The giant funding infusion also gives Convoy a bigger warchest as some tech startups begin to cut jobs to conserve cash while venture capitalists slow their dealmaking velocity, as reported by The Information this week. In the current funding scenario, with a sharp focus on profitability, this can become a challenge in raising future funds. This suggests that organizations already in attractive markets should keep investing to stay ahead of the pack. Since we structure SaaS loans based primarily on revenue growth and the available amount of capital is driven off of multiples of MRR or ARR, the total borrowable funds can increase as revenue grows or key metrics improve. Convoy is one of a handful of Seattle startups valued at more than $1 billion, or unicorns.. PRINCETON, N.J., February 28, 2023--Enterra Solutions, LLC, a leader in autonomous value chain optimization and decision-making solutions, today announced that the Enterra Revenue Growth . Convoy Global Holdings, a Hong Kong Stock Exchange-listed financial advisory business which mainly looks after local Hong Kong residents, has paid 24m (US$30.2m, 27.8m) to acquire a stake in the UK-based Nutmeg investment platform, as part of an ongoing evolution of its business model. Convoy QuickPay, which gets payment to drivers in 48 hours. Approximately half of the total growth by companies in our sample came from geographies outside their home regionsan aggregate number fueled by Japanese and European companies that relied on international markets to compensate for slow growth at home. Founders (and former Amazon. On the other hand, when a European grocer that struggled in its home market expanded aggressively into Latin America, its TSR trailed that of its peers by seven percentage points per annum over the subsequent decade. Other startups, like Los Angeles-based NEXT Trucking, are focused on modernizing freight hauling out of major ports, which can be even more complex operating environments. Improved employee experience leads to improved customer experience. Take the telecommunications services industry, which grew at 1.6 percent Convoy, the digital freight network that connects truckers with shippers, has raised $400 million in a Series D funding round as it aims to scale its business amid an increasingly competitive. Generation Investment Management, a London-based fund co-founded by former vice president Al Gore, led the Series D round. Discounts of up to $100 per Goodyear tire & No Occurrence Fee Roadside Assistance ; How do I create a saved search? Convoy, founded in 2015, connects freight shippers and carriers. Owned the product roadmap for the pricing tool responsible for over 70% of Convoy's top-of-funnel demand and over $600MM of . Investors are bullish about Convoys digital platform that facilitates transactions between trucking companies and shippers, despite some headwind in the form of a recent trucking recession and fierce competition from Uber Freight, which is doubling down on its own on-demand marketplace. Therefore, finding a way to unlock growth in the core needs to be a top priority. Those reports reflect different assumptions, views and analytical methods of the analysts who prepared them and Sacra is under no obligation to ensure that such other reports are brought to the attention of any recipient of this report. This makes it difficult for shippers to find carriers directly, and they rely on 17,000+ brokers to match loads with carriers who charge 15% to 20% per transaction. Convoy's annual revenues are $100-$500 million (see exact revenue data) and has 500-1,000 employees. Those with slow-growing cores, on the other hand, can use adjacent businesses to offset slow growth elsewhere. Corporate growth slowed dramatically after the global financial crisis, with the worlds largest companies growing at half the rate they did before 2008. The Information Technology and Communication Services sectors were the largest contributors to the 16.2% revenue growth rate for S&P 500 companies with more than 50% international revenue exposure. Convoy makes money by taking a cut from the transaction between the shipper and the trucking company. All rights reserved. Today truck brokerages and large carriers have pretty significant teams of people whose job is to call around and find a truck, typically relying on a list of a hundred or so drivers theyre familiar with, Lewis, 38, tells Forbes. Healthy growth has also been hard to sustain. Convoys primary verticals are consumer-packaged goods; food and beverage; manufacturing and industrials; and retail/wholesale. However, mastering the ten rules of value-creating growth is only one part of a holistic growth recipe. Take the example of a European publishing group that made more than 60 acquisitions over the past decade to expand its portfolio into digital media offerings: digital assets now account for more 47 in 2020). How will Convoy beat Uber and other startups including Transfix and Cargomatic? None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of Sacra. We wondered whether programmatic acquirers outperform organic growers simply because they grow faster, so we extended the analysis to control for growth ratesin