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Trucking startup Convoy closes operations with no buyer

354 点作者 infrawhispers超过 1 年前

35 条评论

neonate超过 1 年前
<a href="https:&#x2F;&#x2F;archive.ph&#x2F;iulxE" rel="nofollow noreferrer">https:&#x2F;&#x2F;archive.ph&#x2F;iulxE</a>
revel超过 1 年前
There are some really profound misunderstandings of how bankruptcy and credit work in this thread.<p>Creditors are ranked by seniority and get paid out in order by seniority. Equity is below every creditor and has been completely wiped out. Companies are not allowed to take cash or sell the furniture to pay out employees. That money is legally owed to creditors and attempting to stiff them is theft. I&#x27;m sorry to those affected at Convoy, but that is the reality of working at a startup that goes through a hasty liquidation. Convoy is not being &quot;cheap&quot; about this, as some are suggesting. Any &quot;retention bonuses&quot; are to keep executives around for long enough to unwind the company in an orderly fashion. Nobody is getting rich off failure; if everyone were to walk away there&#x27;d be nothing left and therefore nothing to recover and distribute. It&#x27;s bad for everyone, but the alternative is worse.<p>As for the larger situation: Convoy were a digital freight brokerage. They acted as intermediaries between shippers and carriers and make money on the spread between the two. They got into trouble because the entire freight sector has been suffering a double whammy of cost increases due to inflation (ie. diesel costs) and a slowdown in demand. This has caused a number of carriers and brokerages to go bust. Freight brokerage has some other properties that make Convoy&#x27;s situation particularly serious. In particular, carriers typically securitize their accounts receivable. In freight, this is known as &quot;factoring.&quot; Convoy got stuck holding the bag after their partner carriers went under, having already paid them for their service, but still waiting for payment from the shipper.<p>Worst of all, Convoy had no exits because their only potential acquirers are in the same industry and are also getting completely crushed.
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wooly_bully超过 1 年前
(Ex-)Convoy engineer here. No mystery as to why this happened, sudden tight market and low available capital demolished us. External reasons given in the article were the same we knew and couldn&#x27;t do anything about considering that none of the M&amp;A options materialized.<p>Detailed the shutdown on a call at 8:30am Pacific this morning. CEO said there&#x27;ll be no severance or healthcare.<p>Lot of talented folks in Seattle and beyond who&#x27;ll be looking for new gigs.
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kepano超过 1 年前
It&#x27;s the same story over and over (Deliverr, Flexport, Amazon, Shopify, etc)<p>1. the entire ecomm supply chain got way ahead of their skis during the pandemic thinking boom times would never end<p>2. no matter how good your software is, supply chain is cutthroat — a motivated low-tech salesperson can always undercut you<p>3. margins are razor thin, so if you&#x27;re subsidizing prices with VC money to buy growth you can easily rug yourself<p>4. when the storm comes to supply chain, the ones who stay alive are those with the biggest balance sheet and diversified business (e.g. Amazon)
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infrawhispers超过 1 年前
From a friend: Everyone was laid off with no severance or benefits. The CEO put all the blame on a lender in order to explain why there were no severance packages. This sucks because they took it upon themselves to offer staff retention bonuses earlier this year to keep people around after the earlier layoff.
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thegginthesky超过 1 年前
I work for one of their competitors and I can empathize with them. My thoughts goes to all the employees and their families.<p>The Freight business is collapsing after an unrealistic high during the pandemic. Since April 2022, revenue per load has decreased to about 70%, this means less ways to generate a profit under the same headcount.<p>We also saw a decrease in volume as companies overstocked and consumer spending has shrunk to less than 50% of what it used to be. Just add it all up and you see why so many companies are collapsing, carriers and brokers alike.<p>Though market.
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legitster超过 1 年前
What would a buyer have even been purchasing in this scenario?<p>A bunch of talented employees? Cool, they are all on the market anyway.<p>A bunch of tiny commodity contracts? Why?<p>A pile of code? Is it particularly hard to recreate?<p>Valuations are having a big wake-up call across the industry. While a company can be more than the sum of its parts, VC-backed tech companies have really struggled in industries where unit-economics rule.
