Gatik AI Inc., a self-driving truck start-up, today said it has closed a $25 million funding round to streamline the so-called “middle mile” of supply chains for enterprises. Wittington Ventures and Innovation Endeavors, the venture capital company co-founded by former Google Chief Executive Officer Eric Schmidt, co-led the Series A round. A host of current investors have chipped in. In total, to date, Gatik has now raised $29.5 million.

Gatik, three years old, uses box trucks (pictured) fitted with autonomous driving software to transport mid-mile deliveries or deliveries to retail stores from warehouses and distribution centres. Transporting goods across the supply chain’s middle-mile segment is also one of the highest logistics-related expenses for companies. Using autonomous vehicles, Gatik claims, can help to reduce costs dramatically.

Certain advantages are also to be identified. Gatik’s self-driving trucks run 12 hours a day seven days a week, allowing them to drive more freight than conventional delivery fleets in a given month. According to the start-up, the effect is that when customers order them, businesses gain the opportunity to ship goods from warehouses quicker and therefore minimise package wait times.

A more realistic explanation why Gatik sees an opportunity to apply autonomous driving to middle-mile distribution is that there are relatively few technological challenges involved in the mission. A truck carrying goods from a warehouse to a store frequently takes the same route between the two locations, providing a degree of predictability that enables the autonomous driving software of the truck to be trained. In addition, distribution paths for the middle mile are often very short, a factor that further decreases the number of possible technical difficulties.

The decision to concentrate on this part of logistics networks helped the start-up create a niche in the crowded autonomous driving market for itself. Gatik says that for various Fortune 500 customers in the U.S. and Canada, its self-driving trucks have already carried out 30,000 revenue-generating autonomous orders. Its newest customer is Loblaw Companies Ltd., the largest retailer in Canada, which plans next year to deploy five trucks powered by the software of the startup in Toronto.

“We have seen a 30 percent to 35 percent increase in orders from our customer base throughout the year and we expect this trend to continue,” Gatik co-founder and CEO Gautam Narang said.


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