Convoy hires former Expedia CEO as president and COO as digital freight startup tops 1k employees

Mark Okerstrom, the former Expedia Group CEO, will become Seattle startup Convoy’s president and COO. (Convoy Photo)

Mark Okerstrom is shifting from travel and tourism to trucking, looking to apply his digital commerce expertise to a new marketplace.

The former Expedia Group CEO, who left the travel giant in an executive shakeup last year, is joining Convoy as the fast-growing Seattle startup’s new president and chief operating officer. Okerstrom will oversee Convoy’s finance, operations, marketing, supply and marketplace growth teams, working alongside  CEO and co-founder Dan Lewis.

The announcement comes as Convoy tops 1,000 employees, five years after it was founded by Lewis and CTO Grant Goodale. The company’s digital network is like ride-sharing for freight, matching shippers with truck drivers that have available space. Convoy is one of a handful of privately-held companies in the Seattle region valued at more than $1 billion, raising $400 million at a $2.7 billion valuation in September.

Convoy CEO Dan Lewis. (GeekWire Photo)

In an interview with GeekWire, Okerstrom said he first learned about Convoy early in the company’s history, when he was Expedia’s chief financial officer, sitting in the C-suite next to then-Expedia CEO Dara Khosrowshahi. Now the CEO of Uber, Khosrowshahi was an early Convoy investor.

That history is very relevant now: Uber competes with Convoy through its Uber Freight business, so much that Khosrowshahi divested his stake in Convoy after he joined Uber, to avoid a conflict of interest. Uber listed Convoy among its competitors, along with Amazon.

“I first started tracking Conroy shortly after it started, because Dara was an investor,” Okerstrom said. “He sat right beside me, and so we would always talk about investments, investment ideas. And so I was super intrigued about what they were doing.”

Convoy has raised $668 million over its lifetime from investors including Microsoft co-founder Bill Gates; Amazon founder Jeff Bezos; Salesforce CEO Marc Benioff; Code.org founders Hadi and Ali Partovi; former Starbucks president Howard Behar; U2’s Bono and The Edge; among others.

Expedia Group chairman Barry Diller, center, speaks with Dara Khosrowshahi and Mark Okerstrom during a 2016 event. (GeekWire File Photo / Todd Bishop)

Another Convoy investor is also familiar to Okerstrom: Barry Diller, the Expedia Group chairman, who cited a disagreement over strategy and disappointing financial results for the abrupt departures Okerstrom and CFO Alan Pickerill in December. That was before the pandemic threw the travel market into a tailspin.

After Okerstrom’s departure from Expedia, he was contemplating his next steps when Lewis contacted him.

“Dan just reached out at the right time; I had the background on the business. I hadn’t worked in an earlier stage company before. And yet there were so many interesting parallels between what we had done at Expedia and the opportunity ahead of Convoy. … I just said, ‘I just can’t pass this up. It’s gonna be a blast.’ ”

Okerstrom said he was also drawn by the environmental benefits of creating new efficiencies in shipping.

At some companies, hiring someone with experience as a public company CEO would foreshadow an initial public offering, but Lewis downplayed that notion.

“I don’t think that’s the primary driver here,” Lewis said in response to the IPO question. “If you were to listen in on our leadership team discussions, that’s not the thing that we’re spending our time thinking about right now. It’s how do we build the best business and continue to serve customers in new ways.”

They are spending time on expansion into new lines of business. Lewis pointed to Convoy’s recent launch of a payment service and fuel card for carriers as early examples of the types of programs and initiatives the company looking to roll out. The idea, Lewis said, is to “really think about trucking across multiple modes, but then also start to think about, how do we make the supply chain more efficient in all the places that overlap and interact with trucking.”

Lewis said the company has found in Okerstrom “somebody that can help us think about what that future looks like … across multiple businesses, really expanding to serve our customers.”

The pandemic has been a roller-coaster for Convoy, causing wild volatility in supply chains. The company says it saw demand for trucking surge in March and plunge in April, before rebounding to levels now approaching all-time highs.

The company cut a handful of positions early in the economic downturn, primarily in recruiting, after it reduced its number of open roles for the year. However, Convoy continues to add employees, and it is seeking to fill open roles.

For the record, Okerstrom hasn’t worked in trucking before, but he points out that his wife’s uncles are truck drivers in his native Canada, just in case that does anything to burnish his industry credentials.

If and when Convoy expands there, he said, “I’ll be a family celebrity.”

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Expedia revenue sinks 82% amid ‘worst quarter the travel industry has seen in modern history’

The pandemic crushed Expedia Group’s business during the second quarter as the travel giant saw revenue sink 82% year-over-year to $566 million.

Expedia missed expectations for Q2 revenue and earnings per share, which came in at -$4.09.

The Seattle company’s lodging revenue was down 78%; air tickets sold was down 85%; and advertising/media revenue dipped 91%.

Shares were down more than 3% in after-hours trading.

“The second quarter of 2020 represented likely the worst quarter the travel industry has seen in modern history and Expedia was of course not spared,” Expedia CEO Peter Kern said in a statement.

April was the “bottom of the trough,” Kern said, as cancellations exceeded new bookings.

Kern said gross bookings, which were down 90% in the second quarter, improved through May and June but are still down considerably year-over-year.

“It is clear though that it will be a bumpy and inconsistent recovery with virus numbers being volatile around the globe and country and region restrictions changing all the time,” Kern said in a statement.

