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 Petersen despatched to employees Wednesday.

Flexport will restore Convoy’s trucking logistics companies for patrons within the coming weeks, in accordance with the memo, shared by Freight Waves. Petersen 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, stories the Wall Avenue Journal, citing an individual acquainted with the settlement. Lewis didn’t reply to TechCrunch to verify.

The phrases of the deal weren’t disclosed, however Petersen mentioned in his memo that “the acquisition worth relative to worth is modest.” In April final 12 months, Convoy was valued at $3.8 billion after a $260 million Collection E spherical.

Flexport couldn’t be reached for remark.

Petersen additionally famous that Flexport’s bills “will probably be restricted to what’s needed to keep up the tech.” When Petersen took again the CEO title in October after his successor was pushed out, the chief’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 function, Petersen has overseen a plan of price reducing, together with shedding about 20% of its staff, or round 600 folks.

With that price reducing additionally comes a necessity for Flexport to claw its means again to profitability, and providing a greater service is a technique to try this.

“We made right this moment’s acquisition not simply due to the unbelievable tech stack that Convoy constructed,” wrote Petersen. “We’ve 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 effectively. 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 totally automates the provision aspect for 98% of hundreds booked,” mentioned Petersen. He famous the tech may assist Flexport decrease service prices.

Petersen additionally laid out how Flexport will strategy the enterprise in a different 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 Petersen, 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 supply a full vary of trucking companies to prospects, “together with FTL, LTL, drayage (ocean) trucking, cartage (airport) trucking, and ultimately intermodal (rail) trucking companies to prospects of our worldwide freight forwarding companies,” mentioned Petersen.



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