TIMIA Capital recently provided a US $3 million investment facility to Fleet Hoster, a McDonough, Georgia-based company that distributes products like dash cameras and asset trackers and develops software solutions for the fleet management industry.
About Fleet Hoster
CEO of Fleet Hoster Michael Head was a software developer when he realized the potential of developing value-add software solutions for fleets in the Geotab network. Michael attended several industry conferences and partnered with an industry leader, Frank Pellitta with Assured Telematics Inc., to understand how other partners in Geotab’s network were building their businesses and the idea for Fleet Hoster was born.
Fleet Hoster was established in 2013 and soon became the number one developer in the Geotab network. Through word of mouth, the company’s reputation grew—as did the number of services it provides—and today Fleet Hoster serves as a partner and solution provider to many fleets of all sizes.
Building the Business Sustainability
Michael worked alone in the beginning, creating a solid product for the Geotab marketplace. “Hiring that first employee was difficult for me,” he said. “It’s scary to feel responsible for someone else’s livelihood. But once I took that step, it really opened doors and helped us move faster.”
Eddie Gonzalez, Chief Sales Officer, joined the team in 2017 to help build and manage Fleet Hoster’s asset tracking solutions. This kicked off the recurring revenue part of their business. Kyle Setzer, Chief Operations Officer, joined the team in 2020 to help build the marketing, support and operations side of the business. Now Fleet Hoster has a team of 25-30 people and the solutions portfolio—and sales revenue—have grown in tandem. “We work hard every day to help make our customers and partners successful which in turn drives the success of Fleet Hoster”, said Michael.
“Our model of stocking inventory and shipping hardware the same day/next day is really unique in the Geotab environment,” explained Michael. As a result, Fleet Hoster has become a trusted partner to Geotab and is helping build its business with wireless carriers like T-Mobile, AT&T, TELUS, US Cellular, etc.
The wireless carriers love Fleet Hoster as it helps them close small and large deals with ease. “The wireless carriers are trying to sell phones to a fleet and usually want to add dash cameras, asset tracking or additional fleet services. They call us because we’re the experts,” said Michael.
The wireless carriers represent a tremendous growth area for Fleet Hoster with their continued focus on the channel. Through consistent hard work, expertise, and investment in assisted sales and support they have rapidly grown market share in this channel. Fleet Hoster benefits from the recurring revenue from the software portion of the hardware deal.
Finding the Right Growth Capital Partner
Michael first came across TIMIA Capital on LinkedIn. He was looking for an investment partner that could provide a sustainable option to keep working capital in the business. The company had grown 1,000% in three years and had previously taken some fast cash loans to fuel inventory and growth.
“Short-term loans end up being very expensive and inefficient. Since we are consistently doubling the inventory required, we need a more sustainable long-term solution. That’s when we found TIMIA,” said Michael.
Partnering with TIMIA Capital made great business sense. Michael researched some other portfolio customers working with TIMIA and saw that Fleet Hoster was on a similar growth trajectory. TIMIA’s innovative investment facilities were a good fit.
Plans for TIMIA Investment
There are three growth areas that TIMIA’s investment will help drive.
Firstly, Fleet Hoster will order inventory to address supply chain problems. “3G technology is sunsetting in early 2022 so asset trackers need to be replaced with LTE equipment,” explained Michael. With numerous chip shortages, ordering stock in advance will help Fleet Hoster meet the expected demand for hardware upgrades.
Secondly, the investment will fund some new areas of growth. Fleet Hoster has created a new dash camera solution called FleetFlix and will be marketing it with resellers and wireless carriers. The team is also building a cloud-based AI processing solution for camera data that will work with any existing fleet camera solution while providing new analytics tools—further adding value for fleet management customers. Fleet Hoster signed a deal with KeepTruckin to create a fuel card integration that will open more recurring revenue business.
Finally, Fleet Hoster aims to expand its team by hiring sales and support staff to handle the additional work from the Geotab network—especially with the wireless carriers. Fleet Hoster has expanded channel sales of its telematics solution through Geotab to the carrier networks. Fleet Hoster is shoring up its sales and support teams to deal with the additional deal volume expected through this sales channel in 2022.
Long-Term Plans for Fleet Hoster
Michael and his team have built a solid business in a deliberate, sustainable way—with no venture capital. He intends to continue building cutting-edge solutions for his market and remain ahead of market and supply chain trends.
“We just released our new camera and software which has been very favorably reviewed. The camera software is a big part of our long-term growth plans and could really quadruple our recurring revenue business,” said Michael.
The company surpassed $5 million in annual recurring revenue toward the end of 2021 and intends to grow its recurring revenues to $12 million in 2022.
If growth continues at this pace, the team might be swamped in acquisition offers. And since Fleet Hoster was bootstrapped from the beginning, it will likely have an excellent outcome for everyone involved if they do eventually decide to sell!
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