Two former Amazon (AMZN) employees are trying to transform the $700 billion trucking industry with a startup called Convoy, which uses technology to connect truck drivers with companies that need to move freight.
“What we do that’s different is that all of the truck drivers and small trucking companies that are working with Convoy use the Convoy app on their phone. That lets us know where they are so we can get them freight that’s relevant for what they want to run,” Convoy CEO Dan Lewis recently told Yahoo Finance’s “Market Movers.”
‘We give them tons of visibility and data’
Convoy uses its software to create efficient routes for truck drivers looking for shippers. Founded in April 2015, the company has grown from the Puget Sound area in Washington state to the broader Pacific Northwest and beyond. The trucking app now offers loads nationwide with more than 100,000 trucks and drivers on its network.
Convoy says it provides shippers like Home Depot (HD), Unilever (UN) and Anheuser-Busch (BUD) information about what happens when the trucks show up at their facilities. “We give them tons of visibility and data into what’s happening, so they can make better decisions and actually have a more successful experience working with trucks,” Lewis said.
Backed by A-list investors like Bill Gates and Jeff Bezos, the trucker app is valued at more than $1 billion after a recent funding round where the company raised $185 million through Alphabet’s CapitalG (GOOG, GOOGL). Lewis said the new capital is going to R&D to help “make it more efficient” for shippers and truck drivers to run their business.
“How do we now go further and build tools that make it really great for a small business to run their company? How does a small trucking company actually grow, add more trucks, you know, manage their paperwork?” the founder said. “How do we help shippers get information and data about what’s happening in their warehouses and facilities?”
Convoy’s other backers include Greylock Partners, Y Combinator, Salesforce (CRM) CEO Marc Benioff, Dropbox (DBX) CEO Drew Houston, Bezos Expeditions and former Starbucks (SBUX) president Howard Behar. Convoy has no plans to go public yet.
Trucking app faces lack of truckers
“We think there’s a lot of opportunity right now to just focus on building this company. There’s a long way to go to build a marketplace that really can change the way trucking is done,” Lewis said. “And if we do that successfully, we help shippers, we help truck drivers and trucking companies. We’re going to create massive value for our investors. So they’re really thinking about this for the long run.”
As Convoy continues to grow, the company faces some of the same challenges of its competitors, like a general shortage of truck drivers. Lewis is betting technology can help ease the problem.
“We need to make the industry more accessible and more desirable for people to start working in. So how do you make it easier for a truck driver to run a small business? Well, you give them technology that helps them get jobs,” he said. “How do you make it easier for them to get paid on time? Well, you give them technology that makes it so when they’re waiting at a facility, they can track that and get paid. So, you know, everything that we do is about making it more accessible and easier for truck drivers to run a business. That’s going to help us have more capacity in this country.”
Marina Pena is a production assistant for Yahoo Finance.