Convoy Reloads With $185M For Its Freight Shipment Marketplace
Convoy, an online marketplace that connects shippers with freight truck fleets and independent drivers, announced today it raised $185 million in a Series C fundraising round led by CapitalG, the growth equity investment fund of Alphabet, Google’s parent company.
With its new funding, Seattle-based Convoy plans to continue expanding its network of customers and truckers to more U.S. regions, CEO Dan Lewis says. The company uses its automated technology to track available trucks and delivery job offers so it can better match freight carriers with shippers’ needs. With the online network covering more ground, it can offer more options to customers through its mobile app, Lewis says.
As it oversees masses of data, Convoy is able to tell shippers when they can get a better rate and a better truck if they can change the pickup time, for example. The company also helps carriers find jobs on their return trips so they can avoid the expense of driving with trucks empty, Lewis says. This now happens 40 percent of the time, he says.
“The more volume and the more markets, the more efficient we become,” he says.
Convoy, founded in 2015, launched its service in the Pacific Northwest, and now manages freight-hauling activity in regions west of the Rocky Mountains, in Texas and the wider south central part of the United States, and in major markets in the Midwest and northeastern United States, Lewis says. Convoy will now push further into southern states including Georgia, Florida, and the Carolinas, he says. Among its customers are large shippers including Unilever, GE Appliances, Land ‘O Lakes, and window glass contractor J.R. Butler.
The company, which currently has 300 employees, plans to staff up its product and engineering teams and build more features around its core load-matching service, Lewis says. Technology offers “endless opportunities” to streamline the freight-shipping process, he says. To minimize points of friction such as the hand-off of loads from trucks to customer delivery points, Convoy is starting to integrate factors such as warehouse operations into its database.
With its new capital, Convoy’s fundraising total now exceeds $265 million. Joining CapitalG in the Series C financing were new investors Lone Pine Capital as well as funds and accounts advised by T. Rowe Price Associates. Earlier investors Greylock Partners and Y Combinator also participated.
Convoy isn’t the only company that spotted trucking as a field ripe for technological disruption—-others include Uber Freight, Transfix, Trucker Path, and OnTruck. Tech-based companies are competing with traditional freight brokerage businesses by trying to offer lower fees, as well as speedy transactions and enhanced services.
These automated marketplaces could be laying the groundwork for a future freight transport market that includes self-driving vehicles. Lewis says Convoy could be “a great option for companies that build autonomous trucks.” But he doesn’t see Convoy as a threat to the livelihoods of truck drivers. In fact, the company can have the opposite effect, at least in the near term, he says.
“I think it’s going to be a very long time before drivers are not in these trucks,” Lewis says. Freight delivery involves many tasks for a driver to do aside from sitting at the wheel, he says.
Right now, Convoy is helping shippers deal with a shortage of truck drivers and intermittent shortages of truck capacity, he says. The company works with many small carriers and independent owner/operators. By connecting them to an efficient marketplace and lowering costs such as running a returning truck without a cargo, Lewis says, Convoy is hoping to encourage small companies to add more trucks and beef up their hiring.
“We need more truck drivers,” Lewis says.
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