Digital freight broker Convoy raised $400 million in a new round of funding, giving the startup a valuation of $2.75 billion.
Generation Investment Management, a dedicated sustainability investment firm, and accounts advised by T. Rowe Price Associates, co-led the new round. Baillie Gifford, Fidelity Management and Research Co., Durable Capital Partners LP and Series C investors CapitalG and Lone Pine Capital also participated.
Convoy uses digital tools to match loads with motor carriers and truckers. One of its goals is to create efficiencies that reduce the number of miles trucks travel without cargo. The company claims the trucking industry has massive inefficiencies arising from fragmented and antiquated operations.
“In this new model, the pricing and matching of shipments to carriers happens automatically, and machine learning is used to evaluate all shipments and carriers simultaneously to match the right job to the right truck,” the company said in a statement.
CUTTING CARBON EMISSIONS
The potential to shave carbon dioxide emissions out of shipping attracted Generation Investment Management to the company.
“Through its use of data science, Convoy is driving the next evolution in efficiency across the industry. This is an exceptional opportunity to achieve a reduction in carbon emissions, while simultaneously increasing earnings for truck drivers and increasing service quality for shippers,” said Joy Tuffield, a partner at Generation Investment Management.
Convoy said the trucking industry generates over 72 metric tons of carbon emissions per year from empty trucks.
“We built this company from the beginning with a focus on creating a more efficient model for connecting shippers and truckers,” said Dan Lewis, Convoy co-founder and chief executive.
Lewis described trucking as a “zero-sum game, born from a marketplace where when one side wins the other side loses.”
Technology provides the opportunity to reduce the cost to shippers and slash empty miles traveled for truck drivers, he said.
Lewis said Convoy’s Automated Reloads feature, which uses machine learning to group full-truckload shipments for carriers, accounts for over 50 percent of matched loads in top markets.
Convoy counts Anheuser-Busch, Procter & Gamble, Wayfair, Land O’ Lakes and Unilever among its clients.
“At Anheuser-Busch, we are always looking for ways to streamline our workflows and deliver our products as quickly and efficiently as possible. Convoy has continued to deliver new and effective programs that have a meaningful impact on our business and the industry overall,” said Loren Foster, senior director of procurement for the beer company.