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Gatik Reveals Expansion Into Texas — But With Koch Support?

What motives might Koch Disruptive Technologies have for investing in a middle mile autonomous startup?

Earlier this week, I wrote about how Walmart was extending its delivery reach into a white label platform as well as with Gatik autonomous vehicles. Since then, Gatik has announced its expansion into a 4th market, Texas, largely as a result of capital infusion from Koch Disruptive Technologies.

There’s a lot to unpack here. What was the Gatik funding agreement with Koch? Why is Koch interested in autonomous delivery vehicles? How will the influence of Koch affect the direction and future of Gatik? What does Koch want with cleantech companies like Gatik, anyways?

Here’s the big picture of the Gatik Series B funding from its press agent.

  • Gatik raised $85 million in Series B, bringing the total amount raised to $114.5 million. The round was heavily oversubscribed.
  • The investment was lead by Koch Disruptive Technologies (KDT).
  • Existing investors: Innovation Endeavours, Wittington Ventures, FM Capital, Dynamo Ventures, Trucks VC, Intact Ventures — and others also participated.
  • Several strategic investors were added, all of whom will contribute their unique experience and expertise to advance Gatik’s mission.
  • How the funding will be used:
    • Advance its commercial-grade autonomous technology
    • Scale its fleet of Class 3-6 multi-temperature Autonomous Box Trucks across new markets in North America
    • Grow with existing and new customers
    • Substantially increase its team size

The press release referred to Gatik’s intent to draw upon the $85 million in Series B funding to “significantly expand North America’s first autonomous Middle Mile logistics network.” It described new investor Koch Disruptive Technologies (KDT) as “renowned for supporting high-growth companies that disrupt current market alternatives with demonstrated technology.”

Is this the same Koch that has created a vast industrial web that transforms raw fossil fuels into usable goods? The same Koch that endlessly pollutes US air, water, and soil? That buys off Congress and stalls zero emissions technology?

Koch: A Lucrative Blend of Pollution, Speculation, Law-Bending, & Self-Righteousness

Deep dives into the methods and manipulation of various Koch companies are not unusual for CleanTechnica.

Tina Casey was curious about Koch Industries’ investment in REE through its subsidiary Koch Strategic Platforms.

Editor Zachary Shahan commented on how the Republican party in the US “will chuck concern about crony capitalism out the window in order to provide Koch Industries” and others with the tools “to attack the immoral cleantech companies that are trying to steal the oil, gas, and coal industries’ God-given right to rape the air and water.”

Steve Hanley wrote about:

  • Minnesota’s lawsuit against 3 entities that are part of Koch Industries as well as ExxonMobil and the American Petroleum Institute, describing “the defendants’ nefarious actions, a restraining order barring them from continuing to lie about their activities, and money to pay for a public education campaign on climate change;”
  • A flawed American Energy Alliance survey, explaining that AEA is a “front group for Koch Industries;” and,
  • How  the American Legislative Exchange Council — created and funded largely by Koch — drew up “model legislation designed to protect the interests of pipeline operators,” which led to the arrest of protesters, including a documentary filmmaker.

As Rolling Stone noted in an exposé, Koch also produces billions of pounds of petrochemicals, which, in turn, become the feedstock for other Koch businesses. Koch’s hunger for growth, they say, “is insatiable,” with the value of Koch Industries growing 4,200-fold since 1960, outpacing the Standard & Poor’s index by nearly 30 times. They add that “the Koch family’s lucrative blend of pollution, speculation, law-bending, and self-righteousness stretches back to the early 20th century.”

What’s in cleantech for Koch, anyways? And why Gatik?

Koch as Disruptive in Technology?

Bloomberg Green offers some hints about the Big Oil’s increasing general desire to fund cleantech. Early investor interest in cleantech was solar, wind, biofuels, or efficiency, but today venture firms are interested in food and — wait for it — mobility, which “is a far broader category than transport fuel.”

NPR reported how, “Mounting urgency about climate change has finally reached the boardrooms of Exxon Mobil, BP, Shell and other international oil companies. Under intense pressure, these companies are universally pledging to prepare for a low-carbon or  ‘lower-carbon’ future.”

The Wall Street Journal — that bastion of conservative economic thought — acknowledged that “some of the world’s biggest oil companies are turning to startups to help plot their future.” The long-established energy giants including BP PLC and Royal Dutch Shell PLC “are bolstering their venture capital arms—increasing budgets, hiring more staff, and doing more deals—seeking out new low-carbon technologies to help future-proof their profits.”

