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Gatik’s self-driving box trucks to shuttle groceries for Loblaw in Canada
Gatik, the autonomous vehicle startup focused on the “middle mile,” is already using its self-driving box trucks to deliver customer online grocery orders for Walmart. Now, the company — freshly stocked with $25 million in Series A funding — is expanding up into Canada with a partnership with retail giant Loblaw.
Gatik said Monday that five autonomous box trucks in Toronto will be used to deliver goods for Loblaw starting in January 2021. The fleet will be used seven days a week on five routes along public roads. All vehicles will have a safety driver as a co-pilot. This deployment, which follows a 10-month pilot in the Toronto area, marks the first autonomous delivery fleet in Canada.
“As more Canadians turn to online grocery shopping, we’ve looked at ways to make our supply chain more efficient. Middle-mile autonomous delivery is a great example,” Loblaw Digital senior vice president Lauren Steinberg said in a statement. “With this initial rollout in Toronto, we are able to move goods from our automated picking facility multiple times a day to keep pace with PC Express online grocery orders in stores around the city.”
Unlike other autonomous delivery companies, Gatik isn’t targeting consumers. Instead, the startup is using its autonomous trucks to shuttle groceries and other goods from large distribution centers to retail locations. For Loblaw, the company will equip Ford Transit 350 box trucks with refrigeration units, lift gates and its autonomous self-driving software.
“Retailers know the biggest inefficiencies in their logistics operations often exist in the middle-mile, typically between automated picking facilities and retail locations,” Gatik CEO and co-founder Gautam Narang said in a statement. “This is where Gatik lives and succeeds, and is the reason we’re able to offer immediate value to our customers. We are delighted to partner with Loblaw in addressing this critical piece of their supply chain.”
Gatik’s “middle mile” B2B focus has attracted customers like Walmart, as well as investors, including Wittington Ventures and Innovation Endeavors, which co-led the company’s Series A round. FM Capital and Intact Ventures, along with existing investors Dynamo Ventures, Fontinalis Partners and AngelPad also participated in the round that was announced alongside the Loblaw partnership. Gatik has raised $29.5 million to date.
The company said it plans to use the funding to build out operations across North America and hire more employees at its Palo Alto, California and Toronto facilities. Narang said Gatik is also pushing to expand its retail partnerships and fleet deployments.
“Throughout the year we saw an increase of 30% to 35% in orders from our customer base, and we expect this trend to continue,” Narang said. “We will continue to bring autonomous delivery into the mainstream, driving substantial efficiencies in supply chain logistics for retailers across North America and beyond.”
Gatik said it has completed more than 30,000 revenue-generating autonomous orders for multiple customers across North America.
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Lidar startup Ouster raises $42M in push to grow sales, diversify products
Lidar startup Ouster has spent the past several years expanding and improving its line of sensors as it jostles for a piece of the crowded and competitive market place. Now, Ouster says it has raised $42 million, fresh capital that will be used to fund product development and ramp up sales.
In short: Ouster is keeping the fight alive and there are signs that the San Francisco-based startup is making progress despite some headwinds. The $42 million Series B round didn’t feature any new investors — existing backers Cox Automotive, Fontinalis Partners and Tao Capital Partners all participated — and it was less than its previous raise of $60 million. Ouster, like many others, also reduced its workforce by 10% due to COVID-19, the company confirmed.
However, it’s worth noting that Ouster managed to close the round in the midst of COVID-19 and has continued to increase sales, even as its San Francisco-based manufacturing facility was shuttered temporarily due to a COVID-related government shutdown. The business grew enough to avoid further layoffs and to fully pay all employees and temp workers, according to the company. Ouster has raised $140 million to date.
Ouster wouldn’t share specific revenue numbers, but the company said its 12-month revenue has grown 62%, with third-quarter bookings up 209% year-over-year — a stat that makes sense, considering its business model and the expansion of its product line.
Lidar measures distance using laser light to generate highly accurate 3D maps of the world around the car. Lidar is considered by most in the automated vehicle technology industry a key sensor required to safely deploy robotaxis and other autonomous vehicles (with perhaps the exception of Elon Musk and a few others).
