Lockheed Martin just invested in this Silicon Valley trucking tech startup by Kirsten Korosec @FortuneMagazine August 31, 2015, 5:39 PM EDT E-mail Tweet Facebook Linkedin Share icons Riders in a peloton—the main group of bicyclists in a road race—are able to save energy by drafting off each other. Peloton Technology has taken that basic premise and added some automated driving tech, cloud computing, and vehicle-to-vehicle communication to make the trucking industry safer and more fuel efficient. Now Lockheed Martin LMT , itself a big player in automated vehicles, is investing in the Silicon Valley startup. The $17 million investment agreement, which was announced Monday was co-led by Denso International America, a supplier of advanced auto tech and components, and Intel Capital. This is part of a previously announced Series A round in April that included Magna International, Castrol innoVentures, Volvo Group Venture Capital and UPS Strategic Enterprise Fund. Lockheed’s participation in the funding round was not part of the original announcement. Peloton has developed a truck platooning system that in tests reduced fuel consumption by as much as 10% in a group of trucks traveling down a highway. The system electronically couples pairs of trucks through a combination of vehicle-to-vehicle communications, radar-based active braking systems, and proprietary vehicle-control algorithms. The system is designed to improve safety and allow trucks to travel at closer distances, which improves aerodynamics and reduces fuel use. Without the technology, trucks could still travel close together, but at a much greater risk of causing an accident if the driver fails to stop in time. A communication link enables the rear truck in the peloton to react automatically to acceleration or braking by the front truck nearly instantaneously, according to the company. The trucks are connected to the cloud and Peloton’s operations center coordinates trucks to find linking partners on the road and enables cross-fleet platooning. The system approves the linking of pairs of trucks only on suitable roads under appropriate weather, vehicle and traffic conditions. Meanwhile, the drivers still maintain steering control and command of the vehicles. Peloton began demonstrating the system back in 2013. The company says the system reduces fuel consumption by 10% for the rear truck and 4.5% for the front truck, based on industry-standard SAE J1321 Type II fuel economy testing conducted by the North American Council for Freight Efficiency. Most fleet operators attribute some 30% to 40% of their operating costs to fuel expenditure, according to ABI Research. In theory, if enough trucks had the platooning technology, the industry-wide savings could be significant. The investment is an endorsement of the tech as well as the folks behind it—a who’s who of the auto, tech, and startup worlds. Founder Josh Switkes, who has a doctorate in mechanical engineering from Stanford University, developed production control systems for Volkswagen, Audi, and powertrain startup Tula Technology. The company’s chief innovation officer was the former director of engineering at Tesla Motors and studio head at IDEO. The company’s team of engineers hail from eBay, Yahoo YHOO , Oracle ORCL , deCarta, Dash, DARPA’s automated vehicle challenges, Google GOOG , the VW Electronics Research Laboratory, and Stanford Center for Automotive Research. The company has logged 15,000 platooning miles in on-highway demonstrations, government, private, and fleet tests in Nevada, Utah, Texas, Ohio, Florida, Alabama and Michigan. Demonstrations and fleet pilot deployments in additional states will be held later this year, the company says. Note: An earlier version of this article said that Lockheed Martin was part of a new funding round. In fact, it was part of the original series A funding announced earlier this year.