Home Technology Flexport acquires expertise of former digital freight unicorn Convoy

Flexport acquires expertise of former digital freight unicorn Convoy

Flexport acquires expertise of former digital freight unicorn Convoy


Provide chain logistics platform Flexport is buying the property of shuttered digital freight community Convoy, in accordance with a memo Flexport CEO Ryan Peterson despatched to workers Wednesday.

Flexport will restore Convoy’s trucking logistics providers for patrons within the coming weeks, reads the memo, shared by Freight Waves. Peterson mentioned Flexport received’t purchase the enterprise or any of its liabilities, however does plan to retain “a small group of staff members from their core product and engineering staff.”

Convoy co-founder and CEO Dan Lewis is likely to be one of many staff members becoming a member of Flexport, reviews the Wall Road Journal, citing an individual conversant in the settlement. Lewis didn’t reply to TechCrunch to verify.

The phrases of the deal weren’t disclosed, however Peterson mentioned in his memo that “the acquisition value relative to worth is modest.” In April final yr, Convoy was valued at $3.8 billion after a $260 million Collection E spherical.

Flexport couldn’t be reached for remark.

Peterson additionally famous that Flexport’s bills “shall be restricted to what’s vital to keep up the tech.” When Peterson took again the CEO title in October after his successor was pushed out, the manager’s large message was about getting Flexport’s funds again so as. He had criticized former CEO Dave Clark for overspending on hiring and enlargement. Since stepping again into the CEO position, Peterson has overseen a plan of value reducing, together with shedding about 20% of its employees, or round 600 folks.

With that value reducing additionally comes a necessity for Flexport to claw its approach again to profitability, and providing a greater service is a method to try this.

“We made immediately’s acquisition not simply due to the unbelievable tech stack that Convoy constructed,” wrote Peterson. “We now have heard from our prospects that they need Flexport to be a one-stop store for all their logistics wants.”

Convoy’s buyer base could possibly be a boon to Flexport’s service, as nicely. The once-promising startup boasted greater than 400,000 truck drivers and 80,000 carriers in its community, and its tech stack contains “refined procurement expertise that absolutely automates the availability aspect for 98% of hundreds booked,” mentioned Peterson. He famous the tech might assist Flexport decrease service prices.

Peterson additionally laid out how Flexport will strategy the enterprise in another way than Convoy and different giant truck brokerages which have centered on scaling shortly by pursuing large Fortune 500 accounts. That sort of scale led to complexity and burn, says Peterson, which made it tough for Convoy to show a revenue. Convoy’s working place additionally was hit by the present freight recession.

Sooner or later, Flexport will provide a full vary of trucking providers to prospects, “together with FTL, LTL, drayage (ocean) trucking, cartage (airport) trucking, and ultimately intermodal (rail) trucking providers to prospects of our worldwide freight forwarding providers,” mentioned Peterson.


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