Latest news with #Flexport
Yahoo
18 hours ago
- Business
- Yahoo
Load-matching wars escalate as DAT snaps up Convoy
DAT Freight & Analytics has announced the acquisition of the Convoy platform from Flexport. Sources suggest the price was around $250m in cash. DAT intends to shift away from its main business: a dumb load-board service that connects brokers with carriers. Convoy, a venture-backed unicorn, shut down abruptly in October 2023. Flexport snapped up its platform for $16m, hoping to weave it into its own services. The aim was to expand beyond international trade and freight forwarding into full domestic door-to-door logistics. That goal has faded, but Ryan Petersen secured himself as the best deal-maker in logistics, turning a previously mothballed platform into a massive 15x return in just 24 months. Flexport has cemented its role as a vital player in global trade, helping firms cope with ever-shifting rules and requirements. Despite volatility in trucking, Flexport's best bet is to stick to its strengths: providing seamless tools for international supply chains. DAT is disrupting DAT For DAT, buying Convoy transforms its offering. Its load board is a simple posting site, like Craigslist. Loads are listed online, but deals are struck offline. Think of it as a dating app for trucking: matches occur on the platform, but everything else happens elsewhere. DAT's former finance chief once compared it to Ashley Madison, the notorious affair site—not for its users' demographics, but because customers keep coming back rather than committing. Convoy's platform changes that. Built with hundreds of millions in venture funding, it is regarded as best-in-class by potential buyers. It handles the lot: finding capacity, matching loads, payments and execution. The system takes a cut for automating deals—like Amazon, not Craigslist. DAT has inched this way through acquisitions. It bought Trucker Tools, a visibility platform that links capacity to load matching. Then came Outgo, for payments and financing. These bolster liquidity and fight fraud, a plague in trucking. Convoy for Brokers thrusts DAT into a new arena. Transactions happen entirely on the platform. Brokers remain key, but DAT's tech handles the grunt work. That could slash costs by ditching carrier sales reps—a boon for managers, but a threat to those reps. The era of 'DAT rats', a term used to describe floor brokers that mindlessly post loads and match freight on DAT without much effort beyond that, may be ending. DAT will also participate in the gross merchandise value of the load, earning a commission rather than a software-as-a-service fee. Big brokers may be ambivalent. Consolidation could reduce costs, but it cedes more power to DAT. VCs spent billions to disrupt the model, but the incumbents will do it instead Venture capitalists dreamed of disrupting load matching. Instead, incumbents are doing it. This mirrors the payments industry a decade ago. Fintech startups, awash in billions, targeted Visa and Mastercard. The giants bought innovations to fill gaps. They prevailed. If DAT is Visa, the market leader, who is the number-two player, the 'Mastercard' of load matching? And if one is Mastercard, who is Discover—a late entrant with scant hope of contending? The contest seems to be between Truckstop and Highway + Triumph, rivals in fraud-risk management. Currently, the number-two position is held by Truckstop, which until a few months ago seemed poised to concede its role. It has since regained momentum with founder Scott Moscrip's return in June as interim chief executive, focusing on in-house product innovation. Original founders can work magic that few outside executives could hope to match. Earlier this year, Triumph bought Greenscreens, a rate-data startup rivalling DAT, for $160m—a steep price for a firm with $8m in annual revenues. Highway is launching a private load board to compete directly with DAT and Truckstop, hoping to capture share. In recent weeks, Highway has conducted joint sales calls on brokers along with Triumph, in a bid to secure second place in the load-matching wars. While Highway and Triumph are separate businesses, the market will view them as a common offering. There is also Cargado, Matt Silver's startup. It occupies an unchallenged niche in the fastest-growing segment: cross-border logistics. Entering the broader, cut-throat domestic truckload market would be daunting, but not unthinkable. It is probably years away—if it happens at all. Recent acquisition valuations show how much is at stake Whoever secures second place, one thing is clear: the premiums paid relative to revenues show the hunger for dominance in load matching. Roper, DAT's parent with a $60bn market cap, is unafraid of bold bets, as shown by the over $450m spent on acquisitions in the past seven months. That is hefty for logistics tech, especially since these platforms generated less than $20m in combined revenues at closing. Crazier still, Roper's investors will barely notice; none of these deals is material to the 'Berkshire Hathaway of software', as admirers call it. Triumph, on