The self-driving trucks will service Loblaw’s “middle-mile” as AV tech company, Gatik, adds another major retailer to its roster and announces $25 million in new funding

In a Canadian first, Loblaw Companies Ltd. says it will begin deploying autonomous grocery delivery vehicles on public streets in Toronto in January.

The rollout lifts the curtain on a multi-year partnership between Loblaw and Gatik, a three-year-old technology company with headquarters in Palo Alto, Calif., and a sizeable office in Toronto.

The autonomous fleet, to be operated by Gatik, consists of five specially equipped Ford Transit 350 box trucks with refrigeration units that will carry goods from Loblaw’s automated picking facility to retail locations across the Greater Toronto Area.

In 2019, Gatik — which specializes in B2B short-haul “middle-mile” logistics — launched a similar service with Walmart in the U.S.

Online grocery demand

“As Canadians turn to online grocery shopping, we’ve looked at ways to make our supply chain more efficient,” says Lauren Steinberg, senior vice-president, Loblaw Digital, in a release announcing the service.

“With this initial rollout in Toronto, we are able to move goods from our automated picking facility multiple times a day to keep pace with PC Express online grocery orders in stores around the city.”

This announcement follows a successful 10-month, on-road pilot with a single truck. When the service starts, vehicles will travel five routes, on public roads, with fixed pick-up and drop-off locations — an approach Gatik describes as “structured autonomy.” All vehicles will have a safety driver as a co-pilot.

In an exclusive interview with Electric Autonomy Canada conducted shortly before today’s announcement, Gatik CEO Gautam Narang explained the company’s middle-mile strategy.

“The middle mile is drastically underserved and it’s the most challenging and expensive part of the supply chain,” he says. “Since [it] involves moving goods from micro fulfilment centres and dark stores to pick-up points like retail stores, it’s a crucial step in meeting e-commerce demands.”

Canadian angle key

In today’s release, Narang says Gatik is “delighted” that its first Canadian partner is Loblaw. “We are proud to be selected to play a key role in enhancing the safety and efficiency of its already robust supply chain.”

The Canadian angle is a big part of the Gatik story. While the company’s head office is in Palo Alto, all three of Gatik’s co-founders — CEO Gautam Narang, his brother Arjun, CTO, and Apeksha Kumavat, chief engineer — emigrated from India and are now permanent residents of Canada.

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Gatik opened its Toronto office in January 2019.

“One of the major reasons why we expanded into Canada is because of talent,” Narang told Electric Autonomy. “Highly skilled engineers are hard to come by, and Ontario’s post-secondary institutions and technology sector are home to some of the finest talent in robotics, mechatronics and AI. We’re keen to continue establishing a long-term presence in the country.”

Besides its publicized partnership with Walmart, Gatik says it has additional signed contracts with a number of other Fortune 500 retail customers in the U.S.

New VC funding

That growing customer base helps explain today’s other big splash — an announcement that Gatik has closed a US$25-million Series A funding round, co-led by Wittington Ventures and Innovation Endeavors.

Wittington Ventures is a Canadian-based fund, led by Jim Orlando, a fixture in Canadian tech circles. Innovation Endeavors, meanwhile, is the VC firm established by former Google CEO and executive chairman Eric Schmidt. It also led Gatik’s first US$4.5-million seed financing round in early 2019.

According to a separate release announcing the funding, Gatik says the full list of investors “bring a wealth of deep experience in automotive, artificial intelligence and supply chain, making them a strong strategic fit for the company’s rapid development.”

“We will leverage this new funding to continue expanding our retail partnerships and fleet deployments, enhance our technology platform and grow our team,” says Narang.

The release stresses that Gatik intends to expand across North America, building its teams both in Silicon Valley and in Canada.

R&D in Ontario

The only specific Canadian news involving Gatik prior to today’s announcement came in July, when it was named as one of 10 companies in the second cohort of AVIN Waterloo Ventures at Communitech startups.

Each company in that program receives up to $50,000 to offset product development costs related to either AV technology or high-definition mapping.

While the funding was modest, Narang says Gatik welcomes the opportunity to increase the efficiency of its mapping pipeline.

“HD maps … are an integral component used across our entire autonomous software stack,” he explains. “As part of the AVIN Waterloo Ventures project, we are exploring the compatibility of the features provided in the HD maps on the OpenHDMaps platform with our software stack. Despite the critical role of HD maps in the advancement of self-driving technology, there are surprisingly very few communities or companies that offer readily available good quality HD maps.”

Safety in the pandemic

While Gatik began working with Loblaw before COVID-19 had a foothold in North America, the boom in online shopping since March and the added safety of contactless delivery has only added to the project’s appeal.

“In May, when we announced our new platform, the autonomous box truck [complementing the smaller trucks and vans it started with], it wasn’t designed with the pandemic in mind, but it turned out to be the ideal form factor to scale our customers’ operations quickly and efficiently,” says Narang.

In the U.S., Gatik says it has seen a 30-to-35 per cent increase in orders since the pandemic’s onset.

“We … feel privileged to be doing our part to help our customers and the consumers get access to essential goods safely, reliably and quickly,” he says. “We’re actively helping to reduce human-to-human transmission channels of COVID-19 via contactless delivery, and dramatically limiting the hours people need to spend outside, in stores or in contact with others.”

Along with today’s announcements, it’s one more reason that Gatik, while it targets the middle mile, is emerging as a leader of the pack.