Backed by high-profile investors such as Jeff Bezos and Bill Gates in 2022, Convoy was hailed as the ultimate solution for supply chain logistics hiccups in the truck transportation space. But like a first-round draft pick gone bust, its talent didn’t translate into wins. Mom-and-pop trucking outfits are still trying to recover significant losses from the defunct Convoy.
Bezos and Gates reportedly dumped $160 million into the Seattle startup, and venture capitalists followed suit to the tune of $100 million. By April 2022, Convoy’s so-called “smart” technology and coffers earned it a valuation north of $3.8 billion. Of course, much of the hype was driven by folks who sit behind desks tinkering with AI and machine learning, not wheels-on-the-ground truckers. Before its October 2023 collapse, Convoy was hemorrhaging $10 million monthly. Truckers who put their trust in Convoy’s shiny image were left in the lurch.
Angadjot Sandhu, an owner-operator who worked with Convoy, was able to grow his business to five rigs and purchase a truck yard. Based out of Auburn, Washington, his relationship with Convoy translated to $500,000 in 2020 revenue for his Mountview Transport. Unfortunately, the 37-year-old Punjabi immigrant didn’t see the telltale signs the technology-based logistics company was in trouble until it was too late.
“The growth I was doing — they let me grow that much. Simple as that,” Sandhu reportedly said. “If you could see my pressure right now, my stress level. This is a big hit.”
Sandhu, like others using the Convoy app system, was in utter disbelief when the operation laid off 500 employees, and cancelation notifications began popping up on his phone screen. Convoy reportedly owed him upwards of $30,000, and Sandhu had drivers to pay with the outstanding money.
The losses were not restricted to the Seattle or Washington State areas. Small trucking outfits saw working with Convoy as an opportunity to get on board with a game-changer. Eagle Radovish, a mom-and-pop freight company based in Illinois, grew from six to 11 semi-trucks after throwing in with Convoy.
Biljana Filipova, who runs Eagle with her husband, has reportedly gone on the record indicating Convoy owes the outfit more than $156,000. She says the losses and stress are “breaking my whole family.” Adding insult to injury, Convoy reportedly extended Eagle’s contract through December 2024 while losing money. More than 40 small freight haulers and Ikea are embroiled in federal litigation to divvy up $519,254 owed Convoy for deliveries.
Sources:
https://www.wsj.com/articles/how-digital-freight-darling-convoy-ran-off-the-road-1ce48171
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