Trucking startup Convoy has raised more than $60 million in a series B funding round led by Silicon Valley startup accelerator Y Combinator. It is the first company Y Combinator has backed that was not part of its accelerator program.
Founded just two years ago, the Seattle-based company has now raised a total of $80.5 million over three rounds of financing. It is backed by some of the world’s leading disruptors, including the founders and CEOs of Amazon, Salesforce, eBay, Linkedin, Expedia, Dropbox, KKR, Starbucks, and others. In this latest round, they were joined by A-list investors like Bill Gates, Mosaic Ventures, former U.S. Senator Bill Bradley, and media mogul Barry Diller.
So how exactly does it work? Convoy is essentially an Uber for trucks. The app allows truck drivers to find loads and shippers to find empty trucks using an automated process dictated by algorithms, which also determine the price for each load.
The company says up to 10,000 trucking companies use the service, with thousands of truck shipments completed every week through the app. There are also more than 300 shipping customers signed up to the service, including Unilever and Anheuser-Busch.
"We are officially a broker today, but we are building something that hasn't existed before," Lewis said. "It doesn't look at 60 trucks, it looks at 60,000 trucks and can match loads using predictive analytics. That is a complete game changer in the business."
Convoy is one of several startups competing for a share of the $700 billion-a-year trucking industry. For example, Transfix raised $42 million in Series C funding earlier this month. In May, Uber also launched its own long-haul trucking app. Uber Freight matches truckers with companies who need cargo shipped across the country.
Connected truck services are expected to generate $5.4 billion in revenues in 2017, according to a report from Frost & Sullivan. The report explores a number of market trends and transformational shifts, including truck digitisation, autonomous technology, trucking apps and disruption from digital freight brokers.
Autonomous technology is not something Convoy are overlooking. Autonomous trucking technologies are expected to reduce driver-related accidents and driver stress while improving operational efficiency and enabling significant cost savings for fleet operators. But Lewis believes driverless trucks won't fully take over the roads for years or maybe even decades.
"I think it's a long ways out. There's a lot of cost efficiency to be gained before that," says Lewis.
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