Convoy Inc., a Seattle-based trucking startup whose investors include Jeff Bezos and Bill Gates, is closing down its business after a four-month search for an acquirer failed, its founder and Chief Executive Officer Dan Lewis told employees in memo Thursday informing them, “Today is your last day at the company.”
“Following an exhaustive process, spanning many, many months during which we explored all viable strategic options for the business, the result is where we are today,” Lewis wrote. “Convoy is closing the doors on its current core business operations and exploring and evaluating strategic options for what might come next.”
The startup, valued by investors last year at $3.8 billion, had already whittled its staff down to about 500 people from a peak of 1,500, and was on track to run out of money in a matter of weeks, said people familiar with the matter. Most remaining employees were let go Thursday. Lewis said the market conditions afflicting Convoy — “a massive freight recession and a contraction in the capital markets” — also prevented its most likely acquirer from closing a deal.
Convoy had raised more than $1 billion from investors, according to data from research firm PitchBook.
Many of those investors could see their stakes go to zero. However, it’s a grand slam for Allen & Co., according to PitchBook data. The New York-based investment bank wrote a small check to the startup in 2015, when Convoy was worth less than $60 million, along with more than two dozen angel investors including Bezos, Reid Hoffman and Marc Benioff. Gates invested in a later round. Capital G, an Alphabet Inc. venture group and Al Gore’s Generation Investment Management were also investors in Convoy, according to PitchBook.
Allen & Co. sold all its shares last year, according to the data, at the same time that Baillie Gifford, T. Rowe Price and other investors valued Convoy at $3.8 billion in a new funding round. Representatives for Allen & Co. did not comment on the transaction.
Convoy is one of many logistics startups affected by falling prices and demand for shipping, plus a deteriorating market for venture capital fundraising. San Francisco freight-forwarding company Flexport Inc. and Seattle warehousing startup Flexe Inc. have had to lay off workers after demand dropped from pandemic highs.