the other hand, spent over 10% of its market cap on a freight data business that is smaller than 2% of its revenues, with the hope that a combined Highway + Triumph will be a major contender in the load-board wars. This might prove to be a savvy bet, assuming the combo can gain traction. But the road to market relevance for Highway + Triumph will be contested with an entrenched category king, with a nearly unlimited budget to protect their core market and a legacy runner-up with founder's revenge. SONAR is sitting this one out, preferring our role as the only independent freight data provider As for SONAR, my own company, we have no intentions of getting into load matching. We believe that market is too crowded and our focus is on being the best source of truth in the market, regardless of where freight transactions are consummated. We've increasingly realized that our customers view our role markedly differently from those of DAT and Triumph's Greenscreens, or any other freight data platform. Clients use SONAR for market and strategic analytics—something no rival offers. We see it as a complementary data platform, whatever the outcome of the load-matching wars, providing deep market intelligence and high-frequency data unencumbered by transactions. True independence, regardless of how freight is matched (today or in the future). An uncontested blue ocean in contrast to the increasingly red one that is being fought over by three rival groups: DAT, Truckstop and Highway + Triumph. This is has become the most exciting period in freight tech history and its not the venture capitalists creating the momentum, but the sleeping giants. 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TechCrunch
2 days ago
- Business
- TechCrunch
Flexport sells former freight unicorn Convoy's tech two years after buying it
Two years ago, logistics company Flexport bought the assets of Convoy, a former freight tech unicorn that had closed up shop. Now it's sold that platform and delivered a 'massive return on investment for Flexport.' Flexport announced the sale on Monday to DAT Freight & Analytics, but declined to disclose terms. 'Over the past 18 months, we rebuilt and relaunched the [Convoy] platform as a neutral digital freight execution layer that serves brokers, carriers, and shippers across the market,' Flexport Ryan Petersen said in a statement. 'That investment paid off. The platform is now stronger, more widely used, and far more valuable than when we acquired it. As the Convoy Platform matured, it was clear that to achieve its full potential, it needed to be a neutral infrastructure layer.' Petersen wrote that the sale of Convoy's tech will allow his company to 'focus our capital and energy on our core business' of helping customers move freight around the world. The sale comes just a few months after Flexport announced the rollout of a suite of AI-powered tools, and a plan to launch waves of new products for its customers twice a year — an approach inspired by Airbnb CEO Brian Chesky. Flexport told TechCrunch at the time that the second product release will come in 'late summer.'
Geek Wire
2 days ago
- Business
- Geek Wire
Flexport is selling Convoy's technology to freight giant DAT
GeekWire's startup coverage documents the Pacific Northwest entrepreneurial scene. Sign up for our weekly startup newsletter , and check out the GeekWire funding tracker and venture capital directory . (GeekWire File Photo / Taylor Soper) Convoy's long, winding journey is getting another chapter. San Francisco-based freight forwarding company Flexport announced Monday that it is selling its Convoy Platform to DAT Freight & Analytics. The deal comes two years after Flexport acquired Convoy's technology amid the Seattle startup's shutdown. Convoy was once one of Seattle's most valuable startups, hitting a valuation of $3.8 billion in 2022 as investors bet big on the digital brokerage that connected shippers and carriers. But the company collapsed later that year, citing a freight recession and dampened investor appetite. Flexport acquired and later relaunched Convoy's marketplace, which will now be operated by Beaverton, Ore.-based DAT, a business unit of publicly traded industrial conglomerate Roper Technologies that operates the largest truckload freight marketplace in North America. 'The acquisition of Convoy demonstrates DAT's ongoing commitment to enhancing network value for our customers,' DAT CEO Jeff Clementz said in a statement. 'Together, we will give customers a better, broader freight-matching network, the ability to manage more loads and capture incrementally more business, and ultimately more choice.' Freightwaves reported that Flexport's deal with DAT was valued 'near $250 million.' DAT earlier this year acquired Outgo, a Seattle startup that sells banking services to freight carriers. Convoy co-founder and former CEO Dan Lewis joined Flexport in a technical advisor role but left in 2024 and is now a corporate VP at Microsoft. Convoy co-founder Grant Goodale this year joined Florida-based logistics giant Ryder as chief product and technology officer.
