As Bill Gates and Jeff Bezos jockey for the designation of world’s wealthiest man, the Seattle billionaires are united behind at least one local venture.
They are both investors in a trucking logistics start-up that competes with Uber Technologies.
Convoy is a two-year-old Seattle company, makes software that matches nearby and available truckers to a shipping job. It works in the same way that the online business of the Kuwait-based logisitcs major Agility, and the Saudi-based start-up Trukkin, operate. Convoy said that it had raised a new round of funding from Bill Gates' Cascade Investment and other backers. Mr Gates joins Amazon's Mr Bezos, who invested earlier. The latest financing totals US$62 million.
The investment will not break the bank for Mr Gates or Mr Bezos, whose fortunes are within $3 billion of each other, according to the Bloomberg Billionaires Index. But Convoy has become a hot start-up investment among fellow billionaires. The Salesforce.com chief executive Marc Benioff and the KKR co-chief executive Henry Kravis are also shareholders. The IAC/InterActiveCorp chairman Barry Diller participated in the new round with Mr Gates.
Convoy was initially pitched as an “Uber for trucking” and has raised $80m in total 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, such as Trucker Path, but Uber’s financial heft – having raised more than $15bn since its inception – makes it a force. That is despite distractions posed by a lawsuit claiming 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.
The Convoy chief executive Dan Lewis said he hopes to take advantage of Uber’s distractions. “It isn’t clear what’s going to happen with Uber,” he said. “The leadership of the company in general is gone.”
Uber said its two-month-old freight service has been greeted by enthusiasm. “We’ve learned an incredible amount already and are continuing to recruit the top minds in the industry as we ramp up our investment in this technology,” a spokeswoman said.
Mr Lewis said Convoy is fulfilling thousands of shipments and generating millions in sales a week. He said sales volume is doubling every quarter but declined to provide figures. Consumer majors Unilever and Anheuser-Busch InBev have signed on as customers.
Convoy initially required pick-ups to originate in the US Pacific north-west and has since expanded to several other regions. It plans to use the new funds to go further, with operations in the north-east, mid-Atlantic and the south over the next year. Funds will also go toward software development. Mr Lewis declined to comment on Convoy’s valuation.
The new funding was led by Y Combinator’s Continuity Fund. It is the first time the Silicon Valley firm has invested in a company that was not incubated in its start-up programme. “The market opportunity is huge, and trucking is a space that has not had any innovation in two decades,” said Anu Hariharan, a partner at the Y Combinator venture fund.
The US trucking market is worth about $800bn, and it is rife with inefficiency. Mr Lewis said trucks are driving without cargo more than 30 per cent of the time, often after returning from a drop-off. He positions his company as a way to cut costs and pollution, a proposition that has attracted not just marquee investors but also a number of competitors. Some have already become road kill.
The threat of automation is looming over the trucking industry, with predictions that self-driving 18-wheelers will replace the large workforce in the future. Mr Hariharan said software to match trucks with jobs and track progress will be necessary, “regardless of who is driving the truck – man or machine”.
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 toward investments in more traditional industries like rail, trash and tractors. He is the biggest single investor in Canadian National Railway and Deere. A spokesman for Mr Gates’ investment firm said Convoy’s promises to reduce road congestion and help the environment were major draws.
Bloomberg
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Fund-raising tips for start-ups
Develop an innovative business concept
Have the ability to differentiate yourself from competitors
Put in place a business continuity plan after Covid-19
Prepare for the worst-case scenario (further lockdowns, long wait for a vaccine, etc.)
Have enough cash to stay afloat for the next 12 to 18 months
Be creative and innovative to reduce expenses
Be prepared to use Covid-19 as an opportunity for your business
* Tips from Jassim Al Marzooqi and Walid Hanna
