Convoy Raises $62M From Gates, Y Combinator for Trucking Marketplace
Convoy, a startup trying to modernize the way truck drivers connect with customers, just got a $62 million boost from investors including the Y Combinator Continuity Fund and Microsoft co-founder Bill Gates.
The Seattle startup, which makes technology that would automate the work of freight brokerages and dispatchers, announced the Series B funding round that was also joined by Mosaic Ventures, former U.S. Senator Bill Bradley, and InterActiveCorp. Chairman Barry Diller.
Other investors in Convoy, which has now raised $80 million since it began in 2015, include Jeff Bezos, Greylock Partners, Marc Benioff of Salesforce, Dara Khosrowshahi of Expedia, Ali and Hadi Partovi of Code.org, and several other prominent tech executives. The new funding will support Convoy as it grows its service area beyond its Pacific Northwest origins and entices more drivers on to its platform.
Convoy joins a crowded field of Uber-for-trucking startups—including Uber itself, through its Uber Freight business. Others include Trucker Path, OnTruck, and Transfix, which announced $42 million in new funding earlier this month. Through the first half of the year, trucking technology companies had raised $478 million, according to CB Insights data. There are more than 190 trucking startup companies listed on AngelList working on all aspects of the $700 billion business of moving goods by road.
At Convoy, the idea is to use mobile apps, real-time GPS, matching algorithms, predictive analytics, and other modern technologies to squeeze out inefficiencies in the way truck drivers find loads to haul across the country. Its shipper customers include Unilever, Anheuser-Busch, Niagara Bottling, and Tenaris.
Convoy promises drivers optimized routes, jobs tailored to their preferences and equipment, fewer miles driven with empty trailers, transparent pricing, and fast payment. Convoy and its competitors make money by taking a percentage of the payment for each shipment, just as freight brokers do today, though they say it’s significantly below what brokers charge.
An estimated 1.7 million people were employed as heavy truck drivers in the U.S. according to the latest Bureau of Labor Statistics data. It is one of few occupations in which someone with only a high school education can earn something approaching a living wage—the mean annual wage was $43,590—and is viewed as one of the most likely to be disrupted by the march of artificial intelligence and automation technologies.
Converting the analog, human-driven brokerage process to a digital, automated one would be essential to a future of widespread autonomous trucking.
(Cargo and freight agents—who would seem to be at most risk of losing their jobs to the automation technology Convoy and its competitors are building—numbered 88,920, according to BLS estimates.)
Apart from the startups such as Convoy that are modernizing the brokerage side of the business, another large group of well-funded startups, established technology companies, and automotive manufacturers are developing autonomous vehicles.
The data that startups like Convoy are gathering as they create a digital network of truckers and shippers could have enormous value when autonomous big rigs are ready to join their human counterparts on the road.