Yahoo
2 days ago
- Business
- Yahoo
Less than 2 years after Flexport bought Convoy's tech stack, it's being sold to DAT
The tech stack that was at the heart of now-defunct digital brokerage Convoy is on the move again, being sold to DAT in a move seen as significantly broadening that company's value proposition in the freight market. Freight forwarder Flexport, which acquired the tech stack from the remnants of Convoy less than two years ago, said Monday it is selling the product to DAT. When a company retreats from something it bought quickly, it is often a sign of defeat. (An old reference certainly, but the deal by Quaker Oats (NYSE: PEP) in the 90's to buy beverage maker Snapple for $1.4 billion, only to sell it back to its original owners three years later for $300 million, is considered the ultimate example of that sort of humbling failure). There is no sign that is the case with the quick flip of the Convoy tech stack. Ryan Petersen, the CEO of Flexport, said the return on the sale of the Convoy tech 'puts Flexport in an awesome place financially.' When Flexport purchased the Convoy tech stack in late 2023, the price on the transaction was reportedly $16 million, though neither company confirmed that price. The sale to DAT reportedly was made at a price near $250 million, though the companies declined to disclose the sales price. Besides the strong return on investment, Petersen, in a joint interview with DAT's CEO Jeff Clementz, said the presence of a powerful technology tool serving brokers that is supposed to be neutral could often complicate Flexport's primary business of freight forwarding. Neutral might not be neutral 'What we realized is that a neutral platform is not neutral,' Petersen said. 'We have a brokerage. We're a massive freight forwarding company.' The combination, he said, raised questions in the industry whether the Convoy platform truly could be seen as neutral. It's not the first time a company in the freight tech world has wrestled with the issue. When what is now Triumph Financial (NASDAQ: TFIN) bought HubTran to serve as an open loop auditing system for brokers and factoring companies, Triumph's management took great pains, repeatedly, to stress that its traditional factoring business could not get an inside look at what its factoring competitors who were using the legacy HubTran platform were doing. Petersen noted that the digital brokerage business that came with its 2023 acquisition of the Convoy tech stack will remain with Flexport. It processes about 100,000 loads per year, he said, 98% of which are completed with no human involvement. It will also continue to use the Convoy system even though it will now be owned by DAT, according to Petersen. 'On day one, we will be their biggest customer and we hope to continue to be their biggest customer,' he said. A widening range of offerings from DAT For DAT, the purchase is possibly transformative. In the past several months, besides promoting Clementz to CEO, it has purchased visibility provider Trucker Tools and payments platform Outgo. (Clementz said DAT did not pursue an acquisition of the Convoy tech stack when it was first offered for sale as part of the Convoy bankruptcy). With the purchase of the Convoy tech stack, it has now vastly increased its range of offerings to the freight sector with capabilities that have moved well beyond its traditional load board. Clementz, in his interview with FreightWaves, laid out what might be considered the three segments of how loads are offered into the market. About 50% of broker loads, he said, get moved through a broker's private network. But after that, he said, 'you might go to other load boards,' adding that DAT is the 'backstop you need to go to, ultimately, especially in the last 24 to 48 hours.' If brokers choose to use their private network, Clementz said, that also may come with a decision to put the load on what will now be DAT's Convoy platform, 'because I don't have to touch it. And if it all works, fantastic. If not, then I'll intervene and I'll work it through the load board.' Ultimately, he said, DAT believes the Convoy platform, with its power of automation to get shipper and carrier together, will be the first place that loads will be placed. But from there, Clementz said, if a match isn't made it can 'waterfall' down to the DAT platform. 