Self-Driving Trucks Take Off: Kodiak's Public Debut and Gatik's Major Retail Deal

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The autonomous vehicle industry is years — maybe decades — from maturing. And so there’s still a Wild West quality to the sector, in spite of the steady stream of announcements that do show marked progress. Two such news items from this week illustrate my point of progress, possibility, and even a bit of peril (at least to the ups and downs a public market can provide).

Gatik's Expanded Partnership with Loblaw

First up is Gatik, an AV and logistics startup that is applying its tech to middle-mile trucks. The startup, which I first wrote about in 2019, announced a multi-year and expanded commercial partnership with Canada’s largest retailer, Loblaw. Under the deal, Gatik will deploy 20 autonomous trucks by the end of 2025 to provide driverless delivery to Loblaw’s network of stores in the greater Toronto area. Co-founder and CEO Gautam Narang told me the company will add another 30 autonomous trucks to the fleet by the end of 2026.

The deal is notable, and not just because of the fleet size. As Narang explained to me, the trucks will be handling the full regional network for Loblaw. This means these third-generation AV trucks will operate autonomously to pick up products from two distribution centers and make deliveries to over 300 retail stores. "These are multiple brands within the Loblaw umbrella," he said.

In other words, this is not some fixed-route pilot program. It’s commercial, and it’s complex.

Kodiak Robotics Goes Public

Next up is Kodiak Robotics, another startup I have reported on since its founding. The company, which is developing self-driving trucks for highway, industrial, and defense uses, began trading on Nasdaq this week under the tickers KDK and KDKRW.

The company, which is now called Kodiak AI, went public via a merger with special-purpose acquisition company Ares Acquisition Corporation II, an affiliate of Ares Management. The deal valued the startup at about $2.5 billion.

Kodiak raised $275 million in financing. More than $212.5 million came from certain institutional investors, including $145 million in PIPE funding and about $62.9 million in trust cash from Ares. It should be noted that the trust cash is smaller (it was $562 million), as some SPAC investors redeemed their shares.

I spoke to founder and CEO Don Burnette the day before Kodiak’s big debut about why he took the company public — let alone via a SPAC. It was a big moment for Burnette, whose family was on hand to watch him ring the bell and mark the milestone. The stock was trading at about $7.70 Friday, down about 10% from its market open.