Convoy, a digital platform to make trucking more efficient, said it’s raised an additional $260 million to build out its service as inflation and higher fuel prices push shippers and freight brokers to find more efficient ways to move goods.
The Seattle-based company said the new funds include $160 million from a round led by Baillie Gifford and T. Rowe Price and $100 million in venture-debt investment from Hercules Capital. Convoy also lined up a $150 million line of credit from J.P. Morgan. Excluding the credit line, it’s raised $925 million to date and now has a $3.8 billion valuation.
The new money “allows us to just continue to fund the building out of the technology platform, launching of new products,” Mark Okerstrom, Convoy’s president and COO, tells Forbes. These include recent offerings such as “Convoy for Brokers where we’ve opened up essentially 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 updating U.S. freight-booking services that traditionally have been relatively low tech and not always able to deploy trucks in the most efficient ways. Supply chain snags throughout 2021, a contributor to inflation, and complications created by the Covid-19 pandemic appear to have made digital services like Convoy’s more critical to holding down costs for the U.S. trucking industry, which generates an estimated $800 billion of revenue annually.
“The pandemic highlighted how important trucking is and how volatile and inefficient this industry can be,” cofounder and CEO Dan Lewis said in a statement.” We know that 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 driving “empty miles” with no loads. It currently has 400,000 trucks in its network.
Okerstrom said revenue for the closely held, seven-year-old company is growing about 50% annually and should top $1 billion this year.
The company hasn’t announced plans to go public though the new funding it’s just raised “puts us on very solid footing to consider that as an option in the future,” he said.