FleetDrive 360 Revenue, Valuation & Funding (2024)

[00:00] Guys, this is a great story of a founder who built a tool for himself. He ran his own trucking company in Atlanta, had 20 trucks. He made 15,000 top line per truck, 5,000 net, ended up selling that business for a three x EBITDA multiple because he got excited about the software, the compliance software for trucking companies. He now has over 700 trucking businesses signed up, which equals 1,400 drivers. They pay on average $300 per year, but [00:24] that's just the recurring fee. There's another $300 per year they make per driver on one time fee. So call it around a million dollar run rate today. He's hoping to break 3,000,000 this year, up from 750,000 done in 2022. Hey, folks. My guest today is Om Karamchandani. He is the founder and CEO of a company called fleetdrive360.com. He's a tech leader with a track record of over twenty five years in the space, now working on this comprehensive [00:48] cloud based solution to manage FMCSA and DOT compliance. So explain that in a second. Om, you ready to take us to the top? [00:56] >> Sure. Yeah. Let's do it. [00:57] Okay. What is FMCSA and DOT compliance? [01:01] >> So every trucking company, they have to follow certain guidelines. FMCSA is Federal Motor Carrier Administration, and DOT is the Department of Transportation. So if you have a trucking company or you are driving a commercial vehicle on the road, you need to follow certain guidelines put by FMCSA. And what we have done is we have put together a consolidated one stop shop platform for all the trucking companies to basically [01:35] >> fulfill the requirement laid out by the FMCSA. [01:39] And and do you charge based off number of trucks they're managing or something else? [01:43] >> Number of drivers. [01:45] Oh, interesting. And so how many how many drivers are on the platform today? [01:50] >> So right now we have about 1,400, and we actually launched this product last year in August. And since then, we have been consistently getting about 200 to 300 customers every every month. [02:03] Okay. New customers per month. And is that new drivers or can one customer have 10 drivers? [02:08] >> One customer have multiple drivers. So we have few customers have ten, twenty, 15 drivers as well. [02:14] What does your largest customer have in terms of number of drivers? [02:18] >> So right now we have 17 drivers in one customer, but we are actually talking to three customers. One customer has 500 drivers, one customer has 2,000, and another customer has about 1,500. So those are kind of enterprise customers for us. And initially we were just focusing on the individual, you know, call owner operators, which is, you know, one single person driving the truck and those kinds of things. So we are focusing on that. Now we are [02:48] >> actually getting into enterprise space, which is more larger, bigger carriers. [02:53] And how many paying customers today? [02:56] >> So we have 670 or about 700 paying customers. [03:00] Wow. Okay. So 700 paying customers making up 1,400 drivers. So average of two drivers per one customer. So these are small mom mainly small mom and pops like types of driving operations. Last mile delivery, I imagine. [03:14] >> No. This is last mile plus the long haul, which is the first mile. And yeah, this is over the road. So you'll be surprised there are almost 4,000,000 drivers on the road that, you know, this is a TAM that we are targeting. [03:32] Is that in a specific geography or is that worldwide? [03:35] >> Just The US. [03:36] Wow. Okay. So where are you based? What state? [03:39] >> So we are in Atlanta, but we are actually catered to the entire US, United States drivers. [03:48] Okay, got it. So you're targeting 4,000,000 or at 1,400 right now, you've got 700 paying customers. You launched last year in 2022. Take me back to your first customer. How did you get that customer signed up and paying? [04:01] >> So, you know, I actually owned a trucking company myself. So I come from the technology background. I have done twenty five years of truck technology implementation, large, you know, products and stuff like that. And I started trucking company when I was doing the trucking company, I found this that there's no solution to actually manage your compliance. You know, seven out of 10 trucking companies go out of business because of the compliance issues. Either they are not [04:32] >> safe to operate or they have any compliance issues. Every [04:35] When you say you run a trucking company, like, can I like, how many trucks did you have on your balance sheet for your for your company? [04:41] >> 20 trucks at the top. [04:44] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect [05:07] your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [05:31] get a different valuation. A VC is gonna pay a different valuation, private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is [05:53] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're [06:19] going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if [06:41] you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the [07:07] interview. So you would actually buy the truck and then you have to make sure they're compliant to actually make money doing deliveries and driving. [07:14] >> That is correct. So you have to have a compliant drivers who actually do the drug and alcohol consortium. You also need to have the vehicle maintenance records. You also need to do a lot of additional things on the safety. You get a DOT inspection on the road, and if there's any noncompliance, they will flag you and then your safety scores will take a hit. So all those kinds of things. So when I was doing it, I [07:42] >> found that there's no one single solution available that a lot of service provider, what they were doing was they were doing manual, like Excel, you know, OneDrive kind of stuff. And I don't get visibility into