Los Angeles-based transportation technology company Parallel Systems has raised $100 million in Series C funding to scale its battery-electric autonomous rail vehicles and compete with trucking in the short-haul freight market.
The round was led by AVP, with participation from Hillspire, Agility Global, Cobalt Capital, Anthos Capital, Congruent Ventures, Riot Capital, and Collaborative Fund.
The latest funding brings Parallel Systems’ total capital raised to more than $200 million.
Parallel Systems Targets Short-Haul Freight
Parallel Systems is developing autonomous, battery-powered rail vehicles designed to move freight on routes of up to 500 miles.
The company believes short-haul freight has become difficult for traditional railroads to serve competitively. Many railroads have focused on running longer trains on fixed routes, while trucking companies have captured much of the short-distance freight market.
Parallel Systems wants to change that by making rail more flexible and economical for shorter routes.
“Less than 500 miles is hard for railroads to do competitively,” said Matt Soule, co-founder and CEO of Parallel Systems. He said the company’s technology could help railroads recapture some freight currently transported by trucks.
Battery-Electric Panther Rail Vehicle
Parallel’s technology is built around its Panther rail vehicle.
Unlike traditional rail cars, the vehicles do not use couplers. Instead, they can operate independently or travel together in platoons.
This design allows vehicles to separate at rail yards without requiring workers to manually uncouple traditional train cars.
The battery-powered vehicles are also designed to reduce emissions, while moving freight by rail can help reduce the number of trucks on congested roads.
$100M Funding to Scale Manufacturing
Parallel Systems plans to use the new funding to scale production of its third-generation Panther vehicle, accelerate commercialization and expand into international markets.
The company was founded in 2020 by former SpaceX engineers, including CEO Matt Soule. The founders previously worked on rocket avionics systems at SpaceX.
Parallel has already been testing its technology in real-world rail corridors.
The company received approval from the Federal Railroad Administration (FRA) to operate near the Port of Savannah in Georgia and has been testing its system across about 160 miles of track.
Parallel is working with short-line railroad operator Genesee & Wyoming as part of its Georgia pilot program.
Railroads Could Take Back Short-Haul Freight
Short-haul freight is a large part of the U.S. transportation market. Around 60% of U.S. freight trips are under 500 miles, with trucking handling most of these shipments.
Parallel Systems believes its autonomous rail technology could give railroads a way to compete for some of this business again.
The company also sees potential benefits for trucking and drayage companies. By moving freight by rail for part of a journey, trucks could potentially spend less time stuck in traffic and make more deliveries each day.
With its latest $100 million funding round, Parallel Systems is now focused on moving from pilot programs toward commercial deployment and large-scale manufacturing.
