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KeepTruckin, which is now valued at $500M, has grown its ARR by 80x in the last year
Updated to include statement from Mike Volpi
Back in 2012, the U.S. Congress passed the electronic logging device (ELD) mandate forcing all trucks to be outfitted with devices that track, manage, and share records of drivers’ on-duty hours. It went into effect in December and now, starting on April 1, things are really going to heat up as inspectors will start placing drivers out of service if their vehicle is not equipped with one an ELD.
This new rule is poised to forever change the trucking space, which is one that has long had the reputation of not adopting new technologies, by forcing trucks to become connected for the first time.
One company that stands to benefit from this change is KeepTruckin, a provider of fleet management solutions and Electronic Logging Devices. On Tuesday, the company announced that it raised $50 million in Series C financing. The round was led by IVP, with participation from existing investors Scale Venture Partners, Index Ventures, and Google Ventures. This latest round of funding brings the company’s total raised to $78 million. KeepTruckin is now valued at $500 million.
“There’s a race to bring the trucking industry online, and KeepTruckin is in the lead,” Mike Volpi, General Partner at Index Ventures, said in a statement to VatorNews.
“They owe their advantage to their intense focus on the driver and using technology as an enabler and not as a replacement. Realistically, self-driving trucks are still more than 20 years away, and KeepTruckin has the unique opportunity to create the broadest network by connecting drivers, trucking companies and truck manufacturers together.”
Founded in 2013, KeepTruckin provides fleets with features to help them manage and connect their trucks. That includes compliance, fuel tax reporting and GPS tracking. In addition, the company also designs and develops its own ELDs, and provides an Electronic Logbook App which connects to the ELD via Bluetooth and automatically records driving time. Drivers can use the App to view and edit their logs, create vehicle inspections and send messages.
In the past 12 months KeepTruckin has seen major growth: its annual recurring revenue is up 80x, from $500,000 in 2016 to $40 million in 2017. By the end of this year it expects to grow another 5x to $100 million. In addition, the company grew its customer base from 500 to over 30,000 companies. By the end of 2018, KeepTruckin expects to have 400,000 trucks using its technology.
While KeepTruckin does work with large fleets, such as Landstar, which has 12,000 vehicles, its primary customers are long-haul fleets that need to comply with the ELD Mandate. This includes more than 300,000 owner-operators and small trucking companies.
“We started with the small fleet primarily because that’s the segment of market that we felt was particularly under served. The incumbents aren’t well suited to actually solve the problems of small fleets. Usability, accessibility of the product, just making it easy to deploy, easy to buy even. We focused on that segment and really focused on the core functionality that they need to be successful. None of the extraneous stuff. Really focused on compliance, electronic logs, fuel tax reporting, communication and that overlaps really well the needs of the small fleets," Shoaib Makani, Co-founder and CEO of KeepTruckin, told me.
Even as KeepTruckin does go up market and start serving the larger fleets, the company will still operate in a way that allows the easy adoption of the small fleets, he said.
The effect of the ELD mandate
Makani attributes a lot of this growth to the ELD mandate, which has forced trucks to adopt its technology.
“The ELD mandate is the foundation of our business, and has gotten us to very significant scale, and when you look at the market there’s still hundreds of thousands of vehicles that have yet to comply with the federal rule, and then there is state specific rules for interstate commercial vehicles that are subject to state specific mandates that go into effect this year, and there’s a Canadian mandate that goes into effect in 2019. So the combination of all that means that we will grow significantly on the back of mandate driven adoption," he said.
However, the company will also be using this funding to drive product development, which Makani says will help drive growth among its existing customer base.
"We are actively expanding the scope of our product. Compliance is one piece, but telematics is another important element and then video monitoring, so we will soon be bringing to market additional functionality that delivers value for our customers and improves safety and improves efficiency. Our growth will be both driven by new customer adopting our ELD, but also expansion within our current customer base by delivering additional products and services," he said.
