faction raises $4.3m to deploy 3-wheeled evs for driverless delivery

Faction Technology Secures Seed Funding for Driverless Delivery Vehicles

Ain McKendrick, founder and CEO of Faction Technology, recognized the substantial investment – both financial and temporal – typically required for designing and manufacturing an electric vehicle (EV) suitable for autonomous delivery services.

Instead of pursuing a conventional automotive development path, McKendrick focused on leveraging the power sports industry to realize his concept of a micro-logistics solution. This solution is intended for driverless delivery applications, or alternatively, for rental and operation by individuals for short-distance urban travel.

Having successfully constructed prototypes, Faction Technology has now secured $4.3 million in seed funding. This funding round was spearheaded by Trucks VC and Fifty Years, demonstrating confidence in the company’s innovative approach.

A Shift in Approach to Autonomous Vehicle Development

“We often find ourselves repeating the same processes,” McKendrick explained, drawing on his prior experience as VP of engineering at the now-defunct self-driving truck startup, Starsky Robotics. “The common practice is to adapt existing vehicles for autonomous technology. We questioned whether a different strategy might be more effective.”

Faction Technology, established last year and a recent graduate of the Y Combinator accelerator program, initiated development with a three-wheel motorcycle platform. While the company designs and builds the chassis internally, McKendrick emphasizes that this approach significantly reduces manufacturing costs compared to traditional automobile production.

The total vehicle cost is approximately $30,000, with McKendrick projecting a return on investment within two years.

Regulatory Advantages and Operational Capabilities

These vehicles are classified as motorcycle-class, granting them legal access to city streets and highways while being subject to a less stringent regulatory framework than passenger vehicles.

Cargo delivery is facilitated through a combination of autonomous operation and remote assistance via teleoperations. Faction, currently a team of around ten individuals, is collaborating with other companies to integrate the autonomous vehicle software stack.

Safety is paramount, and Faction has developed a core platform incorporating safety mechanisms that activate in the event of autonomous system failure.

“The foundational technology we are developing for these vehicles is intended for broader application across various vehicle types as the company expands,” McKendrick stated. This includes a proprietary digital vehicle architecture and a teleoperation system designed to function in synergy.

Image Credits: Faction Technology

Expanding Beyond Delivery: A Vision for Urban Mobility

While initial focus is on delivery services – termed “micro-logistics” by McKendrick – the company also envisions a rental model. This would involve deploying fleets of three-wheeled vehicles for personal transportation within cities, or for trips between urban centers and surrounding suburbs.

These rental vehicles would be largely identical to the delivery models, with key distinctions such as a transparent canopy for human-operated versions, versus an opaque canopy for delivery vehicles.

McKendrick anticipates users being able to request a vehicle through a mobile application. The vehicle would then autonomously navigate to the user’s location. Upon entering, the user would assume manual control.

The proposed service aims to provide the convenience of scooter or bike-sharing, but with enhanced weather protection and the ability to travel on highways.

“For example, a trip from San Francisco to San Francisco Airport would be ideally suited for this type of vehicle, rather than relying on larger, four-door sedans,” McKendrick explained.

Revenue Models and Future Deployment

Under the driverless delivery model, users will be charged on a per-mile basis. Vehicle rentals are expected to be priced on an hourly rate.

Faction Technology is currently establishing partnerships with manufacturers of light electric vehicles to facilitate the scaling of operational fleets. The company plans to announce its first customer trials later this year.

The objective is to deploy a pilot fleet of approximately 50 vehicles for micro-logistics testing and initiate early rider trials during the fourth quarter of the year.