Parallel Systems has secured a $100 million Series C funding round. The startup builds battery powered autonomous rail vehicles designed to haul freight short distances. AVP led the funding round. Additional participants include Hillspire, Agility Global, Cobalt Capital, Anthos Capital, Congruent Ventures, Riot Ventures, and Collaborative Fund.
Matt Soule, Paul Trojen, and John Howard founded Parallel Systems in 2020. All three co-founders previously spent years designing rocket avionics systems at SpaceX. Their startup aims to bring fresh technology to the freight rail industry. Freight rail has largely relied on longer trains rather than technological advances in recent years.
Autonomous rail vehicles replace traditional trains
Parallel Systems developed a rail vehicle called the Panther. The Panther can move several tons of freight as far as 500 miles without an operator. These vehicles can travel independently or in short platoons. Traditional freight rail uses precision railroading to build longer trains on fixed schedules. Parallel Systems bucks this trend by eliminating couplers between cars. The coupler free design lets vehicles split up at train yards without human help. Sensors on the Panther monitor the tracks for obstacles once the vehicle is cleared to operate on a section of track.
Shorter rail routes have been largely abandoned by major railroads. This shift allowed trucking companies to capture a significant portion of the $1 trillion surface freight market. Roughly 60 percent of freight trips in the United States are under 500 miles. Trucking companies handle a majority of those short trips. Record high diesel prices recently pushed at least 16 trucking companies into bankruptcy over a few weeks. Parallel Systems wants to help railroads recapture short haul market share. Matt Soule noted that distances under 500 miles remain difficult for traditional railroads to manage competitively.
Autonomous freight targets short haul shipping
Drayage trucking companies transport freight short distances. These companies face severe traffic congestion around major shipping hubs like the Port of Savannah. Traffic delays reduce the number of daily deliveries a trucking company can complete. Parallel Systems believes its autonomous rail technology offers trucking companies greater certainty. Drayage operators are intrigued by the prospect of moving freight closer to customer doors. This approach could allow trucking companies to complete more deliveries each day.
Parallel Systems received approval from the Federal Railroad Administration a year and a half ago. The startup has been operating on 160 miles of track near the Port of Savannah in Georgia. This real world testing verifies safety controls and operating practices. Parallel Systems will use its new Series C capital to scale manufacturing of its third-generation vehicle and speed up its commercial rollout.
