After completing a $1 million raise late last year, The Convoy has launched its B2B “Savings Marketplace,” which aims to help small businesses save on everyday expenses, the company announced today.
During its pilot program, Raleigh-based The Convoy saved independent businesses as much as $15,000. With the funding, Convoy’s CEO and Co-Founder Yasin Abbak said the company will invest heavily in growth and hypothesis testing.
“We don’t like to crawl,” Abbak said. “We like to sprint.”
The funding round included Tim Young of San Francisco-based Eniac Ventures and the Triangle’s own Scot Wingo, the CEO of Spiffy and founding CEO of ChannelAdvisor. Also among the high-profile investors are a VP at Google, the former CMO of Walmart, the former head of mergers and acquisitions at Clearco and a founder of Cloudera.
The quality of the investors that came onboard speaks volumes about how broadly applicable The Convoy’s mission is, said Abbak.
“It’s not just the feeling that having the funding gives to us,” Abbak said. “It’s also who’s giving the funding, because it means that people are aligned with our mission. We were in a very blessed position where we were able to say yes only to people that we thought were incredibly mission-aligned and understood what we are doing and were passionate about it as well.”
Wingo, who met Abbak in June 2020 when the latter moved to the area, was immediately impressed with his knowledge of startups and the execution of his former startup, Fantasy Life, a news and community app for fantasy sports players and sports bettors that we profiled in July of 2020. When Abbak told Wingo he sold Fantasy Life to Betsperts a year later and was starting The Convoy, Wingo quickly came onto the project.
At ChannelAdvisor, Wingo saw the struggle of e-commerce entrepreneurs trying to reinvent the wheel on areas like procuring supplies and finding shipping services. There was a huge opportunity to democratize those systems and bring them to smaller businesses, Wingo said.
“I think The Convoy will figure out how to build a solution that draws SMBs [small and medium-sized businesses] to them like flies,” Wingo said. “It’s going to be an iterative journey with lots of twists and turns, but with Yasin and the team at the helm, they will navigate the ‘The Convoy’ ship to success.”
Over the next month or two, The Convoy plans to hire at least four employees on the product and customer side and scale up its acquisition marketing. As founders, Abbak said The Convoy approaches all of their assumptions and hypotheses like scientists.
“Until that is in action, until it’s activated, it’s still an assumption,” Abbak said. “It’s a hypothesis, and it’s our job to test as many hypotheses as possible. It’s not just about getting an assumption correct. It’s just as important to disprove as many assumptions or hypotheses as possible, so that we can get closer to the real answer and the best way forward. That’s what funding allows us to do.”
The Convoy was created as a continuation of Abbak’s first company, Paired Media, which increased profit margins of restaurants through reducing expenses for certain supplies such as coffee cups or pizza boxes.
At its core, The Convoy has been a way to help people like Abbak’s father, who immigrated to the U.S. from Turkey. After graduating from one of the best engineering schools in the Middle East, he had to start over in the U.S. by peeling potatoes and washing dishes as he fought to achieve the American dream.
A large reason his father struggled, Abbak said, is because he had no economies of scale with his own small businesses, which over time ranged from a pastry distribution business to an auto repair shop. The huge retailers like Walmart get their goods, services and technology at lower prices. With The Convoy, Abbak is bringing greater efficiency to the small businesses like his dad owned.
When you empower small businesses, Abbak said, you are empowering the greater local economy. On average, these businesses provide more and higher-paying jobs for the community, generating 44 percent of all U.S. economic activity, according to the Small Business Administration Office of Advocacy.
While Abbak describes The Convoy’s current form as a “B2B version of Groupon,” the startup plans to begin offering the small business clients algorithm-based recommendations on changing their purchasing behavior. This would include suggesting the best time to switch to a new provider that will cost less money, or changing the delivery date of a product to save hundreds per year.
Partnering with Chambers of Commerce
So far, The Convoy has reached around 5,000 small businesses through Chambers of Commerce and associations. As the pandemic stifled the in-person events that Chambers of Commerce used to offer, The Convoy’s offerings to help small businesses save money have been more important than ever. Now these associations are empowered to say that they actively save their members money, Abbak said.
“Chambers of Commerce are going through an evolution right now, where the majority of their value-add to these small businesses was through in-person events, and that’s great,” Abbak said. “And I’m glad that they’re coming back. But essentially the last two years have really uncovered the opportunity to provide even more value to their small businesses.”
Still, The Convoy is in the process of collecting more data to figure out what the small businesses’ needs and wants truly are.
The Convoy’s big dream, though, is an even loftier mission: to redistribute wealth across the country by keeping money in the hands of local job creators and benefiting local economies.
“If we continually take care of these independently owned businesses, these small business owners, they’re going to know that they can trust us,” Abbak said. “Everything else will follow.”