Self-driving truck startup Gatik AI Inc. today said that it has closed a $25 million funding round to streamline the so-called “middle mile” of enterprise supply chains.

The Series A round was co-led by Wittington Ventures and Innovation Endeavors, the venture capital firm co-founded by former Google Chief Executive Officer Eric Schmidt. A number of existing investors chipped in as well. In total, Gatik has now raised $29.5 million to date.

Three-year-old Gatik is using box trucks (pictured) equipped with autonomous driving software to carry out middle-mile deliveries, or deliveries from warehouses and distribution centers to retail stores. Transporting merchandise over the middle-mile segment of the supply chain is often one of the biggest logistics-related expenses for enterprises. Using autonomous vehicles, Gatik argues, can help significantly reduce costs.

There are also other benefits to be had. Gatik’s self-driving trucks operate 12 hours a day, seven days a week, which allows them to make more cargo runs in a given month than traditional delivery fleets. According to the startup, the result is that companies gain the ability to ship items from warehouses faster when consumers order them and thereby reduce package wait times.

A more practical reason Gatik sees an opportunity to apply autonomous driving to middle-mile delivery is that the technical challenges involved in the task are relatively limited. A truck transporting goods from a warehouse to a store often takes the same route between the two locations, which creates a degree of predictability that makes it easier to train the truck’s autonomous driving software. Moreover, middle-mile delivery routes are often quite short, a factor that further reduces the number of potential technical challenges.

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

“Throughout the year we saw an increase of 30% to 35% in orders from our customer base, and we expect this trend to continue,” said Gatik co-founder and CEO Gautam Narang.

Photo: Gatik