'We think we can go directly from the shipper to the TMS (transportation management system) and into the Convoy platform directly and then move to the load board,' Clementz said. The Convoy tech team–which is coming over to DAT in the deal–already has been working with TMS providers to have loads in a TMS populate into the Convoy platform automatically. Load board will continue to be dominant for awhile But change isn't overnight. 'We actually think the load board will be the primary use case for quite a long time,' Clementz said. Fraud prevention is expected to be a major selling point of the broader DAT product offering, Clementz said. DAT already was set to launch a fraud management solution before the deal with Flexport. But the Convoy system long had been admired for its own fraud prevention tools, Clementz said. Building it into the DAT platform on top of its own capabilities 'will really make DAT the safest platform,' he added. There will be no upfront fees for DAT users to sign up to use the Convoy platform, Clementz said. Fees will be transactional, so a DAT user can access the Convoy system with no payments unless a transaction is completed. But that fact also is a driver to the deal, according to Clementz. Bringing in new users on to the system has an extremely low customer acquisition cost, which often goes by the acronym CAC, and that may slow some early adoption, he added. 'I think we will have more demand than we can handle for onboarding, so we'll probably have to create a wait list because there's no cost to sign up for this,' Clementz said. 'It will take time for us to integrate accounts, set them up and get them going.' DAT is a unit of publicly-traded Roper Technologies. (NASDAQ: ROP) In the company's latest conference call with analysts, president and CEO Laurence Hunn said DAT's financial performance in the second quarter 'was solid…and had strong (average revenue per unit improvements).' DAT data is not broken out separately in the Roper earnings. Hunn also said DAT had made 'significant progress' integrating Trucker Tools into its system. More articles by John Kingston Yet another broker liability case, this time in the Fifth Circuit, adds to the growing mix Ryder's used vehicle numbers show a bullish corner: tractor sales Five takeaways from the State of Freight for July: What earnings and the indices are saying about the market The post Less than 2 years after Flexport bought Convoy's tech stack, it's being sold to DAT appeared first on FreightWaves.
Business Wire
2 days ago
- Business
- Business Wire
DAT to Acquire the Convoy Platform from Flexport
BEAVERTON, Ore. & SAN FRANCISCO--(BUSINESS WIRE)--DAT Freight & Analytics has agreed to acquire the Convoy Platform from Flexport, adding best-in-class automation and digital freight-matching technology to its product portfolio. 'The acquisition of Convoy demonstrates DAT's ongoing commitment to enhancing network value for our customers,' said Jeff Clementz, DAT President and CEO. Share The Convoy Platform provides freight brokers a powerful way to automate virtually every aspect of the freight transaction and connect with trusted trucking companies. It is an ideal complement to DAT One, DAT's flagship subscription-based load board, where nearly 700,000 loads are posted daily. 'The acquisition of Convoy demonstrates DAT's ongoing commitment to enhancing network value for our customers,' said Jeff Clementz, DAT President and CEO. 'Together, we will give customers a better, broader freight-matching network, the ability to manage more loads and capture incrementally more business, and ultimately more choice.' 'We invested in the Convoy Platform because we saw its potential. In just 18 months, we improved the core technology platform, reengaged the market, and significantly increased its value. Importantly, we demonstrated a strong product-market fit by decoupling the platform from a brokerage,' said Ryan Petersen, Founder and CEO of Flexport. 