This week RBC Capital said online travel is experiencing a “slightly faster recovery” than previously expected, though a resurgence in COVID-19 cases could slow that growth. The firm cited Expedia’s fast-growing international markets and has a 12-month stock price target of $105, up nearly 30% from today. Update: In a post-earnings report, RBC lowered its price target to $93. “Fundamental trends were very negative, but the worst is hopefully behind EXPE,” the firm noted.

(Vrbo website)

Earlier this month Expedia gave a business update, noting a surge in bookings on its vacation rental platform Vrbo. The company cited “drive-to destinations” as one of the first segments of travel to recover from the global health crisis that has restricted travel worldwide since March.

Expedia said today that Vrbo has a higher revenue per room night than the rest of its lodging business.

“People have a real interest in the whole-home model and being able to have their families alone and not in a shared space,” Kern said on an earnings call. “Vrbo really led the way for us.”

Expedia last month announced that it was retiring its HomeAway brand and bringing its entire vacation rental portfolio under the Vrbo name. Expedia paid $3.9 billion in 2015 to acquire HomeAway, which bought Vrbo in 2005.

Vrbo competes with Airbnb and is live in 15 countries. Interest in vacation rentals and camping-related accommodations is up as Americans look for low-risk travel alternatives.

Expedia is exploring additional cost-cutting measures and expects to exceed $500 million in annual run-rate savings this year. Expedia previously said in February — before the pandemic — that it was targeting $300-to-$500 million in annual cost savings in an effort to “streamline and focus” the business. The company laid off about 3,000 employees earlier this year.

Expedia responded to the economic and health crisis by raising $3.2 billion in debt and equity in April. It also made additional cutbacks including employee furloughs and executive salary reductions, and named longtime board member Kern as its new CEO. Kern had been overseeing the company’s operations with Chairman Barry Diller since the ouster of former CEO Mark Okerstrom and CFO Alan Pickerill in December.

In addition to the COVID-19 crisis, Expedia also continues to deal with from Google’s dual role as a rival in online travel, and a key source of customers through search traffic and paid advertising.

Since nose-diving in March, Expedia’s stock has risen steadily and has nearly doubled over the past four months.

The company last year moved to a new 40-acre waterfront campus in Seattle.

Expedia Group includes brands and sites such as Vrbo, Travelocity, Orbitz, and many others, in addition to the flagship Expedia.com.

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Expedia revenue sinks 82% amid ‘worst quarter the travel industry has seen in modern history’

The pandemic crushed Expedia Group’s business during the second quarter as the travel giant saw revenue sink 82% year-over-year to $566 million.

Expedia missed expectations for Q2 revenue and earnings per share, which came in at -$4.09.

The Seattle company’s lodging revenue was down 78%; air tickets sold was down 85%; and advertising/media revenue dipped 91%.

Shares were down more than 3% in after-hours trading.

“The second quarter of 2020 represented likely the worst quarter the travel industry has seen in modern history and Expedia was of course not spared,” Expedia CEO Peter Kern said in a statement.

April was the “bottom of the trough,” Kern said, as cancellations exceeded new bookings.

Kern said gross bookings, which were down 90% in the second quarter, improved through May and June but are still down considerably year-over-year.

“It is clear though that it will be a bumpy and inconsistent recovery with virus numbers being volatile around the globe and country and region restrictions changing all the time,” Kern said in a statement.

This week RBC Capital said online travel is experiencing a “slightly faster recovery” than previously expected, though a resurgence in COVID-19 cases could slow that growth. The firm cited Expedia’s fast-growing international markets and has a 12-month stock price target of $105, up nearly 30% from today. Update: In a post-earnings report, RBC lowered its price target to $93. “Fundamental trends were very negative, but the worst is hopefully behind EXPE,” the firm noted.

(Vrbo website)

Earlier this month Expedia gave a business update, noting a surge in bookings on its vacation rental platform Vrbo. The company cited “drive-to destinations” as one of the first segments of travel to recover from the global health crisis that has restricted travel worldwide since March.

Expedia said today that Vrbo has a higher revenue per room night than the rest of its lodging business.

“People have a real interest in the whole-home model and being able to have their families alone and not in a shared space,” Kern said on an earnings call. “Vrbo really led the way for us.”

Expedia last month announced that it was retiring its HomeAway brand and bringing its entire vacation rental portfolio under the Vrbo name. Expedia paid $3.9 billion in 2015 to acquire HomeAway, which bought Vrbo in 2005.

Vrbo competes with Airbnb and is live in 15 countries. Interest in vacation rentals and camping-related accommodations is up as Americans look for low-risk travel alternatives.

Expedia is exploring additional cost-cutting measures and expects to exceed $500 million in annual run-rate savings this year. Expedia previously said in February — before the pandemic — that it was targeting $300-to-$500 million in annual cost savings in an effort to “streamline and focus” the business. The company laid off about 3,000 employees earlier this year.

Expedia responded to the economic and health crisis by raising $3.2 billion in debt and equity in April. It also made additional cutbacks including employee furloughs and executive salary reductions, and named longtime board member Kern as its new CEO. Kern had been overseeing the company’s operations with Chairman Barry Diller since the ouster of former CEO Mark Okerstrom and CFO Alan Pickerill in December.

In addition to the COVID-19 crisis, Expedia also continues to deal with from Google’s dual role as a rival in online travel, and a key source of customers through search traffic and paid advertising.

Since nose-diving in March, Expedia’s stock has risen steadily and has nearly doubled over the past four months.

The company last year moved to a new 40-acre waterfront campus in Seattle.

Expedia Group includes brands and sites such as Vrbo, Travelocity, Orbitz, and many others, in addition to the flagship Expedia.com.

View the original article here

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