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sharkweek超过 1 年前
Anyone here looking at this and wanting to tie it into broader market trends should read the following:<p><a href="https:&#x2F;&#x2F;www.freightwaves.com&#x2F;news&#x2F;freight-brokerage-bubble-bursting-as-freight-markets-face-long-winter" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.freightwaves.com&#x2F;news&#x2F;freight-brokerage-bubble-b...</a><p>Great deep dive into how drastically the freight market has shifted the last 12 months and the likelihood that Convoy will be the first of many more to fall in coming months.<p>Fascinating explainer of a market I didn’t know much about, especially the terms (covenants) laid out by banks that float the money on shipping accounts receivables.
jsdwarf超过 1 年前
Trucking startup? Convoy sounds like an ordinary freight exchange to me, where truckers trade available loading space against transport orders. For each assigned order, the trucker pays a transaction fee to the platform. Plus there are additional services like factoring: get paid immediately by the platform instead of 30 days later by the shipper, platform usually keeps 5% commission for this.<p>Dozens of platforms like this exist in Europe, not sure why everybody makes a fuss about it.
toomuchtodo超过 1 年前
Related:<p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37931893">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37931893</a><p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37937165">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37937165</a><p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37935804">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37935804</a><p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37946017">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37946017</a><p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37945817">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37945817</a><p>(dang: feel free to macroexpand and replace my comment with yours if you happen upon)
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joneholland超过 1 年前
From what I can tell, convoy has not filed for bankruptcy protection yet, which indicates that after dumping the load of their payroll, they believe they can remain solvent long enough to continue to shop their tech stack around.<p>That’s kinda disgusting imo. People deserve severances.
gcampos超过 1 年前
To think that 1 year ago they were aggressively spamming me for an engineering position there.<p>How you go from &quot;hyper growth mode&quot; (according to the recruiter email) to closed operations within 13 months?
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moralestapia超过 1 年前
1.1B USD in funding!<p>I&#x27;d definitely want to know more about how things came to be like this.
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Mistletoe超过 1 年前
From another article:<p>&quot;Between the lines: The shipping and logistics markets have turned south since the pandemic era&#x27;s boomtimes.&quot;<p>I think what you mean is this business makes no sense when interest rates aren&#x27;t zero and investors aren&#x27;t looking for places to stuff money.<p>&gt;The trucking marketplace gained a lot of buzz a few years ago, raising over $670 million from top investors like Jeff Bezos, Bill Gates, Capital G, Greylock, Y Combinator, and Fidelity.
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fairity超过 1 年前
And so it begins. A large wave of unprofitable startups that raised in 2021&#x2F;2022 are going to fail at becoming profitable and be forced into fire sales or bankruptcy over the next 12 months.<p>The capital constriction really started in Q3 2022. Here&#x27;s a graph: <a href="https:&#x2F;&#x2F;techcrunch.com&#x2F;wp-content&#x2F;uploads&#x2F;2023&#x2F;03&#x2F;Screenshot-2023-03-28-at-9.06.04-AM.png" rel="nofollow noreferrer">https:&#x2F;&#x2F;techcrunch.com&#x2F;wp-content&#x2F;uploads&#x2F;2023&#x2F;03&#x2F;Screenshot...</a><p>If I had to guess, bankruptcies like this peak sometime next year since many of these companies will find a way to last 24 months on their last fundraise.<p>Another recent example is Clutter, a moving company that raised $300m, who was forced into a fire sale for $30m.
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xyst超过 1 年前
Never heard of this company. Thought it was another automated trucking company. Bloomberg profile of the company shows it’s actually a platform for truckers (finding “routes”), and larger companies to manage routes, their fleets, and status of delivery. Most of this appears to rely on GPS.<p>Not sure why this was valued at $3.8B. Wall Street investment bankers smoking crack while evaluating this one.
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trucking超过 1 年前
Are they not going to pay us? We hauled the load from convoy but didn’t get the payment that was supposed to released yesterday. I tried calling them but nobody answered.we are just a small company and we are not getting paid for the we have done. Diesel is so expensive. Do I have pay expense out of my pocket?
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throwaway9274超过 1 年前
Hopefully the ZIRP idea that dies is that VC and Big Tech can create companies off a conveyer belt.<p>VCs today go after shiny baubles, like “27 innovators under 27” nonsense, and have forgotten they’re mainly looking for high talent very resilient technical weirdos and any other characteristics are bonus.
drewcoo超过 1 年前
We normally talk about the risk burden of founders (we&#x27;re all either founders or will be soon, right?).<p>We don&#x27;t often talk about how everyone involved in a business takes on risk. This is a great example of all the employees risking being cut off from funds and health care.<p>Those employees won&#x27;t be lionized for &quot;learning from their mistakes&quot; when they get a new (better paying?) job, will they?<p>Those employees also didn&#x27;t get a say in how the company was run despite the fact that they were taking a serious risk, too. Probably a more serious risk than a founder, given that most founders are wealthy or backed by wealth.<p>Convoy closing sucks. But it does not suck at all as an illustration of the problems in startup culture . . .
