Gatik AI: Delivery Without the Driver
February 4, 2021 | Ashley Brindamour
COVID-19 has accelerated the shift from physical to digital shopping nearly five years faster than projected by IBM’s U.S. Retail Index. In order to meet customer needs, businesses are establishing micro-fulfillment centers closer to stores to improve the speed and efficiency of delivery. While that is beneficial, retailers don’t have enough drivers to cover the number of runs between distribution centers and storefronts.
Founded in 2017, Gatik AI, an Alumni Ventures Group portfolio company, is helping retailers adapt to this new distribution model through the use of autonomous vehicles (AV). The company’s 11-foot refrigerated box trucks avoid challenges that impact other self-driving cars by choosing shorter and more efficient routes.
Walmart Enters the Future
Gatik AI’s technology has caught the attention of massive retail chain Walmart. Gatik’s test vehicle has already logged 70,000 autonomous miles at Walmart’s location in Bentonville, Arkansas while being monitored by a safety driver. Gatik is prepared to navigate the same route without a driver early this year.
Gatik’s technology has proven to improve operational efficiency. The company’s work with Walmart has illustrated the potential to reduce the operating costs of distribution by 60% while increasing capacity by 10x.
What We Liked About the Deal
Early Wins and Capital Efficiency: Three years after founding, Gatik has built software, secured commercial contracts, and launched live pilots with Walmart and Loblaws with only $4.5 million of capital raised.
Limited Competition: Gatik offers a unique B2B solution that is focused on operating an AV repeatedly back and forth between two fixed locations. Unlike other AVs, Gatik’s truck design and features are created specifically for these short-haul logistics, leaving them with few competitors.
Strong Market Position: Grocery delivery is projected to expand to 21.5% of total U.S. grocery sales by 2025. Gatik is well-positioned to take advantage of this new trend and is motivated to expand and improve their offering in a cost-efficient manner.
How We Are Involved
Gatik recently raised a $25 million Series A led by new investor Wittington Ventures and returning investor Innovation Endeavors. Green D Ventures (for the Dartmouth community) sponsored AVG’s investment, alongside sibling funds Castor Ventures (for the MIT community) and Strawberry Creek Ventures (for the UC Berkeley community).