Last week, Convoy announced their collapse, a sudden operational shutdown for the Seattle trucking startup. Initially when it started up, many iconic names in technology and Wall Street invested in the company. In 2022, the company had:
- 17.7% gross margins
- Year-to-date had 18.1% gross margins
These margins were difficult to achieve and forced Convoy to walk away from shippers when they required margin sacrifice.
All operating expenses were below the line. Convoy's valuation was exaggerated by investors, valued at 10 times more than it should have. This was the ultimate demise of Convoy, being overfunded with a sharp growth rate that soon dropped.