Digital freight network Convoy’s mission to change the trucking industry by making the driving job more sustainable and freight movement more efficient got a new influx of cash, which raised the company’s valuation to nearly $4 billion.
“At a time when driving is more expensive than it's ever been, making the best use of time becomes even more essential,” Ryan Gavin, Convoy’s chief growth officer, told FleetOwner. “Carriers who are able to run the most efficiently will be better positioned to thrive, whether the market is tight or soft. At Convoy, we are passionate about enabling carriers and fleets to be successful.”
Founded in 2015, Convoy's latest funding totaled $260 million. It came as $160 million in a Series E preferred equity round led by Baillie Gifford and T. Rowe Price and a $100 million venture-debt investment from Hercules Capital. Convoy also secured a new $150 million line of credit from J.P. Morgan. The money 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. Convoy representatives said the company's value is $3.8 billion with the most recent equity investment.
“In times of high volatility, efficiency and productivity matter more than ever,” Gavin said on April 20. “Drivers are being squeezed by record-high fuel prices and their earnings aren’t keeping pace. So while we’re seeing signs that there may be some softening in the market, we really don’t know what will happen as the year progresses. In this uncertain environment, what we do know is that productivity and efficiency matter.”
Convoy’s platform connects shippers and freight brokers to a nationwide network of 400,000 trucks through its smartphone app. The result is an elastic truckload freight capacity, which the company said allows goods to be moved more efficiently and reduces empty miles. Convoy works a lot with small fleets of six or fewer trucks, which are typically more impacted by market fluctuation. It also offers these fleets pricing and financing services.
Gavin said that the “technology-first company” is positioned “to weather any storm and flexibly scale to meet our customers’ needs, regardless of market conditions.”
In 2015, Convoy created its approach to trucking by digitally connecting shippers and carriers to the Convoy platform, applying machine learning models to more efficiently match carriers to loads.
“Fleet executives and carriers are much more open to technology now than was the case a decade ago, especially with the widespread adoption of mobile devices,” Gavin explained. “When Convoy first started, we took the time to build a platform that carriers felt they could not only use but really trust to make their jobs and lives easier while improving their businesses."
Since that time, Convoy opened up access to hauls for fleets and drivers while providing shippers and brokers access to efficient trucking capacity when and where they need it. The company’s suite of products and programs includes Convoy Go, Convoy for Brokers, Dynamic Backup, and Guaranteed Primary.
“We’ve learned that listening to our customers truly matters, and it’s critical to focus on the problems they’re trying to solve,” Gavin added. “For example, in an industry where the tender rejection rate hovers at about 25%, programs like Guaranteed Primary address the challenges of contract freight by offering a fixed-margin solution that eliminates RFP overhead.”
Gavin explained that that focus has helped it grow and create long-term relationships with its trucking industry customers.
“When we first invested in 2019, the trucking industry was ripe for disruption. We were impressed with Convoy’s vision and early success in driving the future of freight,” said Gary Robinson, Baillie Gifford’s portfolio manager. “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.”
Gavin said that along with improving the jobs and profitability of truck drivers, Convoy’s initial focus has been on enhancing trucking’s environmental sustainability.
“Convoy lowers unnecessary carbon emissions by reducing the number of empty miles carriers run, and time they spend burning fuel while idling at a facility,” he explained. “By more efficiently bundling and matching shipments with trucks, we’re reducing empty miles by 45%, which has eliminated more than 8 million pounds of carbon emissions just since 2019.”
Convoy said the industry average is to run 35% empty miles—but its technology has helped its customers reduce that to 19%. If the entire industry achieved similar efficiency gains, it would reduce CO2 emissions from empty miles from 87 million to 40 million metric tons.
“When we talk about making the truck driving profession more sustainable, that means helping carriers earn more and with less hassle,” Gavin explained. “We do that by making it easier for drivers to find, bid on and haul loads, which keeps them running full on their preferred lanes, so they’re spending less time chasing freight. Programs like the Convoy Fuel Card and QuickPay also help take some of the hassle out of drivers’ day to day experiences.”
In addition to Baillie Gifford and T. Rowe Price, Park West was a new investor in Convoy’s Series E fundraiser.