The Swedish transport disruptor Einride has had a good year.
When the Swedish transport agency agreed to have Einride’s driverless electric trucks running on public roads in spring 2019, the company started to really gain credibility.
Now, six months later, the startup has raised $25m from various venture capitalist companies, such as Swedish EQT Ventures and the Japanese fund NordicNinja.
It’s true that $25m is not a lot for a company planning to disrupt a whole transport system and which faces big competition from local actors such as Volvo Trucks and Scania as well as other global truck companies.
According to Robert Falck, chief executive and cofounder of Einride, it will take far more investment to make a dent in the global transport market.
“This capital is by in no way final, however, it takes us to the next level. The amount raised is also a trade-off when it comes to diluting the company shares,” Falck told Sifted.
When it comes to transport, Falck has a soft spot for the US, where he believes the battle over vehicle automation will be fought. With new investors like the Silicon Valley venture capital company Plug and Play Ventures, he believes he can attract more US customers.
“Plug and Play’s corporate customers put us in the second position of the most interesting of 500 companies to collaborate with. The investment is likely to lead to talks with some of the VC’s customers,” Falck said.
To raise the Series A round Einride had to show concrete technical progress, such as driving an electric, autonomous vehicle on a public road for the first time. But it also had to show that the company already has paying customers.
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“The customers we have are also important as they show a concrete commercial demand and transport-intensive companies dare to invest in this type of new innovative solution,” said Falck.
Reducing operating costs
The T-pod, which is what Einride calls its lorry, travels at just 5km/hr or 3mph, but with a full capacity of 26 tonnes and with no driver cabin it is estimated to reduce road freight operating costs by around 60% versus a diesel truck with a driver.
Einride already has five Fortune 500 retail companies as customers but says it’s too early to say which ones. In Europe, the customers include the Swedish supermarket Lidl and the German logistics company DB Schenker. At DB Schenker the trucks are used for taking cargo back and forth between the logistics centre and the terminal in the Swedish town of Jönköping.
The startup also signed an agreement with Michelin in June 2019. In 2020, Einride will start rolling out its trucks at the tire manufacturer's plant in Clermont-Ferrand, France.
With the new investment, Falck hopes to be able to open an office in the US.
Next stop Asia?
Apart from the European and American markets, Asia may open up with the new Japanese investors NordicNinja. The €100m fund wants to bridge the gap between new Nordic and Baltic technologies and Japanese big corporations including its investors Panasonic, Honda and the electronics company Omron.
According to founding member Tomosaku Sohara, NordicNinja is acting very much like a corporate venture capital company — but one that can take greater risks.
“Nobody knows the future of the industry. For ten years ago, nobody predicted that Amazon or Google would focus on autonomous driving or that Google would become a competitor to Toyota. With our fund, we can focus on unpredictable technologies that our investors cannot,” Sohara told Sifted earlier this year.
According to Falck, in Asia, and Japan particularly, the interest for Einride is very large.
“It is perhaps in Japan we’ve had the greatest traction outside of Sweden and the US. We have had lots of inbound requests and I guess it is because we have been displayed as something new that generates a lot of interest from a wide array of actors,” Falck says.
And, although Japan is showing a lot of interest, Einride is focused on Europe and the US for now.
Ericsson Ventures, Norrsken Foundation and Plum Alley Investments also took part in Einride's most recent funding round.