Autonomous logistics startup Outrider today closed a $65 million funding round led by Koch Disruptive Technologies. Outrider says the funds will be used to accelerate go-to-market efforts as it expands its workforce to over 110 employees and grows its customer base of Fortune 500 companies.

Driverless vehicle technology has already begun to transform industries. TuSimple, Einride, and others have raised tens of millions for freight systems that transport logs, shipping containers, and other cargo autonomously. Some experts predict the coronavirus outbreak will hasten adoption of autonomous delivery solutions. Despite the public’s misgivings about self-driving cars and their need for regular disinfection, the vehicles promise to minimize the spread of disease by limiting driver-rider contact.

Outrider, which is headquartered in Golden, Colorado, was founded in 2017 with the goal of automating vehicle movement in freight hubs to reduce costs while improving safety. The company doesn’t own or operate any vehicles itself. Instead, it provides a software-as-a-service (SaaS) solution for customer-owned fully and semi-autonomous freight and transportation fleets, as well as a team of technicians to monitor those fleets’ progress remotely.

The company’s platform handles autonomous distribution yard operations at logistics hubs, such as distribution centers, warehouses, and rail yards. This commonly entails moving trailers around the yard and to and from loading docks, hitching and unhitching trailers, connecting and disconnecting trailer brake lines, and monitoring trailer locations.

VB Event

The AI Impact Tour

Connect with the enterprise AI community at VentureBeat’s AI Impact Tour coming to a city near you!


Learn More

Outrider claims the computer vision-based vehicles orchestrated by its software, which are capable of up to level 4 automated driving — defined by the Society of Automotive Engineers as fully self-driving in most conditions — exceed not only efficiency and safety standards but stringent environmental standards as well. The details are a bit vague, but Outrider says its three-way system, which includes a management engine and the aforementioned yard trucks and site infrastructure, works with much of the supply chain software large enterprises already use.


Outrider is tackling a market that’s practically unrivaled in terms of shipment volume. Since 2015, venture capital deals worth around $1.2 billion have been targeting logistics-focused robotics and automation companies in the U.S., according to PitchBook. And the value of goods transported as freight cargo in the U.S. was estimated to be about $50 billion each day in 2013. The driverless truck market — which is anticipated to reach 6,700 units globally after totaling $54.23 billion in 2019 — stands to save the logistics and shipping industry $70 billion annually while boosting productivity by 30%.

Besides promised cost savings, the growth of trucking automation has been driven by a shortage of drivers. In 2018, the American Trucking Associates estimated that 50,000 more truckers were needed to close the gap in the U.S., despite the sidelining of proposed U.S. Transportation Department screenings for sleep apnea.

In the short term, the pandemic and corresponding rise in online shopping threatens to push supply chains to the breaking point. For example, early during the COVID-19 crisis, Amazon was forced to restrict the amount of inventory suppliers could send to its warehouses. Ecommerce order volume has increased by 50% compared with 2019, and shipment times for products like furniture more than doubled in March, hitting distribution centers hard. ABI Research estimates that in response, nearly 28% of warehouses globally will deploy robots by 2025, compared with around 3% in 2018.

Outrider has a rival in Aurora, which in February 2019 attracted a $530 million investment at a valuation of over $2 billion. There’s also Ike, a self-driving truck startup founded by former Apple, Google, and Uber Advanced Technologies Group engineers, and Kodiak Robotics, which is the brainchild of Paz Eshel and former Uber and Otto engineer Don Burnette. That’s in addition to autonomous forklift developers Third Wave Automation and Vecna Robotics, Embark (which integrates its driverless systems into semis), and autonomous truck solutions from incumbents like Daimler and Volvo.

But Outrider is betting its holistic solution will set it apart from the pack. It’s currently conducting tests with even Fortune 500 companies at five distribution centers and with Georgia-Pacific, one of the world’s largest manufacturers and distributors of tissue, pulp, and paper. Outrider CEO Andrew Smith says the pandemic has increased the number of inbound inquiries in automation from logistics-heavy enterprises, leading to millions of dollars in revenue from paid pilots.

“Automation and electrification directly address fluctuations in the supply chain from seasonality to global pandemics. With COVID-19-related supply chain disruptions, supply chain leaders have even more urgency to make automation investments,” Smith told VentureBeat via email. “We’re focused on deploying and supporting yard automation across our customers’ distribution networks.”

Existing backers NEA, 8VC, and Prologis Ventures participated in Outrider’s series B round, alongside new investors Henry Crown and Company and Evolv Ventures. The round followed $53 million in seed and series A rounds completed earlier this year, bringing the company’s total raised to $118 million.

VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.