The acquisition, if successful, would bolster Flexport’s move into the U.S. trucking market on its road to retain profitability, The Wall Street Journal (WSJ) reported Friday (Oct. 27), citing a source familiar with the matter.
Convoy announced it was winding down its business earlier this month. According to the WSJ’s source, the deal with Flexport would see that the company bring on a small group of Convoy’s tech, business, and products staff, but not acquire its business or assets.
The source said Flexport would not take on Convoy’s liabilities, but — assuming the deal goes through — Flexport would try to restore Convoy’s trucking services for as many customers and partners as it could.
PYMNTS has contacted Flexport for comment but hasn’t yet received a reply.
Convoy suspended operations and announced it was winding down its core business earlier this month. The company had been valued at $3.8 billion after raising $260 million last year but has since suffered due to a decline in freight demand.
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In an email to staff, Convoy said that it would stop accepting shipments until further notice, would cancel or reschedule existing loads, and was exploring options that include selling off teams, software or intellectual property.
Convoy has been a major player in the digital freight sector, providing a platform that matches loads to available vehicles. Its customers included companies like Home Depot, Procter & Gamble, Unilever and Anheuser-Busch. The company’s success has been upheld by a number of prominent investors, such as Bill Gates, Al Gore, Jeff Bezos and members of the rock band U2.
The news comes amid separate reports that Flexport was restructuring to reshape its business to achieve profitability once more.
Founder and CEO Ryan Petersen hopes the company can become profitable by the end of 2024 or early 2025, though this may put Flexport’s plans for an initial public offering (IPO) on hold.
Petersen returned as CEO last month and has since made changes, including a 20% reduction in staff and overhauling the company’s leadership team. He resumed a day-to-day role last month, less than a year after leaving the chief executive post.
