Liz Young of The Wall Street Journal writes that once-highflying supply-chain tech startups are cutting staff, diversifying their businesses as a freight downturn collides with dimming investment. Thinning investor support is also contributing to the collapse of the digital freight startup Convoy. She tells her readers:
Venture-capital firms that once provided supply-chain technology startups with hefty backing at gaudy valuations have been tightening their pursestrings this year, pushing some of the businesses to slash costs, cut staff and look for other ways to survive in a weak freight market.
Thinning investor support contributed to the collapse of digital freight startup Convoy, which ceased operations in October just 18 months after topping out at a $3.8 billion valuation.
Tech-focused freight forwarder Flexport, shipment-tracking provider project44 and load-matching specialist Transfix are among high-valued startups in the U.S. that have laid off workers in the past year as deteriorating shipping demand eroded reserves that had been built up in a series of big funding rounds.
Venture firms concluded 404 deals totaling $5.7 billion for logistics companies in the first half of this year, down from 727 deals totaling $22.7 billion during the same period last year, according to PitchBook Data.
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