my trucking company, you know, how I'm doing, you know, whether I'm safe, I'm compliant, I'm not compliant. And there was nobody could actually give me the services. So I created my own small system because every company has to go through the [08:09] >> audit first year within first year. It's called new [08:11] So when did you write the first line of code for fleetdrive360? What year? [08:16] >> 2020. [08:17] Okay. 2020. And then when did you bring on the first paying customer? [08:21] >> It was 2022. [08:23] But you were the first customer, right? [08:26] >> No. I sold my company, but I had a few connections, you know, my friends. Those started using and they really found it very extremely helpful. So they actually brought more customers for me. [08:39] Well, wait, real quick. I imagine my listeners are curious about the trucking company. So you sold your trucking company that had 20 trucks, [08:45] >> Yeah. [08:46] What what what what would you make an average month on one truck? [08:51] >> It's about, you know, you you can make about 5,000. [08:57] And that's net or gross? That's cash flow net or gross? [08:59] >> It's a net. [09:01] And what what about gross? [09:03] >> Gross will be about 12 to 15,000. [09:06] Interesting. And then the and then the 10 k of expenses, those are things like licenses, paying the driver, all that kind of stuff. [09:13] >> That is correct. Yeah. It depends, you know, if you have a, you know, there's there's two kind of things. One is a spot market where you actually go on the load mode and get the loads. Other one is the, you know, contracted rates. You can make the gross revenue anywhere from 12,000 to 25,000. And when COVID hit, it was like even going up to 30,000 a month. [09:36] So these 20 trucks that you owned were all based in Atlanta? [09:41] >> Yeah. My office was in Atlanta, but they were going all across The US. So [09:46] Did you did you employ 20 drivers full time on your payroll? Or did you let them rent your trucks and then they could do what they wanted? [09:53] >> They were my employees. [09:54] Interesting. Okay. So then where would you get orders from? Like, would you know you needed to take a delivery to Illinois? [10:02] >> So there are brokers, and they're called the freight brokers. They basically [10:07] are top three? [10:11] >> JB Hunt, then TQL, then RCL C. H. Robinson. Those are the five. [10:19] I'm gonna interview. I'm gonna go get all of them. I'm gonna interview all of them. Okay. So you get your your deal flow, your sales from these freight brokers, and then that and then you deploy your drivers, your 20 drivers. [10:29] >> Right. [10:30] Interesting. Interesting. Now can you finance the trucks? Like, will will someone give you a loan for you to buy the truck and then? [10:35] >> Yeah. So I was leasing most of my trucks and only own few trucks because leasing, I have to, you know, not worry about the maintenance and truck, you know, repairs and everything. Our leasing company takes care of those. So I was leasing rather than buying, but a lot of [10:52] >> people So that's included. [10:53] That lease cost is included in the 10,000 monthly expense per truck. Right? [10:57] >> That is correct. [10:58] Okay. Okay. Then you said you sold this. Again, I only know b to b SaaS. How does a trucking company get, like, what you had get valued? [11:07] >> So it's normally the EBITDA, three to five times of EBITDA. [11:13] Okay. [11:14] >> Depending [11:15] If on you're making 5,000 net per truck, multiplied times three x, you sold your company for something like $15,000 per active truck. [11:22] >> That is correct. [11:23] Yeah. Okay. So 15,000 times 20 trucks, you sold it for around $300,000, something like that. [11:28] >> That's correct. [11:29] Why sell it? [11:31] >> Yeah. Because I wanted to focus on the technology because I found there's a gap there and this can scale because I cannot scale my trucking company to a thousand trucks, right? It's always a lot of overheads running a trucking company, you know, drivers, you know, insurances, accidents, and stuff like that. But this solution, because I saw that people liked it. So I'll tell you one thing. When I did my first audit with FMCSA and the auditor [12:01] >> came and he liked my solution so much. He said, you know, I wish everybody had this. And that's when I started thinking, you know, I should build it. [12:09] That's amazing. Okay. So what do customers pay you on average today at fleetdrive360? [12:13] >> So we have multiple products. We have subscription also to our platform, but then we also have annual recurring products. Then we have one time also. Like, you can do in app purchases. [12:25] So just looking at the recurring revenue, how much is that? Like, would you say per per customer? [12:30] >> About 300 per hour. [12:32] Per year or a month? [12:33] >> Per year. [12:33] Oh, wow. Okay. So, I mean, can I take 300 times 700 customers? You're doing $210,000 a year? [12:39] >> That's the recurring monthly. Right? Yeah. But it they they pay by the driver. So we have 1,400. So 1,400 times 300. That's what you would do. [12:50] Oh, so you're doing like 400,000, 500,000 a month in recurring revenue a year in recurring revenue? [12:55] >> Yeah. It's based on the drivers, the number of drivers. So every driver, there's a recurring fee on the platform. [13:01] So if you're doing about five you're, you know, you're doing about [13:06] 35, $40,000 a month right now in recurring revenue, but it's annualized. [13:10] >> 500 k, 400 k a year. [13:11] How much on top of that do you make off like one time fees and things like that? [13:17] >> So average sales to customer today is about 500 to 600, and out of which 300 is recurring, which will go towards a recurring, and then rest is one time. [13:29] So it's sort it's like a fifty fifty split? [13:31] >> Yeah. Would say. [13:32] Yeah. Yeah. So did you well, you do you'll do more than a million dollars in revenue then over the next twelve months? [13:37] >> That is correct. Yeah. So That's awesome. 