Former Employees Looking to Buy Convoy, Report Says
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Convoy, the Seattle-based freight startup that shut down last week, is being sold, according to a former Convoy employee familiar with the deal.
Details of the transaction have yet to be disclosed, but it is expected to be finalized soon, the former employee told The Seattle Times on Oct. 24.
The former employee, who asked to remain anonymous because the deal had yet to close, said the sale will involve a number of former Convoy employees, but didn’t specify the number involved in the new operation.
On Oct. 24, the Washington state Employment Security Department reported that Convoy was laying off 533 workers as a result of the closure, but it was not clear whether the potential sale will affect this number.
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Less than a week ago, the company announced it was canceling shipments, closing operations and laying off workers.
Convoy Inc. ranks No. 54 on the Transport Topics Top 100 list of the largest logistics companies in North America.
Convoy, a privately held firm that had won hundreds of millions of dollars in backing from tech players like Jeff Bezos and Bill Gates, appeared to have lost the confidence of some investors amid a slump in the freight business.
In a memo to employees last week, CEO Dan Lewis blamed the company’s sudden collapse in part on the broader industry downturn, which has cut demand for Convoy’s brokerage services.
Lewis, an Amazon veteran who launched Convoy in 2015 with Grant Goodale, also suggested that downturn undermined the interest of potential buyers of company.
In LinkedIn comments posted over the weekend, Lewis said that two potential deals to sell Convoy had gotten all the way to the “1/2 yard line” before falling apart.
“There was no lack of interest in how the tech and biz worked,” Lewis said in the post, first reported by GeekWire. But the recent slump in freight volumes had cut into industry revenues, which had resulted in “weakening [of potential] suitors.”
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Convoy had billed itself as a “digital freight network” that used sophisticated software to connect shippers directly to truckers and bypass the brokerage system that has traditionally handled much of the scheduling.
Convoy attracted major backing. By last year, it was valued at nearly $4 billion, according to GeekWire. The company’s LinkedIn page indicated it had nearly 800 employees.
But the company was hard-hit by the freight recession, which saw cargo volumes fall from their pandemic highs.
“You’re seeing a lot more competition in the space, which is crushing smaller companies,” Emily Nasseff Mitsch, an analyst at CFRA who covers trucking and rail, said last week.
