Tech mainstay Microsoft looks to invest a substantial sum in Gatik to facilitate its self-driving ambitions further.
Microsoft Corporation (NASDAQ: MSFT) is reportedly planning to invest $10 million in California-based autonomous driving startup Gatik. According to inside sources, the computer software giant is already in advanced talks with Gatik as part of its cloud partnership with the company. Furthermore, Microsoft’s $10 million outlay towards Gatik comes via a financing round that values the company at more than $700 million.
Microsoft-Gatik Deal Terms Subject to Change Despite Advanced Talks
Under the deal, Gatik will use cloud and edge computing resources provided by Microsoft’s Azure in developing autonomous delivery technology. This technology will provide the core support for Gatik’s self-driving trucks.
Although the fundamentals of the Microsoft-Gatik deal appear set, inside sources state that the terms of the agreement could still change.
Founded in 2017 by Gautam Narang and Arjun Narang, Gatik focuses on middle-mile, business-to-business deliveries for the retail industry. The autonomous startup specializes in transporting goods from suppliers and ports to warehouses. Since 2021, Gatik has launched fully autonomous commercial delivery initiatives with Walmart Inc in Arkansas and Loblaw Companies Ltd in Ontario, Canada. Interestingly, the driverless trucking company appears set to expand its client base even further. For instance, American mailing tech platform Pitney Bowes plans to deploy Gatik in its e-commerce logistics network in Dallas. The rollout of this development will take place within the first quarter of this year and should boost delivery while reducing logistics costs.
Since its inception, Gatik has raised more than $120 million from a host of investors. These include Goodyear Ventures, Koch Disruptive Technologies, Innovation Endeavors, and RyderVentures. Interestingly, Gatik has yet to announce any new funding since a Series B fundraiser back in July 2021. At the time of that exercise, there was no valuation estimate available.
On Wednesday, Gatik announced a successful technology testnet from Goodyear Tire and Rubber Co. According to reports, this technology helps in snowy and slippery conditions by detecting low grip conditions. In addition, the Goodyear Sightline technology also improved the safety and performance of Gatik’s trucks during Canada’s winter climate.
Microsoft Autonomous Driving Exertions
Microsoft is among several prominent tech companies that are currently investing in self-driving technology. Exactly two years ago, the tech giant invested in General Motors-owned Cruise, which specializes in robotaxis. The Microsoft-Cruise deal is worth $30 billion and would also see Cruise deploy Azure to ramp up its self-driving vehicle solutions for commercial purposes. The Cruise initiative currently competes with Amazon’s Zoox and Alphabet’s Waymo.
Autonomous Driving Developmental Headwinds
Autonomous driving technology is shaping up to be the next tier of transportation and logistical endeavors. However, this emerging technology is also facing setbacks due to regulatory concerns regarding safety. In addition, the revolutionary technology of autonomous driving has weathered less accessible funding in a slowing market.
Last November, Ford, and Volkswagen discontinued their autonomous technology unit Argo AI. At the time, the companies stressed how difficult it was to sustain the development of self-driving innovation. According to Ford and Volkswagen, creating self-driving robotaxis is more challenging than “putting a man on the moon.”
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
