Logistics platform provider Flexport is back on the acquisition trail, pouncing on the failed digital freight matching (DFM) firm Convoy to buy up its technology stack and potentially to restart its full-truckload service in the coming weeks, Flexport said in a blog post yesterday.
In addition to getting Convoy’s digital freight brokerage tech, San Francisco-based Flexport will also retain “a small group of team members from their core product and engineering team,” Flexport Founder and CEO Ryan Petersen said in the post.
Under the terms of that approach, Flexport will not acquire Convoy as a corporate entity but does plan to restart some of its dormant services. “We are not acquiring Convoy the company or any of its liabilities and our expenses will be limited to what’s necessary to maintain the tech,” Peterson said. “Although we are not acquiring the business, we will be looking to restore their full-truckload service in the coming weeks and have already received positive intent from some of their largest customers to come back.”
Terms of the deal were not disclosed.
Seattle-based Convoy shut its doors last month after eight years of operations and generous financial backing from investors, including a $260 million, “series E” venture capital round in 2022. The firm had also taken a leadership role in pulling the traditional trucking sector toward a more digital future by joining with J.B. Hunt Transport Inc. and Uber Freight to create a new industry standard for shipment appointment scheduling, through a group called The Scheduling Standards Consortium (SSC).
Despite that strong start, the tech upstart fell prey to a post-pandemic freight recession in U.S. trucking markets, as well as fast-rising interest rates on its loan payments as the Federal Reserve Bank continues its inflation fight.
According to Flexport, buying Convoy’s technology will allow the company to take another step toward its goal of making Flexport a “one-stop shop” for all its clients’ logistics needs.
“Flexport’s strategy will be to offer a full range of trucking services to our customers who value us as a one-stop-shop for global logistics,” Petersen said in the blog. “We’ll offer expanded trucking services, including FTL, LTL, drayage (ocean) trucking, cartage (airport) trucking, and eventually intermodal (rail) trucking services to customers of our international freight forwarding services. Every container that comes in eventually gets trucked onward to its final destination. Thanks to this deal, we’re now in a great position to complete our product vision as a true one-stop-shop to ship any product, in any quantity, between any two places in the world.”
The move is Flexport’s latest move to grow through acquisition, after it bought Shopify Logistics and its Deliverr unit earlier this year. Flexport is even more richly backed by investors than Convoy was, having recorded a $935 million funding round in 2022.