Fleeting, which operates a platform to better manage trucking fleets, is using the crowdfunding site Republic to raise capital. So far, the company has received commitments for $219,559 from more than 1,000 investors. And the valuation is $10 million if you want to invest in Fleeting.
The company got its start back in April 2018. There are also three founders, which include:
- CEO Pierre Laguerre: He has 11 years experience as a CDL Class A Truck driver and owned his own operation, which generated $1 million in revenues during the first year. Laguerre has started several other businesses, with the aggregate revenues of $4 million.
- CTO Anil Jagarlamudi: He has over two decades experience in the software industry and has held executive-level positions at companies like Luma and AirWatch, which was acquired by VMware (NYSE:VMW).
- COO Paul Munguia: His background is in the fintech industry. He also co-founded Upright, which helps to build startups.
So then, let’s now get a backgrounder on the company and see what the merits are to invest in Fleeting:
Fleeting is essentially a marketplace that matches truck drivers with carriers. This allows for much more flexibility for drivers, without a need to own a truck. The mobile app has functions to specify when and where to work. Basically, all the driver has to do is show up.
As for the carrier, it gets third-party verification for credentials. But Fleeting also helps to boost business and fill gaps on an as-needed basis. What’s more, unlike other online services, there is no subscription fees. The carrier instead only pays based on the hours worked per truck.
Keep in mind that the costs for recruiting truck drivers is far from cheap. The fees can range anywhere from $6,000 to $15,000. As a result, there is often an imbalance with the number of drivers, which means underutilized trucks.
Another issue is that the turnover rate for truck drivers is high – at about 89% for large for-hire truckload carriers and 73% for smaller ones. Of course, there are also the ongoing costs for regulation.
Then what is the business model for Fleeting? The company essentially charges for the hours of the driver and takes a platform fee of anywhere from 20% to 45% (although, based on the investor materials, there are no guidelines provided for the spread).
All in all, Fleeting has relied primarily on word-of-mouth marketing. It certainly helps that the CEO does have deep connections in the trucking industry. For 2019, his company has been able to log more than 15,000 hours on the platform.
Invest in Fleeting?
The market opportunity is definitely massive. Note that the annual compensation for truck drivers is about $265 billion per year. And Fleeting believes that it can reach revenues of $1.3 billion, assuming it can retain about 10,000 drivers.
Regarding the investment, the company is issuing securities based on the SAFE (Simple Agreement for Future Equity) structure. This means you do not receive any equity until there is a “trigger event,” such as an acquisition or IPO. The investment also does not include any perks.
While Fleeting has an interesting twist with its business model and approach, there does not appear to be any sustainable competitive advantage. Besides, when creating a marketplace, there needs to be a large number of buyers and sellers, which is difficult and costly to put together. A company like Uber (NYSE:UBER) may be in a better position to do this. It not only has a massive user base but also substantial resources and a strong core technology infrastructure.
In other words, if you want to invest in Fleeting, it’s probably a good idea to do your own due diligence and make sure it fits within your diversification requirements.
Tom Taulli (@ttaulli) is an advisor and author of various books and online courses about technology, including Artificial Intelligence Basics, The Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s. As of this writing, he did not hold a position in any of the aforementioned securities.