Ouster is taking a different technological and business approach than many of its competitors.
The company’s lasers and photodetectors are printed onto two chips using a standard process to produce integrated circuits (known as CMOS to those in the know). Ouster says this allows it to ditch the more common practice of stacking discrete components on top of each other to reach the desired resolution. Ouster argues that its approach results in a less complex sensor that is more reliable and cheaper.
“Ouster’s digital lidar architecture gives us fundamental advantages that are winning over customers in every market we serve. Digital CMOS technology is the future of lidar and Ouster was the first to invent, build, patent, and commercialize digital lidar. Once our customers experience the resolution and reliability of these sensors at an affordable price, there’s no turning back to legacy analog lidar,” Ouster CEO Angus Pacala said in a statement.
In January, Ouster launched its second-generation lidar product line, which includes three different 128-beam sensors to be used for different purposes, including one designed for navigating urban environments and warehouses. The other two sensors include a mid-range model with a 120-meter range and a 45-degree field of view, and a long-range lidar sensor with a more than 200-meter range for high-speed vehicle automation. All three products are currently shipping to customers and are available in 50 different configurations, according to Ouster.
The company’s business model is also slightly different than many others. Instead of targeting automakers or companies trying to commercialize robotaxis, Ouster has cast a wider net to diversify its business. The company is selling its lidar sensors to robotics, drones, mapping, defense, building security, mining and agriculture companies. The company launched in January its second-generation lidar sensors, which included three new 128-beam models that have different applications. The second-generation line is an improvement from its previous 64-beam models, with better resolution.
The strategy has appeared to pay off. Ouster has doubled its customer base since March 2019, according to the company. Today, Ouster says it has 800 customers across 15 markets, including Konecranes, Postmates, Ike, May Mobility, Kodiak Robotics, Coast Autonomous, the U.S. Army, NASA, Stanford University and MIT. Some of that growth has come from sales to Chinese automation companies such as idriverplus, WhaleAI, Hongjing Drive and qCraft.
Despite the growth, Ouster needs the capital to scale, as designing, manufacturing and selling lidar sensors is an expensive undertaking. Ouster has opened offices in Paris, Hamburg, Frankfurt, Hong Kong and Suzhou to expand global sales and customer service capabilities. It also has two manufacturing facilities. Its San Francisco facility, which opened in March 2019, is primarily used to introduce new products. Production volumes are lower at this facility. Once the product is validated, they’re transferred to Ouster’s contract manufacturer Benchmark in Southeast Asia.
Benchmark is now producing hundreds to thousands of second-generation sensors per month, according to Ouster.
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5 VCs on the future of Michigan’s startup ecosystem
The Michigan startup scene is growing and venture capitalists see several key areas of opportunities. What follows is a survey of some of the top VCs in the state and how they see COVID-19 affecting the growth of Detroit, Ann Arbor and all of Michigan’s startup ecosystem. According to the Michigan Venture Capital Association (MVCA), there are 144 venture-backed startup companies in Michigan, which is an increase of 12% over the last five years.
The amount of capital available in the state hit a four-year high in 2019 after shrinking from record levels in 2015. The MVCA says the total amount of VC funds under management in Michigan is $4.3 billion. Out of that, 71% of the capital has been invested into companies and the MVCA states its members estimate an additional $1.2 billion of venture capital is needed to “adequately fund the growth of Michigan’s 144 startup companies in the next two years.”
As the VCs say below, life sciences is a large part of the Michigan ecosystem, attracting 38% of all investments made in the state. Information technology comes in second, receiving 34% of the total capital invested, with 85% going to those focused on software. Mobility, often thought as Michigan’s mainstay, only received 7% of the capital in 2019. Here’s who we spoke to:
- Chris Stallman, partner, Fontinalis Partners
- Patricia Glaza, EVP and managing director, ID Ventures
- Chris Rizik, CEO and fund manager, Renaissance Venture Capital
- Tim Streit, partner, Grand Ventures
- Turner Novak, general partner, Gelt VC
VCs remain bullish on Michigan’s life science startups
Michigan has long been a hub for life science startups and the venture capitalists polled expect that to continue. Chris Stallman of Fontinalis Partners points to Michigan’s long-standing reputation in this field and expects this to continue.
