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Convoy, the company behind a digital freight network and marketplace that connects shippers to truckers, raised $260m in funding, making up a Series E round of $160m and $100m dollars in venture capital debt.
Founded in Seattle in 2015, Convoy works with companies like Unilever, The Home Depot and LG Electronics, to improve their freight transportation efficiency, reduce costs and improve carbon emissions.
The problem Convoy is trying to solve in freight is similar to what companies like Uber are trying to solve in urban transit: it’s ultimately about matching supply to demand. , using technology. In fact, Uber itself offers a similar service called Uber Freight, which repurposes its technology infrastructure to support business logistics.
Convoy’s latest increase comes at a time when the United States and around the world are grappling with numerous supply chain bottlenecks, one of which is a shortage of truckers. Convoy helps solve this problem by optimizing and streamlining freight loads and ensuring trucks don’t travel long distances with empty trailers.
“Transporting goods by truck is the foundation of our national supply chain – when supply chains are unreliable, companies spend more money and lose valuable time,” said the co-founder and CEO of Convoy, Dan Lewis, at VentureBeat. “As an industry, we need to focus less on trailer or driver shortages and more on how we do more with what we have. The real priority is to ensure that competent carriers and drivers operate efficiently, get paid promptly for the work they do, and feel valued in their profession.
Slow to adapt
Similar to other industries such as construction, the freight sector has historically been slow to adopt technology and has not been as quick to embrace digitalization as some industries have been – and this is where Convoy and his ilk enter the fray.
Additionally, Convoy’s mission may have been made a little easier over the past couple of years, as companies from all walks of life have sought to counter the effects of the global pandemic through digital transformation – in many ways, companies were compelled to explore new ways to improve their bottom line. And automation plays a fundamental role in all of this, with Convoy specifically leveraging machine learning intelligence to match freight loads with trucks with almost no human intervention.
“Historically, the freight industry has underinvested in technology and as a result, management teams have struggled over the past two years with an increase in firefights,” Lewis explained. “Technology is the only way to achieve efficiency and adapt flexibly to demand. Machine learning and automation have revolutionized elastic capacity for freight, where carriers can operate efficiently regardless of market conditions. »
Previously, Convoy raised approximately $670 million in funding, including a $400 million tranche more than two years ago, and with this cash injection, the company said it plans to invest heavily in the reinforcement of its team as a first step, including the hiring of engineers. , data scientists and logistics experts.
“Overview, we remain focused on our mission to ‘carry the world with infinite capacity and zero waste,'” Lewis added. “This increase allows Convoy to continue to directly process billions of dollars of waste in the trucking industry, accelerating our development of advanced products and technologies, expanding our trucking market and our offerings for carriers and shippers. across the United States”
Convoy’s Series E round was led by Baillie Gifford and T. Rowe Price, the venture debt element from Hercules Capital – and he said he secured an additional $150m line of credit from JP Morgan. The company is now valued at $3.8 billion, which is an increase of more than $1 billion from its Series D valuation in 2019.
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