Digital Freight broker Convoy shut down after raising $1.1B and was last valued at $3.8B. In a letter to its employees, Convoy CEO made the following statement:
We spent over 4 months exhausting all viable strategic options for the business. However, none of the options ultimately materialized into anything sufficient to keep the company going in its then current form.
So, what happened? In short, we are in the middle of a massive freight recession and a contraction in the capital markets. This combination ultimately crushed our progress at the same time that it was crushing our logical strategic acquirer – it was the perfect storm.
Logistical companies seem to have a lot of trouble these days. Yellow Trucking declared bankruptcy in August and Flexport is going through a drama-filled restructuring. The pandemic freight capacity shortage turned to a glut and the companies are coping with collapsed demand and prices. I feel this is not really a tech unicorn problem but more of a companies-with-weak-fundamentals-going-bust problem though. Chances are there will be a lot more high profile bankruptcies throughout 2024 and it’s not gonna be pretty.