Convoy raises $62 million to add tech to trucking
Convoy, a Seattle-based network that connects trucking companies with freight shippers, has raised $62 million in Series B funding. Y Combinator's Continuity Fund led the round, with partners Anu Hariharan and Ali Rowghani joining the Convoy board of directors. Other backers include Bill Gates' Cascade Investments, Mosaic Ventures, Barry Diller and Greylock Partners.
Investment thesis: This is all about efficiency, in terms of reducing the amount of time that trucks drive empty (which Convoy CEO Dan Lewis estimates to be 40%). Decreasing such vacancies could become a major margin improvement tool for trucking companies, as they continue to wait for the advent of autonomous vehicles.
Flashback: On Friday we reported that YC Continuity is "now willing to selectively back companies that didn't participate in its accelerator program," adding that it already had one such unannounced transaction. Well, this is it. Anu Hariharan tells Kia that such deals will be rare and still come via the YC network even if not incubated within YC. As for why Convoy, she cited a large market opportunity born of the trucking industry's historic lack of innovation.
Bottom line: "The U.S. trucking industry, which exceeded $700 billion in 2015 with freight volume expected to grow another 3% in 2017, has traditionally used brokers to help facilitate transactions between trucking companies and shippers. But that process, from finding to matching to pricing jobs, is often done manually. Convoy is bringing automation to that workflow." – Taylor Soper, GeekWire