Crowdfunding drive for underground ecommerce delivery service tops £1m

A British engineering start-up looking to embed an innovative freight delivery system using underground pipes has succeeded in crowdfunding more than a million pounds for the project, it announced yesterday.

Magway would initially create a series of short delivery routes for airports it says in its investment pitch, as it works to alleviate freight traffic and local air pollution.

It would then seek to build a wider network of pipes encompassing hundreds of kilometres across the UK, with a view to starting construction in 2023.

By replacing delivery vehicles, Magway’s innovative system could help reduce the UK’s CO2 emissions by six million tonnes per year, the equivalent of a third of the emissions currently produced by UK delivery vehicles, according to managing director Anna Daroy.

“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,” Daroy says.

“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.”

Magway is crowdfunding its plans via Crowdcube. Starting with an initial aim of raising £750,000, it has now generated more than £1.2m from over 1,800 individual investors.

Crowdcube data shows that almost 45 per cent of Magway’s Crowdcube investors are aged between 18 and 30, reflecting wider evidence that the younger generation is particularly motivated by environmental concerns. Recent Kantar research revealed that 87 per cent of 18-24 year olds would consider switching or boycotting brands based on their environmental policies, the highest proportion of any age group.

Air pollution is estimated to cause 40,000 premature deaths every year in the UK. The Centre for Cities’ Cities Outlook 2020 study found that more than 1 in 19 deaths in UK cities and large towns are related to long-term exposure to air pollution, with people in the south more at risk. The head of the World Health Organisation has described air pollution as ‘the new tobacco’ and estimated that 90 per cent of the world’s population breathes danerously polluted air.

Road transport currently produces around a fifth of the country’s total greenhouse gas emissions. As internet purchases as a proportion of total retail sales have soared through the past decade, delivery vehicles have placed upward pressure on this total.

Delivery companies such as Royal Mail, Hermes and DPD are seeking to tackle the issue by introducing cleaner vehicles such as cargo bikes and electric vans, while Amazon has committed to making all its shipments net zero carbon, with 50 per cent net zero by 2050.

However, Magway hopes that an underground alternative in urban centres can tackle carbon emissions, air pollution, and traffic congestion all at once.