Seattle — As Bill Gates and Jeff Bezos jockey for the
designation of world’s wealthiest man, the Seattle billionaires are
united behind at least one local venture. They are both investors in a
trucking logistics start-up that competes with Uber.
Convoy, a two-year-old Seattle company, makes software that matches nearby and available truckers to a shipping job.
Convoy said on Tuesday that it raised a new round of funding from Bill Gates’s Cascade Investment and other backers. Gates joins Amazon.com’s Bezos, who invested earlier. The latest financing totals $62m.
The investment will not break the bank for Gates or Bezos, whose fortunes are within $3bn of each other, according to the Bloomberg Billionaires Index. But Convoy has become a hot start-up investment among fellow billionaires. Salesforce.com CEO Marc Benioff and KKR co-CEO Henry Kravis are also shareholders. IAC/InterActiveCorp chairperson Barry Diller participated in the new round with Gates.
Convoy was initially pitched as an "Uber for trucking" and has raised $80m in total since starting in 2015. But this year, Uber rolled out its own version of on-demand trucking. The service, called Uber Freight, connects truck drivers with long-haul assignments. There are other providers, such as Trucker Path, but Uber’s financial heft — having raised more than $15bn since its inception — makes it a force. That’s despite distractions posed by a lawsuit claiming a former Uber executive, who was working on autonomous trucking technology, conspired with the company to steal trade secrets from Alphabet’s Waymo. Uber denies wrongdoing.
Convoy CEO Dan Lewis said he hoped to take advantage of Uber’s distractions. "It isn’t clear what’s going to happen with Uber," Lewis said. "The leadership of the company in general is gone."
Uber said its two-month-old freight service had been greeted with enthusiasm. "We’ve learnt an incredible amount already and are continuing to recruit the top minds in the industry as we ramp up our investment in this technology," a spokesperson wrote in an e-mail.
Lewis said Convoy was fulfilling thousands of shipments and generating millions in sales a week. He said sales volume was doubling every quarter but declined to provide figures. Consumer giants Unilever and Anheuser-Busch InBev had signed on as customers.
The new funding was led by Y Combinator’s Continuity Fund. It’s the first time the Silicon Valley firm has invested in a company that was not incubated in its start-up programme. (Willett Advisors, the investment arm for the personal and philanthropic assets of Michael Bloomberg, the founder and majority owner of Bloomberg, invests in Y Combinator startups.) "The market opportunity is huge, and trucking is a space that has not had any innovation in two decades," said Anu Hariharan, a partner at the Y Combinator venture fund.
The US trucking market is worth about $800bn, and it is rife with inefficiency. Lewis said trucks are driving without cargo more than 30% of the time, often after returning from a drop-off. He positions his company as a way to cut costs and pollution, a proposition that has attracted not just marquee investors but also a number of competitors. Some have already become road kill.
The threat of automation is looming over the trucking industry, with predictions that self-driving 18-wheelers will replace the large workforce in the future. Hariharan said software to match trucks with jobs and track progress will be necessary, "regardless of who is driving the truck — man or machine".
Trucking, even the software-enabled variety, may seem like an antiquated industry for a tech leader like Gates, but the world’s richest man often leans towards investments in more traditional industries such as rail, rubbish and tractors. He iss the biggest single investor in Canadian National Railway Co and Deere & Co. A spokesperson for Gates’s investment firm said Convoy’s promises to reduce road congestion and help the environment were major drawcards.
Bloomberg
Convoy, a two-year-old Seattle company, makes software that matches nearby and available truckers to a shipping job.
Convoy said on Tuesday that it raised a new round of funding from Bill Gates’s Cascade Investment and other backers. Gates joins Amazon.com’s Bezos, who invested earlier. The latest financing totals $62m.
The investment will not break the bank for Gates or Bezos, whose fortunes are within $3bn of each other, according to the Bloomberg Billionaires Index. But Convoy has become a hot start-up investment among fellow billionaires. Salesforce.com CEO Marc Benioff and KKR co-CEO Henry Kravis are also shareholders. IAC/InterActiveCorp chairperson Barry Diller participated in the new round with Gates.
Convoy was initially pitched as an "Uber for trucking" and has raised $80m in total since starting in 2015. But this year, Uber rolled out its own version of on-demand trucking. The service, called Uber Freight, connects truck drivers with long-haul assignments. There are other providers, such as Trucker Path, but Uber’s financial heft — having raised more than $15bn since its inception — makes it a force. That’s despite distractions posed by a lawsuit claiming a former Uber executive, who was working on autonomous trucking technology, conspired with the company to steal trade secrets from Alphabet’s Waymo. Uber denies wrongdoing.
Convoy CEO Dan Lewis said he hoped to take advantage of Uber’s distractions. "It isn’t clear what’s going to happen with Uber," Lewis said. "The leadership of the company in general is gone."
Uber said its two-month-old freight service had been greeted with enthusiasm. "We’ve learnt an incredible amount already and are continuing to recruit the top minds in the industry as we ramp up our investment in this technology," a spokesperson wrote in an e-mail.
Lewis said Convoy was fulfilling thousands of shipments and generating millions in sales a week. He said sales volume was doubling every quarter but declined to provide figures. Consumer giants Unilever and Anheuser-Busch InBev had signed on as customers.
The new funding was led by Y Combinator’s Continuity Fund. It’s the first time the Silicon Valley firm has invested in a company that was not incubated in its start-up programme. (Willett Advisors, the investment arm for the personal and philanthropic assets of Michael Bloomberg, the founder and majority owner of Bloomberg, invests in Y Combinator startups.) "The market opportunity is huge, and trucking is a space that has not had any innovation in two decades," said Anu Hariharan, a partner at the Y Combinator venture fund.
The US trucking market is worth about $800bn, and it is rife with inefficiency. Lewis said trucks are driving without cargo more than 30% of the time, often after returning from a drop-off. He positions his company as a way to cut costs and pollution, a proposition that has attracted not just marquee investors but also a number of competitors. Some have already become road kill.
The threat of automation is looming over the trucking industry, with predictions that self-driving 18-wheelers will replace the large workforce in the future. Hariharan said software to match trucks with jobs and track progress will be necessary, "regardless of who is driving the truck — man or machine".
Trucking, even the software-enabled variety, may seem like an antiquated industry for a tech leader like Gates, but the world’s richest man often leans towards investments in more traditional industries such as rail, rubbish and tractors. He iss the biggest single investor in Canadian National Railway Co and Deere & Co. A spokesperson for Gates’s investment firm said Convoy’s promises to reduce road congestion and help the environment were major drawcards.
Bloomberg
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