Convoy trucking startup - hailed as 'Uber for freight' and backed by Bill Gates and Jeff Bezos - shutters due to 'massive freight recession'
- Trucking startup Convoy shuttered core business operations on Thursday
- Seattle-based company was founded in 2017 with backing from Bezos and Gates
- CEO cited a huge drop in shipping demand, and pullback in venture funding
Convoy, the trucking startup once hailed as 'Uber for freight' and valued as high as $3.8 billion, has shuttered operations due to a sharp decline in demand for shipping.
'Today is your last day at the company,' CEO Dan Lewis said in a memo on Thursday to the roughly 500 employees who remained at the company after several rounds of layoffs.
'In short, we are in the middle of a massive freight recession and a contraction in the capital markets,' he added. 'It was the perfect storm.'
It comes two months after 99-year-old trucking giant Yellow ceased operations and filed for bankruptcy, after it was crushed by debt and plunging demand for shipping.
The freight industry is still feeling the lingering impact of the pandemic, which three years ago sent shipping prices soaring as demand for goods delivery skyrocketed, prompting many carriers to rapidly expand operations.
But as consumer trends have returned to normal, newly expanded shipping capacity has far outstripped demand, sending freight prices plunging to rock bottom.
!['Today is your last day at the company,' Convoy CEO Dan Lewis said in a memo on Thursday announcing the trucking startup is shuttering core operations](https://i.dailymail.co.uk/1s/2023/10/20/15/76802473-12653703-image-a-11_1697811770486.jpg)
'Today is your last day at the company,' Convoy CEO Dan Lewis said in a memo on Thursday announcing the trucking startup is shuttering core operations
![Convoy, the trucking startup once hailed as 'Uber for freight' and valued as high as $3.8 billion, has shuttered operations due to a sharp decline in demand for shipping](https://i.dailymail.co.uk/1s/2023/10/20/15/76802477-12653703-image-a-10_1697811765447.jpg)
Convoy, the trucking startup once hailed as 'Uber for freight' and valued as high as $3.8 billion, has shuttered operations due to a sharp decline in demand for shipping
Lewis in his memo called it an 'unprecedented freight market collapse'.
Headquartered in Seattle, Convoy was co-founded by Lewis and Grant Goodale in 2017, and promised to revolutionize shipping with a digital freight network that would increase efficiency.
The venture included big-name investors including Bill Gates, Jeff Bezos, Barry Diller and Marc Benioff, among others.
Convoy also attracted major Fortune 500 clients, including The Home Depot, P&G, Niagara, and Unilever.
At its peak, Convoy had about 1,500 employees, and was valued at $3.8 billion in a funding round about 18 months ago.
But as shipping prices plunged, Convoy was unable to raise new capital, or find a buyer, after higher interest rates dealt a severe blow to the markets for venture capital and M&A.
'Alongside this unprecedented freight market collapse, the dramatic monetary tightening we've seen over the last 18 months has dramatically dampened investment appetite and shrunk flows into unprofitable late stage private companies,' Lewis said in the memo.
He added that 'M&A activity has shrunk substantially and most of logical strategic acquirers of Convoy are also suffering from the freight market collapse, making the deal doing that much harder.'
![Headquartered in Seattle, Convoy was co-founded by Lewis and Grant Goodale in 2017, and promised to revolutionize shipping with a digital freight network](https://i.dailymail.co.uk/1s/2023/10/20/15/76804429-12653703-image-a-14_1697812014179.jpg)
Headquartered in Seattle, Convoy was co-founded by Lewis and Grant Goodale in 2017, and promised to revolutionize shipping with a digital freight network
![As consumer trends have fallen back into normal patterns after the pandemic, newly expanded shipping capacity has far outstripped demand, sending freight prices plunging](https://i.dailymail.co.uk/1s/2023/10/20/15/76802483-12653703-image-m-13_1697811824012.jpg)
As consumer trends have fallen back into normal patterns after the pandemic, newly expanded shipping capacity has far outstripped demand, sending freight prices plunging
Lewis said that the company had spent four months seeking a buyer or other strategic options that would allow it to continue, but failed to find a solution.
'We moved all business levers possible. But we were running up the down escalator…. and it kept speeding up,' he wrote.
Employee stock options in the company, as well as the millions of shares held by venture capital investors, will now be essentially worthless.
New York-based investment bank Allen & Co. injected a small investment into the startup during an angel round in 2015, when Convoy was worth less than $60 million.
Allen & Co. still has its shares, according to a person familiar with the matter cited by Bloomberg.