Microsoft to invest over $10M in autonomous delivery tech startup Gatik, pushing its valuation to $700 million

Tech giant Microsoft Corp is in advanced talks to invest in San Francisco, California-based startup Gatik, Reuters reported, citing two people familiar with the discussions. The investment is part of Microsoft’s cloud partnership with autonomous middle-mile logistics startup.

According to the report, Microsoft plans to invest over $10 million in a financing round that will value the 5-year-old Gatik at more than $700 million, the sources said. As part of the deal, Gatik will use also Microsoft’s cloud and edge computing platform Azure to develop autonomous delivery technology for trucks. The sources, who requested anonymity to discuss private matters, also told Reuters that the terms of the deal could still change.

For many years, the middle mile is an important part of the logistics supply chain that enables businesses to move goods from the port to the warehouse or distribution center. Unlike the “last-mile” logistics that places products at consumer doorsteps, “middle-mile” logistics get goods from a factory or warehouse to a distribution hub. Except for big companies like Amazon, the process is fraught with inefficiency.

That’s where Gatik comes in. The company solves the inefficiencies in traditional middle-mile logistics by providing autonomous vehicles for B2B short-haul logistics. Gatik also helps companies to deliver goods safely and efficiently using autonomous vehicles. Its autonomous delivery fleet and technology are currently being used by multiple Fortune 500 retailers, including Walmart to deliver goods safely and efficiently from distribution centers to retail locations.

We covered Gatik two years ago after it raised $25 million in Series A funding to further expand its operations across North America, its team size in Silicon Valley, and its growing presence in Canada.

Founded in 2017 by Apeksha Kumavat, Arjun Narang, and Gautam Narang, Gatik’s team consists of veterans of the autonomous technology industry. With its fleet of light to medium-duty trucks, Gatik is leading the way in autonomous middle-mile delivery. The company focuses on short-haul, business-to-business (B2B) logistics for the retail industry, enabling its customers to optimize their hub-and-spoke supply chain operations, enhance inventory pooling across multiple locations, reduce labor costs and meet the unprecedented demand for contactless delivery.

“We went into the year with strong momentum from early customer partnerships and validation of our technology. We’re very proud of how we’ve supported our customers throughout this unpredictable year, and strengthened their supply chains with our product. We will leverage this new funding to continue expanding our retail partnerships and fleet deployments, grow our team and enhance our technology platform to lead the market in autonomous middle-mile delivery,” said Gautam Narang, CEO and Co-founder of Gatik. “Throughout the year we saw an increase of 30-35% in orders from our customer base, and we expect this trend to continue. We will continue to bring autonomous delivery into the mainstream, driving substantial efficiencies in supply chain logistics for retailers across North America and beyond.”

Since its inception in 2017, the company has raised millions of dollars in funding to position itself to scale and support the rapid automation of retailers’ middle-mile operations. Gatik operates its fleet of vehicles 7 days a week, 12 hours a day, on routes up to 300 miles in multiple locations across North America. Gatik’s product delivers long-term business impact, enabling major retailers to save significantly on their middle-mile delivery costs, enhance supply chain efficiency, and meet an unprecedented expectation for contactless delivery.