How Bezos and Gates Lost $1 Billion: The Convoy Collapse Nobody Saw Coming

In 2015, former Amazon employees Dan Lewis and Grant Goodale co-founded a startup called Convoy. The company was set to disrupt the trucking industry by providing an "Uber-like" digital brokerage app to connect carriers and shippers.

The company provided a platform for carriers to book loads, manage their business, track shipments, and receive payments. On July 25, 2017, the company raised a whopping $80 million in Series B funding, led by prominent VC firms like Y Combinator, Mosaic Ventures, and very wealthy individuals like Bill Gates, Jeff Bezos and former U.S. Senator Bill Bradley.

Everything was off to an amazing start.

By 2019, Convoy raised over $400 million, valuing the company at $2.75 billion, cementing its position as one of the fastest-growing startups and most influential in the logistics business. But four years later, it all came crashing down.

Despite the early momentum, co-founder and Chief Experience Officer Goodale left the company in the same year they cancelled all their shipments amidst rumours of an upcoming transition.

By October 2023, the company had ceased all operations and laid off all of its staff. Flexport acquired all of Convoy's assets for $16 million and relaunched the platform in 2024, focusing on providing software services to third-party trucking brokers.

So what went wrong?

In a memo, Lewis said the company faced both an "unprecedented freight market collapse" and "dramatic monetary tightening." "This combination ultimately crushed our progress at the same time that it was crushing our logical strategic acquirer—it was the perfect storm," he wrote.

The company faced brutal realities. The trucking industry is fiercely competitive, low-margin, and sensitive to macroeconomic shifts like fuel costs, freight demand, and supply chain disruptions. The company burned through almost $1 billion in funding, but could not manage to weather the storm it was facing.

In the end, the Convoy story shows how disruption isn't enough. The macroeconomics of a particular industry must be taken into account, particularly in the trucking industry, where margins are razor-thin and tech alone cannot overcome the operational challenges the industry faces.