VANCOUVER — The Silicon Valley-based autonomous-vehicle startup that powers Loblaw’s fleet of driverless delivery trucks has closed an oversubscribed US$85-million Series B fundraising round. Gatik plans to use some of the money to further expand the team at its Toronto engineering hub, which has already more than doubled in less than a year.

New investor Koch Disruptive Technologies, which has invested more than US$1.7 billion in industries including health care, cybersecurity, fintech and energy transformation, led the round. Several returning investors, including Innovation Endeavours, FM Capital and Loblaw-affiliated Wittington Ventures, also participated. The round brings Gatik’s total funds raised to US$114.5 million.

“The funds [will] be used primarily for scaling the technology, scaling the team and then scaling operations, as well,” Gatik’s CEO and co-founder Gautam Narang said in an interview with The Logic. He is working toward a future where his company’s trucks automate the middle-mile delivery process for retailers including Loblaw.

Loblaw is the company’s only publicly disclosed Canadian client. The partnership started as a pilot project, then in January of this year Loblaw began permanently using five of Gatik’s trucks—Ford Transit 350s equipped with its self-driving software. Manned with a co-pilot, the trucks travel along five routes in the Greater Toronto Area, moving items from Loblaw’s micro-distribution centres to some of its retail locations. 

The number of trucks and routes Loblaw uses hasn’t changed since January, but “the plan is to scale the fleet in the future,” Narang said of the multi-year partnership. He sees a future where Gatik’s trucks automate Loblaw’s entire middle-mile delivery network. 

Gatik operates more than 20 trucks across three U.S. markets, working with Walmart in Arkansas and Louisiana. It announced Tuesday it has started operating in Texas, where it has opened an autonomous-trucking facility in Fort Worth. The company is “scaling our operations across all the sites,” Narang said.

Gatik currently has more than 70 employees, including 35 in Toronto, and plans to grow to close to 150 total over the next six to nine months, Narang said. The Toronto team is made up mostly of software engineers with expertise in robotics and machine learning, as well as an operations team that supports Loblaw. Gatik plans to continue to add software engineers to the team, and recently started hiring for roles on a mechanical team to be based at the hub. “We are hiring across the board,” he said.

The Loblaw deal has helped Gatik learn how to teach its technology to navigate harsh winters and heavy rains. It has spent two winters helping its trucks drive Toronto’s snowy streets, and that exposure, data and experience was “very helpful,” said Narang. The company’s trucks can now operate without anyone behind the wheel in markets with favourable weather conditions, like Arkansas, he said. “Getting to a point where we can handle heavy downpour and heavy snow is further down the road map.”

“Toronto has been a fantastic testbed for them around training in a different context,” said Jim Orlando, managing partner at Wittington Ventures and a Gatik board member, in an interview with The Logic. Orlando’s venture capital firm, which co-led Gatik’s US$25-million Series A, was able to observe how it’s meeting the challenges of Toronto’s weather, which gave it the confidence to invest again. Orlando declined to disclose the size of the investment, but Narang said “all the investors, they have doubled down … based on, obviously, the traction that we are seeing at the company.” Narang declined to share Gatik’s valuation, though he said it grew six times from the Series A, and said the company’s revenue this year is projected to grow more than 400 per cent year over year.

Gatik plans to expand to “multiple sites” in Canada, but Narang said it’s too soon to provide a timeframe, adding it’s likely years away. As the company gains the ability to work in all kinds of weather, Orlando said, there’s a real opportunity for Gatik in every major city in the country, anticipating expansion beyond Toronto within three to five years.

Gatik’s partnership with Loblaw doesn’t preclude it from working with other Canadian grocers or retailers, Narang said. “We can work with multiple customers, multiple retailers in the same market or different markets,” said Narang. “We strongly believe that our solution is relevant and useful for different kinds of suppliers.”