Convoy, a digital platform for making road transport more efficient, said it has raised an additional $260 million to develop its service as inflation and higher fuel prices put pressure on carriers and freight brokers to find more efficient ways. to transport goods.
The Seattle-based firm said the new funds include $160 million from a round led by Baillie Gifford and T. Rowe Price and $100 million in venture debt investments from Hercules Capital. Convoy also lined up a $150 million line of credit from JP Morgan. Excluding the line of credit, the company has raised $925 million to date and now has a valuation of $3.8 billion.
The new money “allows us to continue to fund the building of the technology platform, the launch of new products,” says Mark Okerstrom, president and COO of Convoy, Forbes. This includes recent offerings such as “Convoy for Brokers, where we essentially open access to our capacity platform, access to the 400,000 trucks, to traditional (freight) brokers”.
Convoy, like competing services including Uber Freight, are focused on upgrading US freight booking services that are traditionally relatively low-tech and not always able to deploy trucks in the most efficient way. Supply chain problems throughout 2021, a contributor to inflation, and the complications created by the Covid-19 pandemic appear to have made digital services like Convoy’s more critical in containing costs in the US trucking industry, which generates an estimated revenue of US$800 billion annually.
“The pandemic has highlighted the importance of road transport and how volatile and inefficient this sector can be,” said co-founder and CEO Dan Lewis in a statement. We know we can do better by using modern technology and algorithms to help orchestrate freight logistics, improve service, reduce waste and help drivers.”
Convoy’s platform, accessible via a smartphone app, uses machine learning to match carriers to loads and prevent trucks from traveling “empty miles” without loads. It currently has 400,000 trucks in its network.
Okerstrom said the privately held, seven-year-old company’s revenue is growing about 50% a year and is expected to reach $1 billion this year.
The company has not announced plans to go public, although the new funding it just raised “puts us on a very solid basis to consider this as an option in the future,” he said.