Tim Streit of Grand Ventures agrees and sees the pandemic as accelerating the sector’s growth. In recent weeks he says his firm has seen a “number of promising digital therapeutics deals based in or near Michigan … and the timing couldn’t be more perfect for these kinds of companies to succeed.”
Chris Rizik of Renaissance Venture Capital notes that drug development will continue to drive growth around the country and is a strength of the Michigan ecosystem. He also points to Jeff Williams, CEO of NeuMoDx, as a leader in the life science community and who has led a number of Michigan’s most successful startups.
The notable exception to this are startups directly serving hospitals, according to Patricia Glaza of ID Ventures. She sees this as a challenging market in the era of COVID-19, saying “Hospitals are bleeding cash without elective surgeries and hard to prioritize nonessential technologies.”
Ann Arbor is becoming a hub for security companies
Duo Security’s impressive exit to Cisco in 2018 is still resonating in the scene. As such, many venture capitalists are seeing Ann Arbor becoming a home for security startups.
Stallman of Fontinalis states, “I think the cybersecurity realm will be a bright spot as some of those spillover effects from the 2018 acquisition of Duo Security by Cisco take hold (this is still in its early days — employees will reach the end of their employment agreements and will start new companies, etc.).” Rizik of Renaissance Venture Capital said something similar: “The success of Duo Security highlighted Michigan’s growing reputation as a cybersecurity hub. The University of Michigan has always been strong in this area, and we now see a number of interesting startups in this field popping up around Ann Arbor.”
When asked about leaders in the Michigan startup scene, nearly all of the VCs listed Duo Security founders Dug Song and Jon Oberheide as key players. Perhaps Rizik said it best: “Dug Song is a great leader, who not only created a monster success for the region with Duo Security, but also has devoted much of his time to strategically working to help Michigan move forward as a responsible, startup-friendly community.”
Michigan is well-suited to benefit from remote work
Of course Michigan-based venture capitalists would be bullish on their own state, but nearly all of the VCs share the same reasons on why Michigan is a good place. They list low cost of living, amazing STEM-focused schools and a community of founders, VCs and business leaders eager to help each other.
Few VCs mention mobility as a bright spot for Michigan startups
Surprisingly, few of the VCs in the survey mention mobility or automotive as a highlight of the Michigan startup scene, which runs counter to the national narrative. Stallman sums up the situation this way: “The mobility space will see both headwinds and tailwinds. Companies vying for automotive customers may find that the industry’s challenges have resulted in a shorter ‘priority list’ for many automakers and suppliers; on the other side, companies helping to remove enterprise risk through innovation in supply chain, automation, workforce efficiency, etc. will have arguably more opportunity going forward.”
Chris Stallman, partner, Fontinalis Partners
How much is local investing a focus for you now? If you are investing remotely in general now, are you filtering for local founders?
We have always been a thematically focused investor rather than a geographically focused investor; prior to COVID-19, we had invested 99% of our capital outside of Michigan. With that said, we’d love to invest more in Michigan and support more local founders.
What do you expect to happen to the startup climate in Detroit/Ann Arbor/Michigan longer term, with the shift to more remote work, possibly from more remote areas. Will it stay a tech hub?
Southeast Michigan has always been a story of two different startup worlds: health/life sciences and hardware/software tech. On the life sciences side, this region has a long-standing reputation of innovation and university research, and I expect that to remain largely the same going forward. It would seem to me that life sciences companies may not have as easy of a time adapting to new remote-work environments since much of the innovation work remains lab/clinic/facility-based.