other words, comparing the performance of companies with different M&A strategies but similar growth rates. Drivers are getting paid less and more than 600 carriers went out of business in the first half of 2019, up from 175 in the same period last year, The Wall Street Journal reported. Through its use of data science, Convoy is driving the next evolution in efficiency across the industry. However, instead of charging a fixed percentage, it creates a price arbitrage between what a shipper is willing to pay and what a carrier expects as a fee and keeps the difference. Convoy's platform, accessible via a smartphone app, uses machine learning to match carriers to loads and prevent trucks from driving "empty miles" with no loads. Statistically, the worst thing you can do is try to buy growth with a big bang acquisition. The former category generated an additional 2.6 percentage points of annual shareholder returns through geographic expansion, while those that struggled locally gained only 1.3 percentage pointsnot enough to offset the performance drag from the weak home market (Exhibit 6). 2016 Series B. Transfix raised a Series B of $22M. We allocated each business segment in a corporate portfolio to one of 12 geographic regions. I know thats differentiated us.. Uber listed Convoy as a competitor in its IPO prospectus earlier this year. As Lewis begins talking about Convoy's latest funding round announced Wednesday a $400 million cash infusion raised at a $2.7 billion valuation he points at one in particular: Earn it through. Convoy's valuation in April 2022 was $3,800M. Convoy is one of a handful of Seattle startups valued at more than $1 billion, or "unicorns." The latest investment included a $160 million equity round led by Baillie Gifford and accounts. The Organization's Mission We build technology to find smarter ways to connect shippers with carriers while solving some of the toughest problems that result in waste in the freight industry. Then develop a coherent set of growth pathways that encompass as many of the rules as possible. Its the largest funding round for a Pacific Northwest company in more than a decade and comes on the heels of Convoys $185 million Series C round in September 2018 that valued the company at more than $1 billion. Please email us at: Author Talks: The worlds longest study of adult development finds the key to happy living, The executives guide to new-business building, Generative AI is here: How tools like ChatGPT could change your business. 2023 PitchBook. However, these figures varied among sectors during our study period. Remote). It also just landed a $150 million line of credit. His answer to Convoy's biggest challenges is a good lesson for other company leaders.https://t.co/3pIxJPAzEz pic.twitter.com/km0PyIqIRn, Taylor Soper (@Taylor_Soper) November 13, 2019. June 7, 2022 . However, earnings can't grow without revenue growth, so it's important to look at revenue growth first, as some growth stocks can double without any profits. The key global companies of Truck Fuel Card include Fuelman, Comdata, ExxonMobil, Shell, Convoy, CEFCO, Universal Premium, Coast and WEX, etc. Another direct competitor, Transfix, is set to go public this year. Note: Size of the bubble indicates valuation. Convoy's latest funding round was a Line of Credit for $150M on April 21, 2022. We think this is an area where we can have incredible impact on society because the supply chain is so big and so inefficient and there isnt an optimal supply chain solution thats available to anyone, Lewis said. Convoy is a managed marketplace that matches shippers with truck companies to facilitate freight movement. Convoy found an initial product-market fit by signing up the top 10% high-volume routes of two large enterprise shippers and using this demand to aggregate trucking companies operating on those routes. We found that programmatic acquirers still outperformed their organic peers. The Seattle-based company said the new funds include $160 million from a round led by Baillie Gifford and T. Rowe Price and $100 million in venture-debt investment from Hercules Capital. Convoy has raised a whopping $668 million since launching in 2015 and is also backed by the likes of Microsoft co-founder Bill Gates; Amazon founder Jeff Bezos; Expedia Chairman Barry Diller; Salesforce CEO Marc Benioff; Code.org founders Hadi and Ali Partovi; former Starbucks president Howard Behar; U2s Bono and The Edge; among others. After segmenting companies into four categories, our colleagues found that programmatic acquirersthose that did at least two small or medium-sized deals a year along the same themeoutperformed peers using other M&A approaches. 