Trucking app Convoy raises $60m led by Silicon Valley’s Y Combinator

Convoy, an app connecting truck drivers with loads of freight, has raised more than $60 million as startup investors double down on technology bets to transform the long-haul trucking industry.

Convoy, a Seattle-based startup founded two years ago, is part of a growing field of companies using mobile apps and algorithms to try and connect shippers with trucks more efficiently. Venture capitalists and entrepreneurs have been looking for opportunities to grab a slice of the $700 billion-a-year trucking industry, which still relies heavily on call centers and fax machines.

The funding round was led by Y Combinator, a technology startup accelerator based in Silicon Valley, Convoy Chief Executive Officer Dan Lewis told Reuters in an interview. Convoy is the first company Y Combinator has backed that was not part of its accelerator program.

Lewis declined to disclose the company’s new valuation, saying only it was “a significant step up.” Its total fundraising to date is about $80 million.

From January to June this year, trucking tech startups raised $478 million, on pace to exceed last year’s $763 million in fundraising, according to data firm CB Insights.

Convoy is one of several startups aiming to unseat traditional trucking brokerages with new technology. Convoy’s app allows truck drivers to find loads and shippers to find empty trucks using an automated process dictated by algorithms, which also determine the price for each load.

Replacing call centers and paperwork with automation enables trucks to spend less time driving around empty in search of the next load. Prices are lower for shippers too, because the company does not rely on salespeople working on commission, Lewis said.

“We are officially a broker today, but we are building something that hasn’t existed before,” Lewis said. “It doesn’t look at 60 trucks, it looks at 60,000 trucks and can match loads using predictive analytics. That is a complete game changer in the business.”

Convoy, however, has an uphill battle to stake out a meaningful share of a highly fragmented market where traditional brokerages such as C.H. Robinson remain powerful. Also, Uber Technologies Inc’s entry into freight hauling may pose a threat to Convoy, as Uber’s deep pockets allow it to undercut competitors’ prices.

Convoy, which has about 120 employees, says thousands of truck shipments are completed every week through the app, although it declined to disclose revenue numbers. The company’s more than 300 shipping customers include Unilever and Anheuser-Busch, and some 10,000 trucking companies use the app.

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Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.