Gatik is something of an outlier in the autonomous vehicle space. While most companies are trying to scale robotaxis or bring self-driving long-haul transportation with Class 8 trucks to market, Gatik is focusing more on smaller box trucks and medium-haul logistics.
Gatik CEO and co-founder Gautam Narang said there are two main reasons for this go-to-market strategy. First, an autonomous middle-mile logistics solution solves specific customer problems. Second, it is a solution that can be deployed at scale, with no driver behind the wheel Today – not in five years.
Gatik is the third company that Narang and his brother Arjun have founded together. Their first company was in Delhi, India, a medical robotics startup focused on rehabilitating stroke patients using robotic arms. The problem was that labor in India is cheap and rehab centers and hospitals didn’t see the need for an expensive and unsociable robotic arm if they could hire nurses.
Narang said he and his brother took that lesson to heart and decided not to create technology for technology’s sake, but to focus on validating the customer’s real pain point.
The customers, in Gatik’s case, were grocers and retailers who struggled to meet end-consumer expectations for same-day delivery. Those expectations have already caused a shift in the logistics chain, which Gatik has come to grips with.
Gatik defines “middle mile” as distances or routes up to 300 miles. The company today has about 40 trucks that move goods in a hub-to-spoke model (rather than a hub-to-hub model) from a distribution center to micro-distribution centers and from those centers to multiple retail locations.
Today, Gatik conducts driverless operations with Walmart and Georgia-Pacific in the US and Loblaw in Canada on a daily basis.
We spoke with Narang to learn more about why Gatik doesn’t do free pilots or accept short-term partnerships, the importance of knowing your customer, and what investors are looking for in today’s funding environment.
You and your co-founders have a strong background in robotics. Why did you want to pursue the box truck approach to self-driving technology?
By aligning the customer’s needs with what was possible from a technological point of view, we started the company. When my co-founders and I decided to start Gatik, the criteria we had in mind was first and foremost to start with a real customer pain point. In 2015, 2016, many companies in our space approached this problem primarily from a technology angle, building technology for technology’s sake. The idea was, we’ll figure out the technology and worry about the use case and business model later. We wanted to do things differently.
Second, we wanted to focus on an application that was more near-term, so that’s how we pursued this mid-mile or B2B short-haul segment of the supply chain.
The insight we had was that the world of supply chain logistics is moving closer to the end consumer. The online grocery segment was growing like crazy, but meeting that two or three hour delivery window became more and more challenging for the grocers and retailers. In an effort to meet that delivery window, they moved their supply chain to the end consumer by building micro distribution centers.
All this means that the routes became shorter but more frequent, and the dimensions of the trucks also became smaller. So that’s how we came to the class 3 to 6 category of vehicles that go after this mid-mile. And the best thing about this mid-mile was that we had to run the trucks back and forth on fixed and repeatable routes. The whole idea was, let’s not try to solve autonomy over a large geofenced area. Rather, let’s focus our efforts on these fixed and repeatable routes, over-optimize the technology for these routes, and get to the driver’s departure point faster and safer than the competition.
How fixed are these routes? Do your vehicles just drive from point to point?
We are still working with level 4 autonomy, but yes, the operational domain is narrower compared to a company that deals with robotaxi or last-mile delivery. Instead of going behind, say, a large geofenced area like the city of San Francisco, we’re running our trucks back and forth on these repeatable routes.
Today we are the only autonomous transport company to make daily commercial deliveries on public roads without anyone on board. When we started, we did shorter routes, like less than 10 miles point to point, so moving goods from one warehouse or distribution center to one retail location. In recent years, the technology has matured to a point where we can pick up from multiple nodes and deliver to up to 50 retail locations, as well as any combination in between.
To give you an example of a partnership where we do exactly this is with Georgia-Pacific. So in Dallas, Gatik is moving Georgia-Pacific paper products from one of their distribution centers (DCs) to a network of 34 Sam’s Club locations. So every day the exact route changes and we touch about five to seven stores. As long as the network is manageable and the routes are known and repeatable, we can handle those kinds of networks.
That’s how we think about our company. We focus on specific routes where the technology is solvable today, we get to the point of validation where we can disable the driver, and then we do that again in other markets.