y5 cost per delivery: $5.50 (Buy) vs. $12.00 (Build)

Synergies — Owning the Cost Curve (Illustrative)

Cost-per-Delivery Glidepath ($, Illustrative)

Sub-$7 reaches parity with ground delivery ($6–10) — as owner, Walmart captures 100% of the improvement.

Cost synergies

M:N operations (Uncrew + Part 135): 60–80% labor reduction — the largest single lever
DBX automation: 40–50% reduction in ground operations cost
BVLOS radius: ~300% more serviceable households per hub; 3–5× revenue per hub

Strategic synergies

ATOMx orchestration across Wing, Zipline, and owned fleets as sites scale to 270+
Pharmacy delivery across ~4,600 Walmart pharmacies; DroneUp's medical programs provide a head start
Data defense — keeps 3 years of Walmart-network intelligence out of competitors' hands

Integration Plan — Protect, Baseline, Scale

Integration Timeline — Day 1 to Month 36

Risks & Mitigations

Risk	Mitigation
Unit economics unproven at scale (~$30/delivery caused the 2024 breakup)	Part 135 + M:N removes the structural constraint; earn-out tied to sub-$10 / sub-$7 cost milestones; Walmart-funded cost program on the DFW testbed
Talent flight — certificate and key people are one asset	Retention packages with 2–3 year vesting for CEO, CTO, and top ~25 critical staff, executed at close
Integration complexity with Wing/Zipline and retail stack	ATOMx is vendor-neutral by design; partnerships maintained; integration phased over 12–24 months; subsidiary model preserves culture
Part 108 timing delays scaling benefits	Existing Part 135 certificate is an operational bridge independent of Part 108; CTO sits on the FAA BVLOS rulemaking committee
Competitive response (Amazon acceleration; rivals via Wing/Zipline)	Prime Air at ~$63/delivery with operational setbacks; Walmart's 4,700-store proximity advantage is structural and unreplicable

Recommendation & Next Steps

Recommendation

Approve exclusive negotiations and confirmatory due diligence for 100% of DroneUp, LLC
Illustrative envelope $150–300M; 60–70% cash, 30–40% milestone earn-out
Tier 1 — Acquire Immediately: the only independently acquirable full-stack operator with proprietary UTM, at a depressed valuation, inside a closing window

Next steps

Board resolution authorizing exclusivity and diligence (today)
Confirmatory due diligence — financial, regulatory, technology, and key-personnel — (days 1–30)
Signed LOI within 45 days
Stand up the Integration Management Office pre-close; retention packages ready to execute at close
Report back to the Board with final terms and diligence findings before definitive agreement

All financial figures illustrative pending diligence and negotiation.