KeepTruckin's Shoaib Makani: His startup was valued at $1.4 billion last April, now it's laid off ... [+]
Trucking unicorn KeepTruckin laid off nearly one-fifth of its workers, the latest once-hot, venture-backed firm to be hit by the downturn.
An alum of last year’s Forbes Next Billion-Dollar Startups list, KeepTruckin reached a valuation of $1.4 billion last April as cash was pouring into the trucking industry. But as the coronavirus crisis has spread and pummeled the economy, the fortunes of KeepTruckin, which provides electronic logging devices to truckers, turned. On Tuesday, cofounder and CEO Shoaib Makani sent an email to employees that it was laying off 18% of its global workforce — a total of 349 people out of 1,900 — effective immediately. The news was first reported by trade publication FreightWaves.
“Freight volume is highly correlated with economic output,” Makani told Forbes by email. “It is impossible to predict the full impact of COVID-19 on the global economy and how that will flow through to our customers, but it is clear that economic output in North America is contracting rapidly.”
While consumers’ demand for household necessities amid the coronavirus crisis has increased, that has not been enough to offset the broader contraction. Makani noted that internal data showed a 12% reduction in vehicle activities in its network over the past two weeks, with the hardest-hit regions, including the West Coast and New England, declining by more than 20%. KeepTruckin has 65,000 customers.
In the letter to employees, Makani said that he would forgo his pay until things turned, while cofounders Ryan Johns and Obaid Khan would take 50% pay cuts. All employees with annual compensation above $50,000 who remained with the firm would be required to take a 10% salary cut, and no one would receive a bonus for 2019.
“Our product roadmap has not been impacted,” Makani said. “We will continue to build modern technology that improves the safety and productivity of America’s trucking industry.”
Before launching the company in 2013, Makani, 35, worked as a venture capitalist at Khosla Ventures. The previous year, Congress had enacted new regulations requiring truckers to use an electronic logging device to stay compliant with rules about the hours they drive. Makani realized then that he could bring truckers and small trucking firms into the digital age by allowing truckers to use their phones to comply with regulations, which went into effect in 2017.
As the old-school trucking industry moved online, KeepTruckin’s revenue surpassed $60 million in 2018 and it was expected to more than triple in 2019. Makani declined to comment today on revenue. However the company’s strong growth attracted a top-notch lineup of investors including GV and Index Ventures, which put $228 million into the company and gave it a lofty valuation last year.
KeepTruckin is at least the second company on last year’s Forbes’ Next Billion-Dollar Startups list to respond to the economic downturn with layoffs, following the news that energy unicorn RigUp had laid off more than 100 people. Forbes is tracking layoffs here.
