Gatik raises $22.5 million for autonomous short-haul delivery trucks

Gatik, a startup developing an autonomous vehicle stack for B2B short-haul logistics, closed a $22.5 million series A round. The company also announced it will bring a fleet of self-driving vans to Canada as part of a deal with Loblaw, the country’s largest retailer with over 200,000 employees.

Some experts predict the pandemic will hasten adoption of autonomous vehicles for delivery. Self-driving cars, vans, and trucks promise to minimize the risk of spreading disease by limiting driver contact. This is particularly true with regard to short-haul freight, which is experiencing a spike in volume during the outbreak. The producer price index for local truckload carriage jumped 20.4% from July to August, according to the U.S. Bureau of Labor Statistics, most likely propelled by demand for short-haul distribution from warehouses and distribution centers to ecommerce fulfillment centers and stores.

Palo Alto, California-based Gatik, which has offices in Toronto, is the brainchild of Carnegie Mellon graduate and CEO Gautam Narang. He cofounded the company in 2017 with CTO Arjun Narang and chief engineer and former Ford computer vision lead Apeksha Kumavat.

Gatik’s platform taps level 4 autonomous vehicles (capable of operating with limited human input and oversight in specific conditions and locations, as defined by the Society of Automotive Engineers) to fulfill on-demand and scheduled deliveries up to a distance of 200 miles. Its retrofitted trucks and Ford Transit 350 vans and orchestration software, which the company has been testing on public roads in California since Q1 2018, promise to transport goods around city environments more affordably.

For Loblaw, Gatik says it will transport “multi-temperature” goods and products from the retailer’s microfulfillment centers for inventory pooling across multiple locations, multiple times a day, to retail outposts across the Greater Toronto Area beginning January 2021. The program will cover five routes that will operate 12 hours a day, seven days a week.

Gatik’s fleet of Class 1-6 autonomous vehicles moves goods from microfulfilment centers and dark stores to pick-up points like retail stores, distribution centers, and offices — known as the middle mile,” Gatik head of policy and communications Richard Steiner told VentureBeat in a recent interview. “This is critical because the middle mile is the most expensive and challenging part of the supply chain for retailers to contend with. … The key to Gatik’s success involves optimizing fixed, predetermined routes, such as those used along the supply chain’s middle mile, countless times each day. The biggest threat to the autonomous revolution is the unknown, or edge cases, which are substantially reduced on fixed journeys.”

In July, Walmart revealed that it had launched a pilot with Gatik to ferry customer orders between select store locations in Bentonville, Arkansas. Gatik’s vans transport items from a warehouse to neighborhood market stores along a two-mile route (or five-mile one-way route) in Bentonville. Each van makes up to 10 runs a day during daylight, with human backup operators behind the wheel.

More recently, Gatik received a $100,000 grant from PlanetM, a Michigan Economic Development Corporation program that seeks to fund solutions to pandemic-driven challenges in Michigan. In collaboration with an unnamed partner, referred to as “one of the state’s largest retailers,” Gatik says its autonomous trucks will operate on predetermined, fixed routes throughout Grand Rapids and Rochester.

Gatik says it will continue to target customers such as third-party logistics providers (like FedEx, UPS, and USPS), consumer goods distributors, food and beverage distributors, medical and pharmaceutical distributors, and auto parts distributors for the foreseeable future. The company has raised a total of $27 million in venture capital. Round was led by Wittington Ventures and Innovation Endeavors, with participation from FM Capital, Intact Ventures, Fontinalis Partners, Dynamo, Reilly Brennan’s Trucks VC, Intact Ventures, and AngelPad.