Convoy accelerating Digital Freight Transformation with $260m investment
Convoy, the nation’s leading digital freight network, raised $260 million in new funding, comprised of a $160 million Series E preferred equity round led by Baillie Gifford and funds and accounts advised by T. Rowe Price Associates, Inc., as well as a $100 million venture-debt investment from Hercules Capital, Inc.
The company also secured a new $150 million line of credit from J.P. Morgan. This new funding will enable Convoy to accelerate the development of its efficiency-focused technologies in response to surging customer demand within the nation’s $800 billion trucking industry. With the most recent equity investment, Convoy is valued at $3.8 billion.
“Every day millions of truck drivers get in their cabs and do the work that keeps our economy moving while ensuring people get what they need,” said Dan Lewis, Co-Founder and CEO of Convoy. “The pandemic highlighted how important trucking is and how volatile and inefficient this industry can be. We know that we can do better by using modern technology and algorithms to help orchestrate freight logistics, improve service, reduce waste, and help drivers. That is Convoy’s mission.”
“When we first invested in 2019, the trucking industry was ripe for disruption and we were impressed with Convoy’s vision and early success in driving the future of freight,” said Gary Robinson, Investment Manager at Baillie Gifford. “Since then, Convoy has built a world-class management team, including seasoned executives who’ve successfully led digital transformations in other industries and further enhanced its technology platform. They’ve been able to strengthen their relationships with shippers, expand their network of truckers, and deliver strong business growth. We’re delighted to lead this round and look forward to supporting the Convoy team as they grow and scale the business in the years ahead to further transform the U.S. trucking industry.”
Convoy uniquely activates small trucking companies which form the backbone of the U.S. freight industry. Truckers benefit greatly from Convoy’s easy to access, desirable freight, fair and market based pricing, universal trailer pool, attractive payment terms and other ancillary benefits that seek to level the playing field between them and their often larger competitors. Products and programs like Convoy Go, Convoy for Brokers, Dynamic Backup and Guaranteed Primary keep Convoy at the forefront of innovation.
“Convoy keeps expanding via industry-leading technology and an innovative service offering,” said Evan Armstrong, President of Armstrong & Associates. “By incorporating load planning and optimization routines targeting both the spot and contract truckload markets, Convoy continues to increase operating efficiencies and drive out costs helping it create more sustainable supply chains for customers.”
In 2015, Convoy pioneered a new approach to trucking, digitally connecting shippers and carriers to the Convoy platform, applying machine learning models to more efficiently match carriers to loads. Today, Convoy’s platform connects shippers and freight brokers to a nationwide network of 400,000 trucks through its intuitive carrier-facing smartphone app and industry leading technology platform. The result is on demand and truly elastic truckload freight capacity, allowing shippers to move goods more efficiently, and truckers to earn more while reducing unnecessary carbon emissions.
Convoy’s technology reduces environmental waste by more efficiently bundling and matching shipments with trucks, reducing empty miles from the industry standard of 35% to 19%. If the industry as a whole were able to achieve the same efficiency improvements that Convoy sees on its bundled shipments, it would reduce CO2 emissions from empty miles from 87 million metric tons per year to 47 million metric tons.
In addition to Baillie Gifford, the T. Rowe Price funds and several other existing shareholders who participated in the round, Park West and a number of other new investors joined the ranks of Convoy’s world class investor base which includes Generation Investment Management, Fidelity, Durable Capital Partners, Capital G, Lone Pine Capital, Greylock Partners, Y Combinator, Bill Gates, Jeff Bezos, Salesforce CEO Marc Benioff, Code.org founders Hadi and Ali Partovi and U2’s Bono and The Edge among others. J.P. Morgan acted as sole arranger on the line of credit and as sole placement agent on the Series E equity financing.