Microsoft-backed self-driving delivery truck startup Gatik inks deal with Kroger

Autonomous truck company Gatik has signed a multiyear deal with grocery giant Kroger.

Kroger will use Gatik's autonomous box trucks to transfer groceries between a distribution center in Dallas to multiple stores in the Dallas-Fort Worth market starting in the second quarter.

Gatik's trucks will operate in a continuous service loop between the distribution center and local Kroger stores, with a minimum of four deliveries seven days a week. Each round trip will average 60 miles. The route is semi-urban and includes highway driving. Gatik's trucks will drive at speeds up to 70 mph. Although the trucks will be operating autonomously, a safety driver will be in the cab, ready to take over if needed.

Gatik did not reveal the financial terms of the company's agreement with Kroger.

Each of Gatik's trucks features a cold chain-capable 20-foot box to transport room-temperature, refrigerated and frozen goods.

Gatik operates more than 25 trucks in Texas, mainly in North Texas, where it makes middle-mile deliveries for Sam's Club.

Gatik has 45 trucks in total across its markets, which include Arkansas, where the company makes driverless deliveries for Walmart's headquarters in Bentonville. Canadian supermarket chain Loblaws is also a Gatik client.

Gatik has not publicly disclosed all of its customers.

Gatik uses Isuzu FTR trucks with a Cummins engine, adding its own self-driving technology.

Since launching in 2019, the Mountain View, Calif., company claims to have delivered half a million customer orders, leveraging its commercial-grade autonomous technology to transport freight in the middle mile.

In 2021, Gatik raised $85 million in a series B funding round led by Koch Disruptive Technologies, the venture capital arm of Koch Industries. The company's investors also include Innovation Endeavours, Wittington Ventures, FM Capital, Dynamo Ventures, Trucks VC, AngelPad and Intact Ventures. Gatik has raised $114.5 million.

Gatik is one of the few autonomous middle-mile delivery truck companies in operation in North America and has shown it can attract giant retailers with its offerings. In January 2023, Microsoft invested $10 million in Gatik at more than $700 million valuation. Gatik will use Microsoft's cloud and edge computing platform Azure to develop autonomous delivery technology for its trucks.

Gatik CEO and co-founder Gautam Narang told Automotive News the company's success at commercializing middle-mile delivery at scale has differentiated it from autonomous vehicle companies focusing on long-haul delivery, which has proved more difficult to bring to market.

"With Kroger, we'll be replacing existing Class 8 trucks within their regional distribution network with our Class 6 autonomous box trucks," Narang said. "This is further validation for our medium-duty, middle-mile use case and the near-term benefits we offer to our customers."