GatikSummary List Placement
Canadian grocery giant Loblaw is partnering with startup Gatik to deploy the country's first autonomous delivery fleet, according to an announcement Monday.
Silicon Valley-based Gatik also has an ongoing partnership with Walmart and has raised roughly $30 million to-date, including a $25 million Series A round led by Wittington Ventures and Innovation Endeavors, also announced on Monday. Gatik declined to release its valuation, but PitchBook last pegged it at $58 million.
Loblaw operates over 2,000 stores in Canada and pulled in nearly $12 billion in revenue last year. Initially, the company will deploy five Gatik vans, which will each drive roughly 186 miles per week to deliver goods from a distribution center to physical retail stores. The vans operate autonomously as much as possible, though humans are still onboard.
The partnership pushes Gatik's total number of vehicles on the road for customers to 15. Overall, the startup's fleet has completed more than 30,000 revenue-generating autonomous orders since its founding in 2016.
While Gatik CEO Gautam Narang declined to comment on the size of the Loblaw deal, he said the bulk of its agreements are "multi-year partnerships" worth "multi-million dollars" each.
For Loblaw, the partnership could improve logistics operations, making it easier, for example, to get goods to stores, enabling faster pickup for the end-customer. The need for speed became apparent this year when consumers flooded retailers at the start of the pandemic. In fact, Gatik says the outbreak led to as much as a 90% increase in e-commerce orders among its customers.
Because of COVID-19, clients "wanted us to deploy these vehicles ahead of schedule. They wanted us to deploy more vehicles," said Narang.
The venture also helps Garik test its vans in a vastly different climate compared to the weather around Walmart's headquarters in Arkansas. Like other autonomous vehicle companies, the underlying technology supporting Gatik's fleet is shared, meaning that something a van learns on the road in Canada is shared with those in other parts of North America.
"The kind of conditions that we have in Canada are really attractive for us just from a winterization standpoint," Narang said.
The goal for Gatik is to perfect its tech to handle fixed, repeatable routes so that eventually humans won't need to ride along. While that strategy ultimately won't work for pedestrian vehicles, where there is too much variability, it could for Gatik because enterprises are often shipping items from brick-and-mortar distribution centers on the same paths each time. For Loblaw, the vans will use its automated picking facility in Toronto as a hub before exiting across five different spokes.
"This is our way of constraining the autonomy problem," Narang said. "By over-optimizing our technology on these routes, we can basically get to the market faster."
Gatik is targeting middle-mile delivery, so between where the goods arrive at the distribution center to the location where it will be delivered to the consumer — what Narang says is a segment that "was hugely underserved and it's very expensive for the retailers."
"These retailers are deploying multiple trucks with multiple drivers ... that's very costly," he added. "We are making their supply chain more efficient."
NOW WATCH: Epidemiologists debunk 13 coronavirus myths
- How Intuit slashed costs and saved time by moving its TurboTax software to Kubernetes, a popular open source project started at Google
- How the Estée Lauder Companies decided to use blockchain to track a key ingredient in 125 of Aveda's beauty products, according to the exec in charge at the $93 billion beauty titan
- Airbnb just revealed plans to spend over $1 billion on cloud services. Here's how much it and other companies like Slack, Zoom, Netflix, Snap, and Pinterest are spending with cloud providers like AWS, Google, and Oracle.