Caterpillar acquires assets of struggling Monarch Tractor

Caterpillar has acquired the assets of Monarch Tractor, ending the United States-based startup’s attempt to pivot from hardware to a software services business. The acquisition, first reported by Bloomberg, was confirmed through filings with the United States Patent and Trademark Office. This transaction follows a statement issued by Monarch last week, which noted that its technology had been acquired by an unspecified large global equipment manufacturer. Caterpillar did not immediately respond to requests for comment, and Monarch’s CEO, Praveen Penmetsa, declined to comment beyond the company’s statement.

The asset sale caps a turbulent period for Monarch, which was founded in 2018 and raised more than $200 million over the last eight years. Although the company closed a $133 million funding round after laying off staff in early 2024, it subsequently cut more employees to restructure around software licensing. Monarch also lost its contract manufacturing partner, Foxconn—a Taiwanese electronics manufacturing giant. Foxconn had planned to manufacture Monarch’s electric tractors at a factory in Lordstown, Ohio, alongside electric vehicles for other startups. However, Foxconn sold the plant in August 2025 to SoftBank, leaving Monarch without a manufacturer. According to a January filing by a former defense lawyer for Monarch, the company ultimately entered into an assignment for the benefit of creditors, a legal process that serves as an alternative to Chapter 7 bankruptcy.

In addition to manufacturing hurdles, Monarch faced severe legal and internal challenges. Three different dealers filed lawsuits against the company, claiming its autonomous technology never worked well. One dealer, who sued Monarch in September 2025, alleged the tractors were defective and unable to operate autonomously. Monarch denied these claims in a court filing. Internally, the startup suffered from leadership division. Co-founder Carlo Mondavi spoke up about his departure last month, stating he left over a year ago due to fundamental differences in approach after experiencing reliability issues with the tractors on his farm and on friends’ farms. Mondavi, a co-founder of the company, stated: “I wanted to address them through hardware changes, while the CEO believed they could be solved more through software. I believed strongly in a different path but was ultimately blocked and pushed out alongside another co-founder.”

Why it matters

The acquisition of Monarch Tractor by Caterpillar marks the end of the startup’s struggle to pivot to a software-focused business model following multiple layoffs and legal challenges.