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Convoy, a start-up specializing in digital freight booking, raised $ 185 million as part of a roundtable led by an investment subsidiary of Google's parent company
Alphabet
Inc.
GOOGL 1.47%
adding significant new support to the competing company in an increasingly crowded field attempting to reshape US shipping operations.
The Alphabet CapitalG led investment, one of the largest investments in a range of technology-driven freight start-ups, brings Convoy's total to $ 265 million.
Seattle-based Convoy is one of many operators trying to bring what Uber Technologies Inc. has built into the on-demand passenger industry to the world of freight. These companies include Uber itself, with its Uber Freight business, and other technology-based companies such as Transfix, Cargomatic Inc. and Trucker Path.
According to industry analysts, Armstrong & Associates, new digital-based freight management companies have leveraged more than $ 420 million in new support since 2011.
Convoy maintains a website and mobile applications that retailers and other shippers can use to book trucks to transport their merchandise, a popular service in a context of strong economic growth and the busiest season of the year before winter holidays. Like other digital freight brokers, Convoy says it can match shippers and carriers faster than traditional freight brokers with varying degrees of technology.
With the new funding, Convoy plans to go beyond basic brokerage by adding services such as the ability to book multiple shipments at once, speed up payments, and use shipment tracking data to identify the bottlenecks.
"There is in fact a set of persistent problems that shippers and truck drivers face," Lewis said. "So beyond mere correspondence [shipments to carriers], we go into this list of problems and we believe that we can build a technology that also treats them.
Convoy and other startups are attempting to embark on a highly fragmented business that includes several multi-billion dollar freight brokers, including
C.H. Robinson in the world
Inc.
Hub Group
Inc.
and
XPO Logistics
Inc.
as well as on-line freight exchanges, or loading tables, which correspond to the loads of the trucks available.
'There is in fact a set of persistent problems with which shippers and truck drivers are dealing … We think we can create a technology that is adapted to these problems."
Digital broker startups compete for shippers and freight carriers on their platforms, as larger volumes often result in better rates from carriers.
Cargomatic, based in Long Beach, California, raised $ 35 million last month and last year raised $ 42 million for Series C funding, bringing its total to nearly $ 79 million. of dollars.
The $ 185-million C series of the convoy also included funds and accounts advised by
T. Rowe Price Associates
Inc.
and Lone Pine Capital, as well as existing investors from Convoy Greylock Partners and Y Combinator. Convoy said David Lawee of CapitalG will join his board of directors.
Convoy reported working with several hundred shippers, including Unilever PLC, Land O 'Lakes Inc. and GE Appliances. Mr. Lewis said Convoy was looking to open a second office.
"This is only this central market," he said.
Write to Erica E. Phillips at [email protected]
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