For the world of other technology, I think there will certainly be more embracing of remote work and distributed teams — this area has always had some degree of that since it’s not uncommon to see companies with another office elsewhere or a few remote employees that come from very specific backgrounds that are hard to recruit for locally. Since this area has always had some of that, I could see a case that this new paradigm will be an easier adjustment for this region. However, the flip side of that is that so much of tech innovation and developing an ecosystem is about density and serendipitous collisions — for an area that was still on the come-up, losing what ground had been gained in recent years will no doubt make the spillover benefits of this aspect harder to come by. I worry a bit that angel and seed activity will slow locally (and hopefully that the growth in seed funds nationally will offset that).
Are there particular industry sectors that you expect to do uniquely well or poorly, locally?
I think a larger theme that is arising out of this COVID-19 situation is that people have a heightened sense of health, safety and security. Life sciences will remain resilient so long as there’s funding for continued research, and I think the cybersecurity realm will be a bright spot as some of those spillover effects from the 2018 acquisition of Duo Security by Cisco take hold (this is still in its early days — employees will reach the end of their employment agreements and will start new companies, etc.).
The mobility space will see both headwinds and tailwinds. Companies vying for automotive customers may find that the industry’s challenges have resulted in a shorter “priority list” for many automakers and suppliers; on the other side, companies helping to remove enterprise risk through innovation in supply chain, automation, workforce efficiency, etc. will have arguably more opportunity going forward.
In the short term, what challenges are facing Michigan’s startup scene?
Detroit has not yet hit a full critical mass from a startup ecosystem standpoint, and that is most evident in the more limited amount of angel and seed capital available to companies here; and, to a lesser extent, a more shallow pool of mentors and advisors for founders than what you would find in SF, LA, NYC, Boston, etc.
Who are some founders (who you’ve invested in or otherwise) that are leaders in the community?
Here are some of the prominent ones (note that we have invested in any): Dug Song and Jon Oberheide (Duo Security), Mina Sooch (has founded and led several prominent biotech companies), Amanda Lewan (Bamboo Detroit), Kyle Hoff (Floyd), Josh Luber and Greg Schwartz (StockX).
A lot of Bay Area founders and developers are looking to relocate. Why Michigan?
Quality research institutions, access to talent locally and ability to pull from Toronto/Ohio/etc., significant industry (automotive, logistics, manufacturing and financial services) in its footprint, supportive state programs for startups, cost of living, international airport with easy access (when the world moves again, that is), etc.
Patricia Glaza, EVP and managing director, ID Ventures
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Helm.ai raises $13M on its unsupervised learning approach to driverless car AI
Four years ago, mathematician Vlad Voroninski saw an opportunity to remove some of the bottlenecks in the development of autonomous vehicle technology thanks to breakthroughs in deep learning.
Now, Helm.ai, the startup he co-founded in 2016 with Tudor Achim, is coming out of stealth with an announcement that it has raised $13 million in a seed round that includes investment from A.Capital Ventures, Amplo, Binnacle Partners, Sound Ventures, Fontinalis Partners and SV Angel. More than a dozen angel investors also participated, including Berggruen Holdings founder Nicolas Berggruen, Quora co-founders Charlie Cheever and Adam D’Angelo, professional NBA player Kevin Durant, Gen. David Petraeus, Matician co-founder and CEO Navneet Dalal, Quiet Capital managing partner Lee Linden and Robinhood co-founder Vladimir Tenev, among others.
Helm.ai will put the $13 million in seed funding toward advanced engineering and R&D and hiring more employees, as well as locking in and fulfilling deals with customers.
Helm.ai is focused solely on the software. It isn’t building the compute platform or sensors that are also required in a self-driving vehicle. Instead, it is agnostic to those variables. In the most basic terms, Helm.ai is creating software that tries to understand sensor data as well as a human would, in order to be able to drive, Voroninski said.
That aim doesn’t sound different from other companies. It’s Helm.ai’s approach to software that is noteworthy. Autonomous vehicle developers often rely on a combination of simulation and on-road testing, along with reams of data sets that have been annotated by humans, to train and improve the so-called “brain” of the self-driving vehicle.
Helm.ai says it has developed software that can skip those steps, which expedites the timeline and reduces costs. The startup uses an unsupervised learning approach to develop software that can train neural networks without the need for large-scale fleet data, simulation or annotation.