1301 2nd Avenue Suite 1300 Seattle, WA 98101 United States +1 (425) 000-0000 Convoy Timeline 2020 2021 2022 2023 Financing Round Captured Employee Count Estimated Employee Growth Want detailed data on 3M+ companies? When developing a growth strategy, often the first question on a CEOs mind is, Where should that growth come from? To help find the answer, we categorized revenue increases among our sample companies into growth within the core industry (their largest industry segments at the start of the study period), in secondary industries (smaller but still significant revenue contributors in the first year of our time frame), and in new industries (segments where the companies did not initially have a presence). Several of Convoys services, such as its drop-and-hook marketplace Convoy Go, saw a surge in demand over the past two years as shippers dealt with market unpredictability. The Revenue Growth Rate provides a solid indicator of how quickly your startup is growing. Its primary verticals are consumer-packaged goods; food and beverage; manufacturing and machinery; and retail/wholesale. It currently has 400,000 trucks. Lewis and Goodale have come a long way from hanging out at truck stops and getting kicked out of warehouses as they did market research when Convoy was just a kernel of an idea. The fastest-growing company in the sector increased its revenues by 21 percent annually, while the slowest contracted by 9 percent per year. Get the full list, Morningstar Institutional Equity Research. Naturally, the company's revenue grows accordingly: Convoy takes a percentage of each transaction on its platform. Seattle-based Convoy is taking on the $1.2 trillion global trucking and shipping industry with machine learning and a sustainable, efficiency-driven mission. As a trucking broker gets bigger, traditionally it doesnt get more efficient. The trucking industry generated nearly $800 billion of revenue in 2018, according to the American Trucking Association, which also says theres an ongoing driver shortage of more than 60,000 truckers. Outgrowing your industry implies a strong business modelan advantage rewarded by capital markets whether youre in a fast- or slow-growing industry. Firms that managed to grow faster and more profitably than their peers during our study period did even better, generating shareholder returns six percentage points above their industry averages. For the traditional folks, it was very easy for them to say, yeah, what Convoy does is interesting, but its really only relevant for a couple of niche scenarios, or, yeah, they do good work, but the shippers they work with are really only giving them the freight that nobody else wants. Convoy Supply Construction Materials. This leads to $4,000 / $96,000 = 0.0417 (rounded up). Founded in 2015 by Dan Lewis and Grant Goodale, both Amazon alumni, Convoy took a technology-first approach to the problems of waste in the logistics industry and inefficiencies in the supply chain. Companies with unreliable or missing segment data were excluded from the sample. Convoy made $750M in 2021, growing 50% annually. I follow technology-driven changes that are reshaping transportation. To date, the start-up has raised $668 million from the likes of Marc Benioff, Jeff Bezos, Bill Gates, U2's Bono and The Edge, and institutional investors including Fidelity, T Rowe Price, Y Combinator, and Alphabet's independent growth fund CapitalG. Analysts can review the sales of successive quarterly periods or the quarter of one year compared to. Convoy gets the benefit of additional load for its carriers, access to data for shipping routes managed by these brokers, and incremental revenue by capturing net new transactions. Many members of this minority are companies in slow-growing regions, such as Japan, that offset lethargic local growth with aggressive international expansion. 2 Min Read. Companies such as Convoy are now firmly on their radar, the CEO said. The US trucking market is worth $800B with 100k+ shippers and 1M carriers, of which 95% have less than 10 trucks. With its latest round, the biggest in Convoys history, that company has now raised a total of $668 million and tells Forbes its estimated valuation has grown to $2.75 billion. Convoy, Uber, and other startups are aiming to disrupt a $800 billion U.S. trucking industry. One such company was a global automotive tire supplier that diversified into brake and safety system technology, powertrains, and vehicle connectivity and information systems. Gross revenues in the domestic transportation management segment that includes freight brokers hit $139 billion last year, up 52.4% from 2020, according to Evan Armstrong, president of Armstrong &. Convoy, backed by the likes of Bill Gates and Jeff Bezos, expects to surpass $1 billion in revenue this year. Uber expects its Freight arm to generate positive adjusted EBITDA in 2022. Win whats next. We expect Convoy to operate at a gross margin of less than 10%, like Transfix (gross margin: 6.4%) and Uber Freight (operating margin: 0.1%), as the bulk of its revenue comes from enterprise shippers who offer take rates of less than 5%. All business leaders have cost benchmarks. Alpega is a B2B logistics software firm that offers end-to-end solutions for all transportation needs. 