RUNNING OUT OF OXYGEN

VENTURECAPITAL-FUNDED PRIVATE MARKETS FUELED THE CREATION OF HUNDREDS OF BILLION-DOLLAR STARTUPS OVER THE PAST DECADE. NOW THOSE MARKETS ARE IN UPHEAVALAND THE UNICORNS ARE IN CRISIS.

- JESSICA MATHEWS

In its prime, the Seattle-based freight network company Convoy was one of tech's esteemed startup success stories.

Two Amazon veterans set off on their own in 2015 to build a platform that would connect shippers with carriers who had extra, unfilled space on their tractor trailers-making supply chains more efficient and reducing emissions. Flush with more than $1 billion in equity funding and debt it had accumulated over the years from some of the tech industry's most prominent investors, entrepreneurs, climate activists, and lenders, Convoy had at one point hired 1,300 employees and built out a network of more than 400,000 trucks across the country.

By 2022, Convoy had started to dabble in a wide array of business lines outside its initial purview: a fintech offering for quick payments; a fuel card for discounts on diesel; a trailer-rental service. By the end of that year, Convoy's gross margin had grown to a respectable 18%, according to a document seen by Fortune. But its hefty fixed expenses, including steep engineering and product team costs and an expensive lease in Seattle, were weighing down its financials, according to someone close to the company. Those expenses kept Convoy from turning a net profit.