Seattle-based trucking startup Convoy is shutting down after failing to find an acquirer.
CEO Dan Lewis told employees in a memo that “a massive freight recession and a contraction in the capital markets” resulted in the company’s failure.
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The remaining employees received no severance and were informed their stock options were now worthless, GeekWire reported.
The company was valued at $3.8bn only 18 months ago and was backed by the likes of Bill Gates, Jeff Bezos and Salesforce CEO Mark Benioff.
In 2018, Convoy raised $185m in a funding round led by CapitalG at a $1bn valuation. In 2019, the company raised $400m in a round led by Generation Investment Management and T Rowe Price.
A worsening venture capital climate and falling prices are beginning to hit logistics startups as the freight industry slows down.
Digital freight forwarder Flexport slashed its workforce by 20% earlier this week and warehouse startup Flexe laid off 33% of its staff in September.
The pandemic revealed multiple inefficiencies in supply chains that logistics startups then rushed to solve.
Venture capitalists have invested almost $7bn into the supply chain technology sector since 2018, according to data from analytics firm GlobalData. Of that, $2.46bn was raised by the sector between 2020 and 2021. However, that’s still down from the peak of 2019 when 240 deals injected $2.99bn into the sector.