2. I have. Robinson booked $875M through its app/portal in 2021, up ~200% annually. A Division of NBCUniversal. Companies that grew into adjacent industries generated, on average, an extra 1.5 percentage points per year of shareholder returns above their industry peers. That is Convoys mission.. A large transportation company with 1,500 employees and an annual revenue of $106.8M, Convoy is headquartered in Seattle, WA. Want a sandwich? asks the 38-year-old CEO as he grabs one himself and dips into an adjacent room overlooking Puget Sound and the Space Needle. Convoy, a Seattle-based digital freight booker backed by Bill Gates, Jeff Bezos and Al Gores Generation Investment Management, closed a $400 million funding round to expand use of its data platform and other services that CEO Dan Lewis says reduces wasted time, empty trailers and even tailpipe pollution for truckers. Uber Freight is the largest trucking digital marketplace by revenue, grossing $2.1B in 2021. Hercules Capital SaaS Finance provides growth capital after Series B financing rounds, offering leverage on expensive . That caused an uptick in the number of smaller trucking companies to meet the demand. Sign up for a free trial to see Convoy's valuations in November 2019 and more. You can never really turn that entrepreneurial spirit off.. Sacra reserves any and all intellectual property rights in the report. Finally, doing many small deals enables companies to gain access to new markets or consolidate fragmented ones without the risk of betting the house.. The resulting growth code allows you to benchmark your growth performance and set the bar for your next strategy. Finally, instill the capabilities and operating model to execute with excellence. Transfix's Profile, Revenue and Employees. A typical company grew at a measly 2.8 percent per year during the ten years preceding COVID-19, and only one in eight recorded growth rates of more than 10 percent per year (Exhibit 1). Its last private valuation was $3.8B, with a 2021 revenue multiple of 5x, while publicly traded trucking companies have lower revenue multiples, with C.H. Having a technology-focused effort around productivity and efficiency becomes incredibly critical in times of high volatility, Gavin told GeekWire. I think its a reflection of the culture weve built here, Gavin said. convoy revenue growth. Track all of GeekWires in-depth startup coverage: Sign up for the weekly startup email newsletter; check out the GeekWire funding tracker and venture capital directory; and follow our startup news headlines. A revenue neutral growth-oriented tax reform would be to shift part of the revenue base from income taxes to less distortive taxes. We have quantified what it takes to master each rule, as well as the extent to which excelling at each improves corporate performance. See the metrics below for more information. Through its automated digital freight network Convoy connects carriers with shippers, upending the industry's broker-reliant tradition. Industry The company also arranges more precise drop-off and pickup times to ensure truck drivers are not waiting around warehouse loading zones for hours and can be back in service sooner. Convoy believes it can increase earnings for truck drivers while simultaneously reducing cost for shippers by removing inefficiencies in the existing supply chain, as seen in the flywheel below. Defined as the largest region in the portfolio by revenue. The case of a high-performing European manufacturer of agricultural and municipal vehicles illustrates the benefit of venturing abroad from a strong home base. We have that cultural mindset from an innovation perspective. Convoy was founded in 2015. A typical company grew at a measly 2.8 percent per year during the ten years preceding COVID-19, and only one in eight recorded growth rates of more than 10 percent per year. There are a bevy of similar companies aiming to take market share of a digital freight brokerage industry that could reach $54.2 billion by 2025, according to Frost & Sullivan. PitchBooks comparison feature gives you a side-by-side look at key metrics for similar companies. Only one in six of the companies in our data set with core-segment growth rates below their industry median managed to achieve overall corporate growth rates above those of their peers. . But thats more of an industry issue versus something specific to Convoy or an individual broker, said Paul. This reality may explain why companies that grow strongly at home benefit so much more from global expansionthey are more likely to have winning business models, aspects of which can be transferred to new regions. The industry must consolidate on a much larger scale before the largest players feel market share pressure from their peers. The fresh cash will help Convoy invest more heavily in its technology that automates transactions between trucking companies and shippers. Headquarters 34 Genthiner Strae, Berlin, Berlin, 10785, Germany Phone Number +49 3031197072 Website www.sennder.com Revenue $293.9M Industry Freight & Logistics Services Transportation sennder's Social Media Is this data correct? Theres a lot of Amazon DNA in Convoy, from the cultural principals to focusing on the customer. This time frame could refer to a monthly, quarterly, semi-annual, or yearly period, depending on how often you want to calculate said growth. Its revenue for the first quarter was up 51% year-over-year. The group includes Uber, which announced in September that it will invest $200 million annually in Uber Freight and hire thousands at a new Uber Freight headquarters in Chicago.