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Convoy, the company behind a digital freight network and marketplace that connects shippers with truckers, has raised $260 million in funding, constituting a $160 million series E round and $100 million in venture-debt.
Founded out of Seattle, Washington in 2015, Convoy works with companies including Unilever, The Home Depot, and LG Electronics, serving to improve their freight transportation efficiency, reduce costs, and improve their carbon emissions.
The problem that Convoy is striving to solve in the freight sphere is a similar one as Uber and other companies are trying to solve in the urban transport realm — it’s ultimately all about matching supply with demand, using technology. In fact, Uber itself offers a similar service called Uber Freight, which repurposes its technological infrastructure to support companies’ logistics.
Convoy’s latest funding comes at a time when the U.S. and world at large are battling numerous supply chain bottlenecks, one of which being a shortage of truckers. Convoy goes some way toward addressing this by optimizing and streamlining cargo loads, and ensuring that trucks aren’t traveling long distances with empty trailers.
“Moving freight via trucks is the foundation of our domestic supply chain — when supply chains are unreliable, companies spend more money and waste precious time,” Convoy cofounder and CEO Dan Lewis told VentureBeat. “As an industry, we need to focus less on trailer or driver shortages and more on how we do more with what we have. The real priority is getting capable carriers and drivers to run efficiently, get paid quickly for the work they do, and feel valued in their profession.”
Slow to adapt
Similar to other industries such as construction, the freight sector has historically been slow to embrace technology and has not been as quick to embrace digitalization as some industries have been– and that is where Convoy and its ilk enter the fray.
Moreover, Convoy’s mission has perhaps been made a little easier these past two years, as businesses across the spectrum have sought to counter the effects of the global pandemic through digital transformation — in many ways, companies have been forced to explore new ways to improve their bottom line. And automation plays a fundamental part in all of this, with Convoy specifically leaning on machine learning smarts to match freight loads with trucks with next to no human intervention.
“Historically, the freight industry has underinvested in technology and as a result, management teams have struggled the past two years with increased firefights,” Lewis explained. “Technology is the only path to reach efficiency and scale flexibly with demand. Machine learning and automation have revolutionized elastic capacity for freight, where carriers can operate efficiently regardless of market condition.”
Prior to now, Convoy had raised around $670 million in funding, including a $400 million tranche more than two years ago, and with it slates cash injection the company said it plans to invest heavily in bolstering its team in the first instance, including hiring engineers, data scientists, and logistics experts.
“Bigger picture, we remain focused on our mission to ‘transport the world with endless capacity and zero waste,” Lewis added. “This raise enables Convoy to continue directly addressing billions of dollars in waste in the trucking industry, accelerating our development of first-to-market products and technologies, expanding our trucking marketplace and our offerings for carriers and shippers across the U.S.”
Convoy’s series E round was led by Baillie Gifford and T. Rowe Price, with the venture-debt element coming from Hercules Capital — and it said that it secured an additional $150 million line of credit from J.P. Morgan. The company is now valued at $3.8 billion, representing more than a $1 billion increase on its series D valuation back in 2019.
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