“There’s this very long tail end and an endless sea of corner cases to go through when developing AI software for autonomous vehicles, Voroninski explained. “What really matters is the unit of efficiency of how much does it cost to solve any given corner case, and how quickly can you do it? And so that’s the part that we really innovated on.”
Voroninski first became interested in autonomous driving at UCLA, where he learned about the technology from his undergrad adviser who had participated in the DARPA Grand Challenge, a driverless car competition in the U.S. funded by the Defense Advanced Research Projects Agency. And while Voroninski turned his attention to applied mathematics for the next decade — earning a PhD in math at UC Berkeley and then joining the faculty in the MIT mathematics department — he knew he’d eventually come back to autonomous vehicles.
By 2016, Voroninski said breakthroughs in deep learning created opportunities to jump in. Voroninski left MIT and Sift Security, a cybersecurity startup later acquired by Netskope, to start Helm.ai with Achim in November 2016.
“We identified some key challenges that we felt like weren’t being addressed with the traditional approaches,” Voroninski said. “We built some prototypes early on that made us believe that we can actually take this all the way.”
Helm.ai is still a small team of about 15 people. Its business aim is to license its software for two use cases — Level 2 (and a newer term called Level 2+) advanced driver assistance systems found in passenger vehicles and Level 4 autonomous vehicle fleets.
Helm.ai does have customers, some of which have gone beyond the pilot phase, Voroninski said, adding that he couldn’t name them.
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Lidar startup Ouster raises $60 million in production run-up
Ouster has raised $60 million as the San Francisco-based lidar startup opens a new facility that will have the capacity to assemble and ship several thousand sensors a month by the end of 2019.
The new factory, which will have a grand opening ceremony March 28, currently produces hundreds of sensors per month. Ouster says at full capacity, the factory will produce $25 million to $50 million in inventory per month.
Lidar measures distance using laser light to generate highly accurate 3D maps of the world around the car. It’s considered by most in the self-driving car industry a key piece of technology required to safely deploy robotaxis and other autonomous vehicles (although not everyone agrees). However, the sensors are also useful in other industries — and this is where Ouster’s business model is targeted.
Ouster has cast a wider net for customers than some of its rivals. Unlike others vying solely for automotive customers working on the development of autonomous vehicles, Ouster is selling sensors to other industries. Ouster is selling its light detection and ranging radar sensors to robotics, drones, mapping, defense, building security, mining and agriculture companies.
The strategy has appeared to pay off. Ouster says it has 400 customers from 15 industries.
The $60 million in additional funding follows a Series A raise of $27 million announced back in 2017 as Ouster came out of stealth mode. In the years since, the company led by Angus Pacala has grown to more than 100 employees and announced four lidar sensors, with resolutions from 16 to 128 channels, and two product lines, the OS-1 and OS-2. The startup expects to nearly double its headcount in the coming year to support further product line development.
The $60 million in equity and debt funding includes investments from Runway Growth Capital and Silicon Valley Bank, as well as additional funding from Series A participants Cox Enterprises, Constellation Tech Ventures, Fontinalis Partners, Carthona and others.
Ouster said the additional investment has helped to develop Ouster’s product lines, including the launch of the OS-1 128 lidar sensor, and fund the expansion of its production facilities.
The company also announced the appointment of Susan Heystee, senior VP for OEM business at Verizon Connect, to its board of directors.
Waymo, the self-driving car company under Google’s Alphabet, could be a new competitor to the company. Waymo announced this month it will start selling its custom lidar sensors to companies outside of self-driving cars. Waymo will initially target robotics, security and agricultural technology. The sales will help the company scale its autonomous technology faster, making each sensor more affordable through economies of scale, Simon Verghese, head of Waymo’s lidar team, wrote in a Medium post at the time.
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Quantifying the driverless startup boom
For driverless car startups, raising capital seems to happen on autopilot. Investors and acquirers have put billions into the space over the past couple of years in the race for early-mover advantage. They’ve shown no desire to hit the brakes lately either, as indicated by a spate of recent deals. Read More
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