Convoy, Backed by Gates and Bezos, Shuts Down Operations Amid Freight Recession

Convoy, a digital freight booking company based in Seattle and backed by billionaires Bill Gates and Jeff Bezos, has announced that it will be shutting down its operations. The company failed to find a buyer amidst what is being described as a “massive freight recession.”

According to Bloomberg, Convoy’s CEO, Dan Lewis, stated that the “massive freight recession” may have contributed to the company’s failure to be acquired. In an internal memo sent to employees, Lewis informed them that “today is your last day at the company,” and mentioned that Convoy is now in the process of exploring strategic options for the future.

Lewis explained that the company had evaluated potential suitors for acquisition but none of the options materialized into anything sufficient to sustain the company in its current form. He further highlighted that Convoy was facing both a significant freight recession and a contraction in the capital markets, which ultimately hindered the company’s progress and likely deterred potential suitors from acquiring the firm.

While specifics regarding the shutdown have not been disclosed, FreightWaves reported that some Convoy employees have indicated that they were not offered severance packages. However, employee benefits will be available through the end of the month.

As of April 2022, Convoy’s estimated valuation stood at $3.8 billion. The company had raised $925 million in investment. Convoy, founded in 2015 by former Amazon executive Dan Lewis, aimed to connect truck drivers with freight companies through its online platform, with the goal of reducing empty miles traveled by trucks.

Investors in Convoy included Bill Gates, Jeff Bezos, Al Gore’s Generation Investment Management, Scottish investment firm Baillie Gifford, and T. Rowe Price, among others.

The decision to shut down Convoy follows an announcement that the company had canceled all shipments. It had been exploring a potential sale since August, with possible suitors including Walmart, Amazon, and Maersk.

The freight industry as a whole has been affected by decreased demand for shipping. Bloomberg reported that San Francisco-based Flexport, another freight company, announced earlier this week that it would be reducing its staff by 20%.

Convoy’s closure highlights the challenges faced by digital freight companies in the current economic climate. Despite the backing from prominent investors, the company was unable to navigate the economic downturn and find a buyer to sustain its operations.