Gates joins Bezos in backing Uber Freight rival

SEATTLE • Even as Seattle billionaires Bill Gates and Jeff Bezos jockey for the designation of world's wealthiest man, they are united behind at least one local venture. They are both investors in a trucking logistics start-up that competes with Uber Technologies.

Convoy, a two-year-old firm that makes software matching nearby and available truckers to a shipping job, yesterday said it raised a new round of funding from Mr Gates' Cascade Investment and other backers. Mr Gates joins Amazon.com's Mr Bezos, who invested earlier. The latest financing totals US$62 million (S$84 million).

The investment will not dent the wallet of Mr Gates or Mr Bezos, whose fortunes are within US$3 billion of each other, according to the Bloomberg Billionaires Index. But Convoy has become a hot start-up investment among billionaires, with Salesforce.com CEO Marc Benioff and KKR co-CEO Henry Kravis also shareholders. 

Convoy was initially pitched as an "Uber for trucking" and has raised US$80 million since starting in 2015. But this year, Uber rolled out its own version of on-demand trucking. The service, called Uber Freight, connects truck drivers with long-haul assignments.

There are other providers, like Trucker Path, but Uber's financial heft - having raised more than US$15 billion since its inception - makes it a force.

That is despite distractions posed by a lawsuit claiming that a former Uber executive, who was working on autonomous trucking technology, conspired with the company to steal trade secrets from Alphabet's Waymo. Uber denies wrongdoing.

Convoy CEO Dan Lewis hopes to take advantage of Uber's distractions, saying: "It isn't clear what's going to happen with Uber. The leadership... in general is gone."

  • SoftBank founder leading anti-Uber alliance

  • SAN FRANCISCO • SoftBank founder and chief executive officer Masayoshi Son emerged as the primary financier behind the anti-Uber alliance, as the United States ride-sharing firm faces the risk of losing out on another big chunk of global market to rivals, piling on a company crisis.

    On Monday, SoftBank and China's Didi Chuxing poured US$2 billion (S$2.72 billion) into Grab services in South-east Asia - home to some 620 million people from Indonesia to Myanmar.

    The money jeopardises Uber's push for global dominance and its US$69 billion valuation.

    "This funding round is a great threat to Uber," said Trustdata Internet consultant Zhou Xin. "If Uber loses South-east Asia, it will curtail its value proposition as a global operation."

    Uber sold its business in China to Didi after a fierce battle, and negotiated a similar move in Russia as it seeks to narrow losses. Now, it is grappling with an internal crises after chief executive Travis Kalanick stepped aside after a lawsuit over trade secrets, a probe over evading regulators and an investigation into alleged sexual harassment.

    In April, Mr Son led a US$5.5 billion investment in Didi aimed at giving it a war chest to invest in new technologies and for foreign expansion. SoftBank also sprinkled money into Brazil's largest ride-sharing start-up 99 and India's Ola, and is in discussions to back Uber's US competitor Lyft.

    "SoftBank missed the chance to invest in Uber before it became the leading ride-sharing platform," said Tokai Tokyo Securities analyst Masahiko Ishino. Mr Son has mostly chosen to corner Uber by investing in competitors around the world, a strategy that seems to be paying off.

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Uber said its two-month-old freight service has been greeted with enthusiasm. "We've learnt an incredible amount and are continuing to recruit the top minds in the industry as we ramp up our investment in this technology," a spokesman wrote in an e-mail.

The US trucking market is worth about US$800 billion, and it is rife with inefficiency.

Trucking, even the software-enabled variety, may seem like an antiquated industry for a tech leader like Mr Gates, but the world's richest man often leans towards investments in more traditional industries like rail, trash and tractors.

A spokesman for Mr Gates' investment firm said Convoy's promises to reduce road congestion and help the environment were major draws.

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A version of this article appeared in the print edition of The Straits Times on July 26, 2017, with the headline 'Gates joins Bezos in backing Uber Freight rival'. Print Edition | Subscribe