In its prime, the Seattle-based freight network company Convoy was one of tech’s esteemed startup success stories.
Two Amazon veterans set off on their own in 2015 to build a platform that would connect shippers with carriers who had extra, unfilled space on their tractor trailers—making supply chains more efficient and reducing emissions. Flush with more than $1 billion in equity funding and debt it had accumulated over the years from some of the tech industry’s most prominent investors, entrepreneurs, climate activists, and lenders, Convoy had at one point hired 1,300 employees and built out a network of more than 400,000 trucks across the country.
By 2022, Convoy had started to dabble in a wide array of business lines outside its initial purview: a fintech offering for quick payments; a fuel card for discounts on diesel; a trailer-rental service. By the end of that year, Convoy’s gross margin had grown to a respectable 18%, according to a document seen by Fortune.
But its hefty fixed expenses, including steep engineering and product team costs and an expensive lease in Seattle, were weighing down its financials, according to someone close to the company. Those expenses kept Convoy from turning a net profit.
Three years ago, that may not have been a problem. But the market had turned. Last October, Convoy became one of many casualties of a painful reset within the private markets. Just 18 months away from a fresh $410 million cash infusion from a Series E round and line of credit, Convoy suddenly laid off nearly everyone on its staff, shut down its core business, and, shortly after, raffled off its technology platform to another freight startup. In a memo to employees that was obtained by GeekWire, its CEO, Dan Lewis, said Convoy had hit a “perfect storm”: a collapse in the freight market, paired with a “dramatic monetary tightening” that “dampened investment appetite and shrunk flows into unprofitable late stage