'We look forward to a lasting relationship as a DAT customer. This sale is a win for the entire freight industry, a win for DAT, and a win for Flexport.' Flexport acquired the Convoy Platform and related intellectual property in October 2023 and launched the Convoy Platform as a freight-matching service for all brokers in April 2024, growing the platform with thousands of carriers. Flexport's vision and investment in building and scaling the Convoy Platform for the broader market, as a neutral digital marketplace, creates significant value for DAT and its customers. Furthermore, this acquisition will enhance DAT's innovative team and technology by adding: Deep experience: The Convoy Platform's engineers, product experts, and operations professionals will continue to be led by Bill Driegert, who will join DAT's executive leadership team. The Convoy Platform's engineers, product experts, and operations professionals will continue to be led by Bill Driegert, who will join DAT's executive leadership team. Fraud prevention at scale: The Convoy Platform's proprietary technology uses machine learning and AI models to verify carriers on the network and block malicious actors. With these advanced security features built in, brokers can reduce their risk of fraud and access a trusted network of carrier capacity, all while increasing their efficiency and growing their business. The Convoy Platform's proprietary technology uses machine learning and AI models to verify carriers on the network and block malicious actors. With these advanced security features built in, brokers can reduce their risk of fraud and access a trusted network of carrier capacity, all while increasing their efficiency and growing their business. Easy-to-use mobile experience: The Convoy Platform is recognized for high carrier satisfaction and usability. Today, nearly 30,000 carriers—primarily owner-operators and small trucking companies—use the app to find loads, manage paperwork, receive payments, and more. The Convoy Platform is recognized for high carrier satisfaction and usability. Today, nearly 30,000 carriers—primarily owner-operators and small trucking companies—use the app to find loads, manage paperwork, receive payments, and more. Fast, reliable payments: Every carrier on the Convoy Platform is eligible to get paid via QuickPay. It's easy to use and available on every load on the platform, providing another option for fast payouts to carriers. DAT will ultimately integrate the Convoy Platform into its DAT One product. This will allow brokers to seamlessly access both automated and hands-on freight-matching options, and give carriers a faster, easier way to find quality loads from trusted brokers, supported by DAT's scale and reach. For more information about the Convoy Platform, visit About DAT Freight & Analytics DAT Freight & Analytics operates DAT One, North America's largest truckload freight marketplace; DAT iQ, the industry's leading freight data analytics service; Trucker Tools, the leader in load visibility; and Outgo, the freight financial services platform. Shippers, transportation brokers, carriers, news organizations, and industry analysts rely on DAT for market trends and data insights, informed by nearly 700,000 daily load posts and a database exceeding $1 trillion in freight market transactions. Founded in 1978, DAT is a business unit of Roper Technologies (Nasdaq: ROP), a constituent of the Nasdaq 100, S&P 500, and Fortune 1000. Headquartered in Beaverton, Oregon, DAT continues to set the standard for innovation in the trucking and logistics industry. Visit for more information. About Roper Technologies Roper Technologies is a constituent of the Nasdaq 100, S&P 500, and Fortune 1000. Roper has a proven, long-term track record of compounding cash flow and shareholder value. The Company operates market leading businesses that design and develop vertical software and technology enabled products for a variety of defensible niche markets. Roper utilizes a disciplined, analytical, and process-driven approach to redeploy its excess capital toward high-quality acquisitions. Additional information about Roper is available on the Company's website at About Flexport We believe trade can move the human race forward. That's why since our founding in 2013, it's our mission to make global commerce so easy there is more of it. Flexport is the tech-driven platform for global logistics—empowering buyers, sellers and their logistics partners with the technology and services to grow and innovate. Flexport was one of CNBC's Disruptor 50 Companies as well as one of Fast Company's Most Innovative Companies. Trusted by more than 10,000 brands, Flexport connects every step of the supply chain from factory floor to customer door—making it easy for businesses to ship anywhere, sell everywhere, and grow faster.
