News / Flexport's (lucrative) tech flip was simply a case of 'stars aligning'

Photo: Convoy

It was a sweet, unexpected deal; surely the best kind. Flexport has, essentially, flipped some technology, netting a profit – reportedly – of $234m. 

Flexport has admitted that it will only grow inorganically – while funds are tight, anyway – via fire-sales.  

True to its word, it raked through the ashes of failed digital brokerage Convoy, which collapsed in 2023, and snapped up the technology, according to CTOL Digital Solutions, for just $16m, a number which has not been confirmed by Flexport, which simply said it was a “modest” sum. 

In the intervening period, Flexport rebuilt the platform as a neutral digital freight platform for brokers, carriers and shippers, and according to CEO Ryan Petersen, brought back “tens of thousands of high-quality carriers”. 

“As the Convoy platform matured, it was clear that to achieve its full potential, it needed to be a neutral infrastructure layer.” 

Happily, in a case of “stars aligning”, DAT Freight Analytics, a freight exchange and information service, stepped in. With a big fat cheque for $250m, if CTOL is correct – about 12% of turnover, based on 2024 revenue. 

“We don’t comment on the numbers, but it was a big financial gain for us,” Flexport president Sanne Manders told The Loadstar. 

He explained: “We weren’t actively selling it, but when DAT reached out it was clear it would be a better parent for it. When we bought it, it was only a piece of technology.  

“We spent time to rebuild it and reorient the business from truck brokerage to software for truck brokerages where they had major competitive advantage.” 

Initially, Flexport had aimed to leverage the trucking element as part of an integrated logistics offering, but analysts were uncertain. And there was also concern over whether a neutral platform – but owned by a forwarder – would deter shippers. 

One analyst told media: “Operating a supposedly neutral marketplace while simultaneously competing as a participant creates fundamental trust issues that no amount of corporate firewalls can fully resolve.” 

Mr Manders added: “With the reorientation, it also focused on a different customer – truck brokerages, which is not Flexport’s primary focus. It is DAT’s.

“So it’s a win for us – a big financial gain – a win for DAT, because it acquired great tech which fits its business really well, and a win for the Convoy team, getting the attention they deserve within DAT to conquer the market they are going after. It’s industry-leading tech,” he said. 

Jeff Clementz, DAT CEO, posted on social media: “DAT Convoy Platform will join the Trucker Tools carrier visibility platform and Outgo payments platform as part of a strategy that’s been in motion for months: building a freight network that’s smarter, faster, and more connected.

“Convoy Platform gives brokers and carriers more ways to win. More control. More choice. And more time to focus on the freight that actually needs attention.”  

He added that the Convoy team would also join DAT, led by Bill Driegert and Mike Bundy.  

So, will flipping technology be a new revenue stream for Flexport? Its workforce comprises 400 software engineers, some 21% of the total. 

Unlikely, said Mr Manders. “This is not a repeatable strategy, more a matter of the stars aligning. We didn’t know this would happen [when we bought it].” 

Mr Petersen, however, said it was “exactly the kind of smart, strategic move we aim to make every time”. 

But, he added: “For Flexport, this sale allows us to focus our capital and energy on our core business.”