Convoy Inc., a Seattle-based trucking startup with investments from Jeff Bezos and Bill Gates, is set to reduce its workforce by hundreds as it aims to attract potential buyers, according to sources familiar with the matter.
Once a prominent startup, often compared to the “Uber for trucking,” Convoy has downsized its staff from a peak of 1,500 employees to about 500. The company was on the brink of running out of funds within weeks. To make itself more appealing to prospective acquirers, most likely established companies in the trucking industry it sought to disrupt, a majority of the remaining employees will be let go.
While other potential buyers such as Walmart Inc. and A.P. Moller-Maersk A/S have been less active in negotiations, they have also shown interest, sources say. The decision to let go of employees and seek potential buyers aims to salvage the struggling startup.
Convoy raised over $1 billion and achieved a valuation as high as $3.8 billion in 2022, demonstrating the strong support it once enjoyed. However, as industry competitors modernized and the pandemic took a toll on trucking rates and volumes, Convoy faced significant challenges, leading to its current situation.
Convoy’s innovative vision aimed to bring advanced software solutions to the trucking industry, replacing the traditional reliance on phone calls, paperwork, and spreadsheets. By using Uber-like technology to connect drivers with loads and track deliveries, the startup initially held promise. However, the changing industry landscape and the impact of the pandemic contributed to the decline in Convoy’s revenue.
With Convoy’s efforts to secure a buyer or additional financing proving unsuccessful due to market conditions, layoffs have become a necessary step for the company. Convoy’s sales team recently alarmed customers by announcing that no new orders could be accepted, and existing orders scheduled for pickup within the next three days should be canceled.
Convoy’s future plans and strategies will be clarified in the coming days as the company goes through a transition. Maersk and Walmart, among others, declined to comment, while Gates and Bezos did not respond to requests for statements.