In terms of telematics, the company already offers a number of those functionalities in the product, including driver performance monitoring, vehicle diagnostics, vehicle utilization tracking, fuel economy tracking, but now plans to go deeper.
"We want to expand that and help the fleet not just see the data but drive insights, take action. We will be investing aggressively to expand the scope of that functionality, adding things like geofencing, intelligent recommendations, just helping fleets run a tighter operation on the back of the data we collect from the vehicle, but then also the sensors in our telematics hardware," Makani said.
In terms of video monitoring, KeepTruckin hasn't released the product yet, so Makani was not able to give me all the details about what it will look like, but he was able to give me a broad overview of how the company is thinking about implementing it.
"The way we’re thinking about it is really extending and augmenting the driver. Helping them operate more safely by leveraging machine vision, event driven video capture, for driver coaching as well as driver assist," he said.
"There will be an element of review and coaching so you can see what transpired in the past and how you can improve, but it’s not just about giving that to the fleet manager, it’s important to make the driver aware of that and help them improve directly. It wont just be to collect the data, it will be a recommendation driven product. There will also be functionality that helps the drivers avoid and prevent critical events."
The funding will also go toward expanding KeepTruckin's market presence, particularly with two new offices in Nashville and Buffalo, while also building out its product development, expanding sales and support teams. Over the last year, the company expanded its team from 70 to 500 members over its six global offices.
The future of KeepTruckin
One of the most important aspects of the ELD mandate is the data that it will produce, which will allow fleets to run more efficiently and improve utilization. Going forward, KeepTruckin plans to use the data gleamed from the ELD mandate to help its customers be more productive and profitable.
“The ELD mandate is a regulatory catalyst for connectivity in this business, and we’ve gotten ahead of it and we’re coming out of it as the leading ELD vendor for owner operators and small fleets and the next generation of fleet management technology for the trucking industry. That is the position that we’ve established, but really the connectivity that is gained on the back of this mandate is, I believe, the real upside here. Now you have trucks that have gone from being completely offline and disconnected to now being connected on the network. That allows for subsequent innovations. It allows for improved freight matching, and we starting to explore ways to bring that innovation to our customers in partnership with third party logistics companies, brokers that we work closely with already, like TQL, Coyote Logistics and others,” said Makini.
“We fundamentally want to partner with the leaders in this business to help our carriers make more money. We are partnering with the leading brokers already and we want to leverage those partnerships to deliver more value for our customers. That is how we’re approaching this and that’s how we’re executing in 2018.”
New board members
In addition to the funding, it was also revealed Sandy Miller, General Partner at IVP, will join the Board of Directors at KeepTruckin, while Roseanne Wincek, Principal at IVP, will join as Board Observer, effective immediately.
"Collectively, they have seen many companies go through our growth trajectory. They are growth investors, so they invest at the Series B, Series C stage and see companies go public. That experience is highly relevant. We want to build a big independent company and they have seen it done many times over. That experience by itself will be tremendously valuable," said Makani.
"More specifically, they were previously investors in Fleetmatics and @Road, the first and second generation of fleet management technology. They had very successful outcomes with both of those companies and they know how to scale this type of business, servicing this segment. That experience will also be highly relevant. It also is highly validating. They’ve seen the first and second generation technologies in this market and they’re making a bet on us as that third generation technology. That’s confidence building.”
In a blog post, IVP wrote about its history of investing in fleet management, as well as its investment in KeepTruckin.
"IVP has been fortunate enough to partner with some of the fastest growing SaaS businesses of all time including industry leaders like Dropbox and Slack. These businesses are extraordinarily rare, which is why IVP was shocked to find that KeepTruckin grew even faster than both companies at this stage," said the firm.
"IVP has evaluated thousands of different software companies, and KeepTruckin is one of the fastest growing software companies we’ve ever seen. This is a testament to Shoaib, Obaid, and Ryan’s vision, deep understanding of a market and customer empathy, and building to scale. We could not be more honored to partner with them for the next phase of growth! KeepTruckin on!"
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