Clearly, it’s about the money, stupid.

Let’s deconstruct a quote from Koch family member, Chase Koch, president of Koch Disruptive Technologies, that accompanied the Gatik expansion announcement and see what we find.

“The logistics industry is experiencing unprecedented disruption driven by the explosive growth of e-commerce and demand for more efficient goods movement. Nowhere is this more pronounced than on the Middle Mile. Gatik’s transformational autonomous technology and world-class team are defining the standard in B2B short-haul logistics by addressing the most prominent issues facing today’s supply chain. We believe Gatik will be the first to commercialize autonomous technology at scale for the North American medium-duty trucking market.”

Koch pointed to “the logistics industry” as an investment opportunity due to its “unprecedented disruption” (clever how Koch immediately repeated the key word, “disruption,” from the new company’s title, eh?). Citing 2 reasons for this change — “explosive growth of e-commerce” and “demand for more efficient goods movement,” Koch appropriates jargon to indicate a currency in the field: “tranformational,” “autonomous,” “world-class,” and “defining the standard.” Instead of seeming late to the renewable energy party, Koch positions the company as futuristic and elite.

Ignoring how the US energy world “hinges on an aging, increasingly unreliable fossil fuel infrastructure dominated by a very small group of very profitable corporations,” according to the New York Times, or how regulatory hurdles have allowed various Koch companies to profit for decades, Chase Koch speaks about working alongside Gatik to the “first to commercialize autonomous autonomy at scale for the North American medium-duty trucking market.”

Koch Disruptive Technologies (have you seen how very white and male it is that they represent their company on their website?), through this discourse, seems visionary. It is helping a startup like Gatik to improve operational efficiencies, lower freight costs, enhance truck utilization, reduce logistics costs, improve fuel efficiency, and reduce delivery times. It is as if Koch has not profited by dumping billions of pounds of pollutants into our waters and skies – essentially for free. It is masking how it owes the planet enormous restitution for the damage it has done over the decades.

How Gatik Rationalizes the Koch Influence on its Future

Gatik avoids the “last mile” of direct consumer delivery and limits the number of variables its trucks will encounter on a given route.By focusing on the middle mile, delivery trucks only need to navigate between two fixed points, making it easier for Gatik to bring its autonomous driving tech to market. Gatik says it is the only company in North America offering Class 3-6 Autonomous Box Trucks that are deployed for Fortune 500 customers, and it is generating revenue with every order.

“We are very much in expansion mode, in growth mode, and felt that Koch Industries would add the most value,” Gatik CEO and co-founder Gautam Narang said in a recent interview, adding that he views the company as a strategic investor.

Narang said they plan to double the number of employees to around 150 people in the next 6 to 9 months. A focus on structured autonomy allows the company to pursue “lower costs, shorter delivery times, and sustainable, reliable capacity for our customers today,” he added.

The funding announcement coincides with Gatik making public its operations in Texas with multiple new customers. Since announcing its Series A financing in November 2020, Gatik has achieved a significant number of milestones including the launch of its new electric Autonomous Box Trucks with Walmart in Louisiana, and an industry-first partnership with Isuzu to implement OEM-grade redundancies for medium duty trucks critical for fully autonomous operations.

Gatik said it has opened an autonomous trucking facility in the AllianceTexas Mobility Innovation Zone, a 26,000-acre industrial, mixed-use, and residential planned development in the Dallas-Fort Worth area that has become a hub of transportation and logistics. Narang did say that the trucks deployed in Texas are based on the Isuzu platforms.

Gatik has been shuttling goods as part of pilot programs for Walmart in Arkansas and Louisiana, and in Ontario, Canada for Loblaw Companies Limited. Gatik also inked a manufacturing partnership with Isuzu in 2020 with an aim to mass produce medium-duty autonomous trucks by early 2023.

The decision to expand into Texas was driven by its status as an international shipping hub, the regulatory environment that supports autonomous vehicle testing, deployment on public roads, and favorable weather. Narang added that the abundance and variety of potential customers will also allow it to have a multi-tenant operation. This means it can use the same truck throughout the day for multiple customers.

Image by Gatik

 
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Written By

Carolyn Fortuna (they, them), Ph.D., is a writer, researcher, and educator with a lifelong dedication to ecojustice. She's won awards from the Anti-Defamation League, The International Literacy Association, and The Leavy Foundation. Carolyn is a small-time investor in Tesla. Please follow her on Twitter and Facebook.

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