When it comes to raising venture capital, the entrepreneurs behind Convoy have been riding in the fast lane.
Last month, the Seattle-based on-demand trucking company announced it had raised $62 million in venture capital. But it wasn’t just the amount that turned heads. It was the investors, who included Microsoft co-founder Bill Gates. The round was led by Y Combinator’s Continuity Fund, the first such investment it has made in a company that did not go through its famed Silicon Valley start-up incubator program.
Surprising, but not totally shocking. Convoy had already demonstrated it could persuade Silicon Valley to get behind a trucking revolution by raising $18.5 million in two previous funding rounds. One was led by top-tier Silicon Valley VC firm Greylock Partners.
Other investors include Amazon founder Jeff Bezos, Salesforce.com founder Marc Benioff, Dropbox co-founder Drew Houston and Instagram co-founder Kevin Systrom. It probably helps that Convoy’s app, which connects shippers with truckers, was designed by people with backgrounds at Amazon, Google, Microsoft and Uber.
Still, we were curious about the obstacles to raising venture capital for the trucking industry and how Convoy and overcome them. Trucks.com posed several questions to Grant Goodale, Convoy's chief technology officer.
How challenging was it to get investors to consider a start-up in the trucking space?
Everyone can relate to things being moved around the world. The U.S. spends $800 billion on trucking freight every year, but the industry still uses manual processes, which slows down logistics and operations and makes them prone to human error. There’s room for disruption and transformation. And we believe people see the value Convoy can bring with technology to help evolve and improve the whole system.
There is also an incredible opportunity to impact people’s lives in trucking — truck driver is the most common job in 29 U.S. states. Our vision is to help those truck drivers and shipping customers improve their lives and their businesses and ultimately help reduce the 40 percent of trucks driving empty on the road. The financial, environmental and social impact is massive, and that potential impact is the kind of thing that attracts people that are looking to do world-changing things. That’s why we have a great team of notable investors backing us.
What criteria did the company use in terms of selecting and working with various investors?
It was really about prioritizing the right relationships and the right introductions at the right time. We wanted to maximize our option value — from recruiting the best talent to fostering new relationships with strategic partners.
We also focused on selecting backers who share our values and philosophy as a company. [LinkedIn co-founder and Greylock Partner] Reid Hoffman, [Greylock Partner] Simon Rothman, [Code.org co-founders] Hadi and Ali Partovi, and other early investors and board members have tremendous networks and have played a big part in the success and scale of start-ups around the world.
We’re fortunate to have them as trusted advisors; their investment and insights will continue to help us bring innovation to trucking — and the broader ecosystem — for the long haul.
Was there anything that was surprising that the founders learned regarding the challenges or opportunities for raising VC for a trucking tech start-up?
There are a number of companies tackling this space. Early on, we learned that what sets Convoy apart to investors is our amazing team of people. We have such a strong vision of where this can go, both for the shippers — some of the largest in the world who are now Convoy customers — but also for the truckers, whose lives we are improving.
Goodale has made a hiring pitch for his company, saying that people who join Convoy are “literally moving the world forward.” Openings can be found on the jobs page at convoy.com.