- Convoy, the first nationwide digital freight network, announced it raised $400 million in Series D funding at a valuation of $2.75 billion. These are the details.
Convoy — the first nationwide digital freight network — announced it raised $400 million in Series D funding. With this round of funding, the company plans to help eliminate hundreds of billions of dollars of waste in the trucking industry. This round of funding values Convoy at $2.75 billion.
Generation Investment Management and funds and accounts advised by T. Rowe Price Associates co-led the new round with participation from Baillie Gifford, Fidelity Management and Research Co., Durable Capital Partners LP, CapitalG, and Lone Pine Capital. Including this round of funding, Convoy has raised over $668 million.
Some of Convoy’s other investors include Greylock Partners, Y Combinator, Cascade Investment (the private investment vehicle of Bill Gates), Salesforce.com CEO Marc Benioff, Code.org founders Hadi Partovi and Ali Partovi, U2’s Bono and The Edge, Jeff Bezos via Bezos Expeditions, eBay founder Pierre Omidyar via Omidyar Technology Ventures, KKR CEO Henry Kravis, Dropbox CEO Drew Houston, former Starbucks President Howard Behar, Barry Diller, Kevin Systrom, former U.S. Senator Bill Bradley, and several other angel investors.
Convoy’s digital freight network moves tens of thousands of truckloads per week in the U.S. And with this new model, the pricing and matching of shipments to carriers happen automatically. With machine learning, all shipments and carriers are evaluated simultaneously to match the right job to the right truck.
“We built this company from the beginning with a focus on creating a more efficient model for connecting shippers and truckers,” said Dan Lewis, Convoy co-founder and CEO. “Trucking has historically been a zero-sum game, born from a marketplace where when one side wins the other side loses. The magic of applying technology to this decades-old industry is that we can create a true win-win for both sides, lowering the total cost to shippers with better service, while removing the hassle of wasted time and miles for truck drivers, allowing them to earn more. Building a more efficient digital freight network also means we can dramatically reduce carbon emissions associated with empty miles, which is good for the planet.”
With this round of funding, it accelerates Convoy’s efforts to eliminate the inefficiencies that remain in the trucking industry thus leading to lower costs and improved quality for shippers, increased earnings, and respect for the millions of truck drivers on the road. Plus it eliminates excess pollution from miles driven without cargo.
“Generation’s investment in Convoy is grounded in many years of research into the future of logistics,” added Joy Moussavian Tuffield, partner at Generation Investment Management. “Through its use of data science, Convoy is driving the next evolution in efficiency across the industry. This is an exceptional opportunity to achieve a reduction in carbon emissions, while simultaneously increasing earnings for truck drivers and increasing service quality for shippers.”
The trucking industry is notorious for inefficiencies due to decades of fragmentation and antiquated operations thus resulting in hundreds of billions of dollars of waste. Convoy’s machine learning and automation technology create a flywheel that drives efficiency for both shippers and carriers thus resulting in a dramatically lower cost structure.
And Convoy has led the industry with its first-to-market innovations, including being the only company to automate 100% of the process of matching loads to trucks in top markets. Plus Convoy’s Automated Reloads feature — which uses machine learning to group full-truckload shipments for carriers, accounts for more than 50% of matched loads in top markets and is already seeing a 45% decrease in carbon dioxide emissions from trucks running empty less often. The Convoy Go product offers to drop trailer shipments to millions of drivers across the nation supported by a large and expanding Convoy trailer pool giving carriers access to billions of dollars in new shipments and allow them to complete twice as many jobs per week.
“Our partnership with Convoy has helped P&G reduce costs and improve service by looking at transportation differently. We value Convoy’s commitment to transparency, innovation, and sustainability, underpinned by a culture of operational excellence,” explained Andy Butler, Associate Director of North America Market Operations Purchases at The Procter & Gamble Company.
In Convoy’s first four years of operations, the company has become a trusted partner to some of the largest shippers in the world, including Anheuser-Busch, The Procter & Gamble Company, Wayfair, CHEP, Land O’ Lakes, Niagara, Ardagh, Waiākea, and Unilever. With the automation features, it lowers the total cost to shippers while providing advanced analytics to improve the efficiency of their supply chain.
“At Anheuser-Busch, we are always looking for ways to streamline our workflows and deliver our products as quickly and efficiently as possible. Convoy has continued to deliver new and effective programs that have a meaningful impact on our business and the industry overall,” commented Loren Foster, Sr. Director Procurement for Anheuser-Busch.
Convoy is also working to improve the lives of the 3 million truck drivers who keep our nation moving. As professionals who have a passion for their work, the typical trucker’s day is often filled with time waiting for appointments, completing paperwork and scheduling. And when they are forced to drive with empty trailers to find loads, the cost of simultaneously running their trucks while not generating an income makes it difficult to earn a living. Convoy’s digital freight network addresses these daily hassles and empowers truckers to earn more with first to market innovations such as free QuickPay with no fees, one-click automatic detention requests, load requests, and instant bidding. And through this work, Convoy has earned the highest rated app experience in the Industry.
“Convoy makes it easy to keep my drivers full. Whether we are booking multiple back-to-back jobs or adding an automatic reload to an existing shipment, the app efficiently bundles our shipments to keep deadhead miles to a minimum,” stated Guri Bhathal, a dispatcher for National Transportation Services.
The EPA has reported heavy-duty full truckload freight account for over 205 million metric tons of carbon dioxide emissions per year — which is 13% of total vehicle emissions in the country. And the manual process of matching trucks to loads hasn’t seen material innovation in decades. This inefficiency has resulted in 72 million metric tons of carbon dioxide-equivalent emissions (or 7 billion gallons of wasted diesel) from trucks driving to or from jobs without cargo.
Convoy’s founding mission is to reduce this “empty mile” waste. And Convoy’s technology is already reducing carbon emissions by enhancing the ability to connect shipments more effectively. Convoy’s Automated Reload program reduces empty miles from the industry standard of 35% to 19% by bundling the shipments.
If the industry were to achieve the same efficiency, it would lower carbon dioxide emissions by 32 million metric tons, which is equivalent to taking 6.9 million passenger vehicles off the roads for a year.
Currently, 74% of S&P 500 companies have corporate environmental impact goals specific to sustainability and carbon reduction. With the goal of reducing waste, Convoy has become a key partner with companies like Waiākea, CHEP, and Anheuser-Busch in achieving their sustainability targets.
“Convoy’s mission aligns with our corporate goals focused on sustainability, namely a Zero Waste World,” pointed out Scott A. Roberts, Vice President of Logistics at CHEP North America. “By collectively addressing the challenge of empty miles within the industry we are not only streamlining our business but are contributing to a more sustainable world. We are excited to partner with Convoy on this initiative.”
