Ex-SpaceX engineers' autonomous freight-rail startup raises $100 million

A startup founded by three former SpaceX engineers who once designed rocket avionics has raised $100 million to expand a fleet of driverless, battery-powered railcars that haul shipping containers without a locomotive or an onboard crew. Parallel Systems, based in Los Angeles, disclosed the Series C round on Wednesday, extending a federally supervised pilot program that has quietly been running trains near the Port of Savannah, Georgia, for more than a year.

The round was led by the investment firm AVP, with participation from Hillspire, Agility Global, Cobalt Capital, Anthos Capital, Congruent Ventures, Riot Ventures and Collaborative Fund, according to reporting by TechCrunch, which first disclosed the deal. Combined with a roughly $50 million Series A in 2022 and a $38 million Series B that closed in April 2025 and had already pushed the company's funding past $100 million, Wednesday's investment brings Parallel's total capital raised since its 2020 founding to somewhere north of $200 million.

A market built for trips under 500 miles

Parallel's pitch centers on a gap in the US freight system. Roughly 60 percent of American freight trips cover less than 500 miles, a distance range that railroads have largely abandoned to trucking over the past several decades because conventional trains need a minimum volume of freight to justify the cost of a locomotive, fuel and a two-person crew. Chief executive Matt Soule has described the resulting imbalance bluntly: "Less than 500 miles is hard for railroads to do competitively," he told TechCrunch. "Our technology allows them to take some of that trucking."

The company's vehicle, which it calls Panther, is a self-propelled, battery-electric flatcar that can carry a single intermodal container up to 500 miles on a charge, at speeds up to 25 miles per hour. Because each car has its own motor, batteries and sensors, the cars can travel alone or link into coupler-free "platoons" of up to 50 vehicles, and — unlike a conventional freight train — can split apart and re-sort themselves without a human throwing a switch. Soule has pointed to the choke points of Southeastern ports as the type of problem the system is built to ease. "If you ever go to the Port of Savannah, you see the truck lines coming in and out of the port — it's insanity," he said.

"Less than 500 miles is hard for railroads to do competitively. Our technology allows them to take some of that trucking." — Matt Soule, co-founder and CEO of Parallel Systems

Years of regulatory review before the first container moved

The funding round lands on top of an unusually long and public regulatory process. Parallel and two Genesee & Wyoming short lines, Georgia Central Railway and Heart of Georgia Railroad, petitioned the Federal Railroad Administration in August 2023 for temporary waivers from rules written for conventional locomotives and cars — covering everything from cabs and sanders to brake valves and uncoupling levers — so the driverless cars could legally operate on US track. The agency held a public hearing in Vidalia, Georgia, and opened a formal comment period that drew 154 submissions; 32 supported the pilot and 122 raised concerns, according to the agency's own tally. The FRA ultimately approved the request in January 2025, authorizing a seven-phase test program that starts on an isolated two-mile stretch and gradually expands to 160 miles of track feeding the Port of Savannah, with the final phase permitting a limited number of revenue-generating container moves.

That slow, staged rollout reflects how new the underlying technology still is to American freight rail, which has not deployed a driverless vehicle of this kind commercially before. Soule told TechCrunch the company has spent the pilot "verifying all the safety controls and operating practices that are best evaluated in a real-world setting, with a path toward our first commercial payload coming up very soon."

Railroads, truckers and unions have a stake

The technology's arrival touches several groups at once. Short-line and regional railroads stand to gain a tool for competing on routes they long ago ceded; Genesee & Wyoming, which operates the Georgia lines hosting the pilot, is effectively testing a new line of business. Truckers and trucking companies, meanwhile, operate in a freight sector that has endured a prolonged downturn, with a wave of carrier bankruptcies reported industry-wide in recent years — a backdrop that sharpens the stakes of any technology aimed at shifting freight off highways.

Rail labor has been the most vocal skeptic. During the FRA's comment period, Vince Verna, national vice president of the Brotherhood of Locomotive Engineers and Trainmen, testified that the technology was "not ready for prime time," citing unresolved questions about stopping distance, how the cars interact with track workers, and battery hazards. He credited Parallel for including certified locomotive engineers in its proposed operating plan but said the union still had "many critical safety concerns with the program that was submitted to the FRA." The company's wider fundraising and investor base — which includes strategic backers with their own logistics and infrastructure interests, such as Agility Global — suggests the industry view is less uniform than labor's.

What happens next

Parallel says a first commercial payload move is close, which would mark the pilot's transition from pure testing to limited revenue service along the Georgia corridor. The company is also looking well beyond the Southeast: in late September it announced a partnership with Agility, a Kuwait-founded logistics and investment group listed on the Abu Dhabi Securities Exchange, to identify priority corridors for autonomous freight rail across the Gulf Cooperation Council states and the wider Europe-Middle East-Africa region. No timeline, investment figure or specific route has been disclosed for that effort.

For now, the next concrete milestones remain regulatory and operational rather than commercial: moving through the FRA's remaining test phases, demonstrating the platooning and self-sorting capabilities at greater scale, and converting the pilot's final phase — which permits limited revenue container moves — into a genuine commercial service. How quickly Parallel can do that, and how persuasively it can answer labor's safety objections, will determine whether the $1 trillion short-haul freight market it is chasing actually opens up.