Autonomous trucking firm Gatik inks contracts worth $600 million

Autonomous trucking startup Gatik AI Inc. signed a deal with a major consumer-goods company that will double its contracted revenue to $600 million over five years, helping the self-driving technology developer build out its business shipping goods in the US and Canada.

“This isn’t a demo, isn’t a pilot, it is a sustained commercial deployment at scale,” Gatik co-founder and Chief Executive Officer Gautam Narang said in an interview, without identifying the new partner company. “By the end of this year, we expect to have hundreds of trucks that would be revenue generating that would be driver-out as well.”

The latest deal serves as a milestone in the autonomous trucking business, which has so far mostly driven with test drivers in the vehicles or without human assistance in limited routes to prove the technology is safe on public roads. While autonomous trucking has been improving, few companies are bringing in meaningful revenue after more than a decade of developing AI behind the wheel.

As Gatik builds revenue — and assuming it can avoid issues with its driverless technology — the company can start to look more realistically at an initial public offering when it needs capital and the time is right, Narang said. The company has enough cash for the next few years, he said.

“We are well capitalized and well funded for the foreseeable future,” Narang said.

The company added $400 million in take-or-pay contracts in the second half of last year, including its latest deal with one shipper.

Today, Gatik has 10 trucks that are running on public roads without a safety driver, and they generate revenue. Soon, Narang said, the company will increase its driving fleet to 60 and expand further by year-end.

Gatik is transporting freight in Ontario for Loblaw Cos. Ltd. with a safety driver. The company is also running trucks in the US for Walmart Inc., Kroger Co. and Tyson Foods Inc. in the Dallas–Fort Worth region, Phoenix and Northwest Arkansas. Its trucks run nearly 24 hours a day, moving ambient, refrigerated, and frozen goods between distribution centers and stores.

Other AV companies like Aurora Innovation Inc. and Kodiak AI Inc. are also running freight routes for customers, but both have reported small levels of revenue.

— By David Welch (Bloomberg)