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nojvek超过 1 年前
Wow! I did not expect this. Convoy was hiring like crazy at one point, touting how fast they are growing and how much money they have raised. They were going to be the Uber for Trucking.
eli超过 1 年前
Why didn’t employees get more notice? Why wasn’t WARN Act triggered?
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toomuchtodo超过 1 年前
Related: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37946030">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=37946030</a>
wg0超过 1 年前
When there&#x27;s no buyer what happens to all the code&#x2F;IP?<p>I mean there must be something functional anyway at this point no matter how lean and mean.
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juliangmp超过 1 年前
I&#x27;m a bit confused by the fact that the article doesn&#x27;t seem to mention what the company was even trying to do. Like they had 1500 people at their peek... what were they doing? What was the business model here? Just farm investment and pull out before they notice you dont actually have any idea what to do?
v1l超过 1 年前
The entitlement in the comments for severance, healthcare etc baffles me.<p>You were paid a salary for your services while you were employed. You didn&#x27;t give more, they didn&#x27;t pay less. Now you&#x27;re not - that&#x27;s the end of the contract.<p>Yes, it&#x27;s a nice thing some companies do when they lay people off but that can&#x27;t be an expectation.
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duxup超过 1 年前
Is all they had was a sorta bid board and lots of spot rates with small carriers?<p>That&#x27;s a recipe for disaster if prices move...
ejb999超过 1 年前
sucks for employees, but lets be honest - if you worked at a company of 1500 people, and you watched that number dwindle to 500 over the course of a year, unless you lived under a rock, you pretty much knew this day was coming.<p>Exec&#x27;s can probably be faulted to waiting until the last minute&#x2F;dollar to close up shop to see if they could pull a rabbit out of the hat - but it seems there were about 500 employees <i>also</i> hoping against all hope that said rabbit would be pulled.<p>Advice for employees - when the writing is on the wall, <i>read it</i>, and plan&#x2F;act accordingly - best to start interviewing for a new job before everyone else from the same company, in the same area, is doing the same thing.
trucking超过 1 年前
Are we not getting paid? I hauled a load from convoy and I supposed to get my payment yesterday but didn’t get any. I tried calling them but nobody answered my call. Diesel is so expensive. Are we not getting the payment that we worked for?
acyou超过 1 年前
Money losing VC backed transportation brokerage goes broke. Doesn&#x27;t sound like this amazing ripe area for automation anyways as long as truckers are still at the wheel. Can&#x27;t imagine they were adding much if any value.
sputknick超过 1 年前
start-up idea if anyone is bored: disrupt car shipping. When I moved from Seattle to Raleigh shipping my car was BY FAR the biggest headache. It&#x27;s a 20th century business where you have to call people, who will bid for you, and you have no idea if your bid is accepted. Agents will promise a low price to get your business, then tell you a week later that bid was too low, you need to double it. I eventually just gave up and drove it cross country.
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tapatio超过 1 年前
How many &quot;empty miles&quot; did they prevent over their 8 years of existance?
stuaxo超过 1 年前
Really terrible labour laws they can just tell you it&#x27;s your last day.
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hexo超过 1 年前
What was this company about?
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JohnMakin超过 1 年前
Reading a lot of comments it&#x27;s clear to me some of the people commenting have never been through a startup in its final phases. At least in my case, it was well obvious to everyone 1+ year before it happened because repeated attempts at funding kept failing, parties got smaller&#x2F;disappeared, pay freezes, layoffs, snacks in the fridge started getting slimmer and slimmer pickings.<p>The worst part though is when you&#x27;re in that spot you <i>should</i> jump ship, unfortunately, there are sunk cost fallacies involved and sometimes a fair amount of equity that makes you want to try to hold on <i>for just one more month.</i> Who knows, maybe a miracle will happen or a deal will be closed.<p>I did not appreciate in my scenario that the founder REJECTED a buy offer for what would have been a life changing amount of money for me, because he thought it was too low. We were gone less than a year later, and in the final 4 months, we didn&#x27;t receive paychecks and were told if we left it&#x27;d ruin an acquisition and we&#x27;d screw all of our coworkers over. So that wasn&#x27;t fun. We never got bought and were peddled around the country like prized cattle to disinterested companies that didn&#x27;t want or understand our tech. Very miserable.
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renegade-otter超过 1 年前
&quot;The appetite for venture funding of freight brokerages has been dead for over a year and is partially responsible for the reason Convoy has failed. VC investors have woken to the reality that freight brokerage is not venture-investible.&quot;<p>So they WeWorked it. Instead of focusing on long-term growth strategy for a very good and sustainable business, the top management decided to get rich quickly, destroying the company. But I am sure they <i>did</i> get rich quickly.<p>Also see: Bed Bath &amp; Beyond
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