Anytime you can get funding from the likes of Amazon CEO Jeff Bezos, Salesforce CEO Marc Benioff, and Dropbox CEO Drew Houston, all in one bucket, it probably means you’re doing something interesting.
Convoy, a six-month old startup founded by ex-Amazon executive Dan Lewis, just did that. It announced on Tuesday that it raised $2.5 million in seed funding from a bunch of star investors, including Bezos, Benioff, and Houston, as well as eBay founder Pierre Omidyar and ex-Starbucks president Howard Behar.
So what exactly is Convoy? It’s a service that helps connect freight companies, or shippers, with local trucking companies, allowing them to bypass brokers who typically charge a hefty fee. It automatically comes up with the right pricing based on variables like distance and weight, and can track the shipment in real-time — basically serving as an on-demand, Uber-like service for truckers and shippers.
Lewis argues there’s a real need for a service like Convoy in the trucking industry. Most shippers rely on brokers who manually call a bunch of trucking companies to find available trucks on short notice, and in many cases, the pricing and tracking systems aren’t transparent enough, he says.
“It’s a fundamentally fragmented industry. A lot of it is inefficient and slow — there’s just a massive opportunity to be disrupted,” Lewis told Business Insider.
Lewis has a point. The trucking sector may not be the sexiest business, but it's absolutely huge: in 2013, it took in $650 billion in total revenue, or roughly 84% of the entire US commercial transportation industry’s sales.
And that’s one of the main reasons why he thinks he was able to attract so many high-profile investors.
“This is a clear business that needs to be improved,” Lewis added. “And when you have folks like that, who’ve built big, successful businesses, they want to get behind that.”
In fact, the trucking industry has seen a number of new startups raise millions of dollars recently, including guys like Trucker Path and Cargomatic. But Lewis says his team's strong engineering foundation (mostly comprised of ex-Amazon and Google engineers) give Convoy an edge.
"We went to market in just 5 months. We probably have the best engineering team pound-for-pound in the trucking industry," Lewis said.
Convoy has been in beta operation for the last six months and will become available to the general public starting today. For now, it'll mostly focus on the local trucking network, but Lewis sees Convoy becoming much larger than that.
"There's a big opportunity to really reinvent the trucking industry," Lewis said. "We want to build a big, easy-to-use trucking network that solves a lot of problems."
