San Francisco-based logistics giant Flexport has sold the core technology platform of Convoy to DAT Freight & Analytics for approximately $250 million, less than two years after acquiring it for an estimated $16 million. This divestment marks a substantial profit for Flexport, highlighting a significant return on its initial investment in the shuttered digital freight network. The transaction underscores a strategic shift for Flexport in managing its technology assets.
Flexport initially acquired Convoy's assets in late 2023, intending to rebuild and relaunch the platform as a neutral digital execution layer for brokers, carriers, and shippers. The company invested 18 months into this effort, successfully gaining traction with tens of thousands of users. However, questions regarding the platform's neutrality arose, particularly given Flexport's primary business as a freight forwarder.
The sale addresses this strategic conflict, as noted by Lyall Cresswell, who stated in a tweet, > "The real story isn't the profit. It ’s why owning “neutral” freight tech conflicted with their core business." Flexport CEO Ryan Petersen confirmed that the presence of a powerful, neutral technology tool could complicate Flexport’s freight forwarding operations. This move allows Flexport to focus on its core digital brokerage services, which handle approximately 100,000 loads annually.
DAT Freight & Analytics, a business unit of Roper Technologies, plans to integrate Convoy's technology with its existing offerings, including Trucker Tools and Outgo. This acquisition is expected to enhance DAT's position in the North American truckload freight marketplace. Flexport will continue to be a significant commercial partner and remains DAT's largest customer on the platform, maintaining a strong relationship.
The lucrative sale puts Flexport in a strong financial position, as stated by Petersen, and demonstrates the value of digital assets within the logistics sector. While the profit is substantial, the strategic rationale behind divesting a potentially conflicting asset provides crucial insight into Flexport's long-term business strategy in the evolving supply chain landscape.