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Former SpaceX engineers bring autonomous, electric rail vehicle startup out of stealth

Parallel Systems, a company founded by three former SpaceX engineers to build autonomous battery-electric rail vehicles, came out of stealth mode on Wednesday with a $49.55 million Series A raise. The company, which has raised $53.15 million to date, including a $3.6 million seed round, is working to create a more efficient, decarbonized freight network that flows on top of existing railway infrastructure.

The funds will be used to build Parallel System’s second-generation vehicle and launch an advanced testing program that will help the startup figure out how to integrate its vehicles into real-world operations, according to co-founder and CEO Matt Soule.

Parallel Systems also intends to use the new investment — which was led by Anthos Capital and includes investments from Congruent Ventures, Riot Ventures, Embark Ventures and others — to hire about 60 engineers, most of whom will deal with software, says Soule.

The startup’s rail vehicle architecture aims to solve a few problems: carbon emissions in freight, supply chain constraints of trucking and limits of railway freight. In the U.S., rail network accounts for 28% of all freight movement, but most of that is bulk movement activity — large trains that move primary resources like coal and lumber. A smaller portion of rail freight movement is referred to as intermodal activity, which essentially involves moving steel containers between a range of different modes of transportation, like boats and trucks.

“Rail has a lot of opportunity to grow when it comes to intermodal, and we focus on this because this is where we think there’s competition and appetite for innovation,” Soule told WebicNews.

Parallel’s patent-pending vehicle architecture involves individually powered railcars that can load and transport standard shipping containers as a single or double-stacked load. They can join up to form “platoons” or split off to multiple destinations while en route, which means they don’t need to hold large volumes of freight to make the service economical, although Soule says they can actually carry much more weight than trucks, which handle most freight transportation in the U.S.

“For the unit economics of freight trains to get competitive with trucks, you need really long trains, and you’re amortizing the cost of that locomotive and crew over that one really long train,” said Soule. “When that becomes a problem is when you’re figuring out where to park that big train, and the answer is, not many places.”


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