2023 yeah. 2023, we are targeting actually 3,000,000 with all these big customers like enterprise customers. So right now, our platform can cater three categories. One is the small carriers, which is mom and pop shops. Then second one is the service providers like, you know, I was using a service provider who was doing compliance for me. They have their own customer. They can use our platform to support their customers. And [14:05] >> the third one is enterprise, big companies like, you know, J. B. Hunt or any big, you know, trucking company has 1,000, 2,000, 5,000 trucks, they can use our platform as well. [14:18] And if you're targeting 3,000,000 this year, what did you finish within 2022? [14:24] >> 2022, we finished with about 700 to 800. [14:27] Okay. But we started only half of the year. [14:30] >> Right? You know, we only did from the yeah. [14:34] We'll say 750 there. And so have you bootstrapped all this or have you raised capital? [14:40] >> It's kind of bootstrapped, but we did do the debt financing. And, you know, we raised 250 k debt and then also 250 k initially, you know, at 6,500,000 valuation. [14:55] So as your pre seed round? [14:57] >> Yeah. Kind of. [14:58] Interesting. And and when you raise the dilute the debt, what is the interest rate that you pay on that? [15:06] >> I don't remember. Sorry. I I think it's prob probably in the 10 eight or 10 something. [15:12] How much time do you have to pay it back? [15:15] >> I think we have about three years, three to five years. [15:18] Three years. And was this from a bank or a government or an individual? [15:21] >> No. It's just a private private private owner. [15:24] Oh, so it's like a friend of yours that's rich or something? [15:26] >> Yeah. Yeah. Yeah. [15:27] Oh, I see. Why did he or she wanna give you debt instead of equity? [15:33] >> Because they didn't know much about, you know, so I think it was 50-50. So I told you, right, 250 was for the equity and 50%, you know, 250 they gave on the interest. They just wanted to balance it out. [15:45] Okay. Well, that's good. That helps you save a little bit of equity. [15:47] >> Right. [15:48] How has the debt worked for you? Has it has it been good? Will you do more debt in the future, you think? [15:52] >> I would do the debt in future for sure. [15:55] More than equity? [15:56] >> More than equity. [15:57] Why is that? [15:59] >> Because I think when we start, we know that where we can take this company to, right? You know, right now it's growing and it's growing very fast. So even if I have to give up, you know, a certain percentage of equity, I know it's much more valuable three years from now, which, you know, I can end cash anytime. [16:18] Yeah. Yeah. Well, Founderpath's got a $150,000,000 fund and all we do is non dilutive capital to SaaS founders. So we could give you up to 50% of your ARR at a rate a discount rate, something between 7-12%. So we'll chat afterwards. I'd love to help you out. [16:34] >> Sure. That's awesome. [16:35] Alright. Alright. Tell me more about your teams today. How many folks are full time? [16:39] >> So we so I, you know, we have an offshore development center in Bangalore. My other company like Metromex, we do a lot of IT and BPO. So we have about seven people developers. We have seven or eight salespeople onshore in US. And then we have about six or seven operations folks. [17:01] Okay. So like twenty twenty two people, something like that. Six of them offshore DevShop. Okay. Yeah. This makes ton this makes tons of sense. Now let me think. What else am I missing here? I mean, how do you go from how do you go you mentioned you're adding 200 to 300 customers per month right now. That's incredible growth. How are you adding customers? [17:20] >> It's primarily cold calling. So we get the data of all the new companies that get registered. We cold call And how do get that data? [17:28] Is that public? The government you're required from a government directory? [17:32] >> There are third party companies who actually, you know, provide access to the data and they collect all the data from, you know, different sources. [17:40] What's the name of a a day a truck data company that you can get a lot of this data from? [17:45] >> I would say one name that I know is Carrier four one one. [17:49] Carrier what? [17:50] >> Four one one. [17:51] Oh, carrier four one one. And they'll tell you, like, how many new truck companies are registered in California in the past thirty days? [17:59] >> That's correct. [18:00] And then you get their phone number and just call them and say, let's make sure you're compliant. It's a $300 a year per driver. [18:06] >> Yeah. And it's mandatory. Right? Because they they also know that once they get into the trucking industry, they need to do the compliance as as as part of it. Within six months, they're gonna get audited. And if they don't have the information, they will be in a kind of shutdown operation or they will have, you know, certain. [18:26] So if this is required, imagine there's a of companies doing this. Who's your biggest competitor? [18:30] >> So I would say JJ Keller and Foley Services. Those are my competitors, but they don't Sorry. Name the s [18:38] Say the first one again. What was their name? [18:39] >> JJ Keller. [18:42] JJ Keller. Interesting. Okay. [18:44] >> And Foley Services, f o l e y services. [18:48] Okay. So no are they software as well or no? [18:52] >> They have a little bit of platform, but it's more manual. You know, they just manage the processes, but not the platform. [18:58] Yeah. Well, listen. This is a heck of a story. We hope you hit your 3,000,000 target this year and hit that big growth rate and stay, you know, keep using non dilutive capital to keep your equity. Om, we're out of time here though. Let's wrap up with the famous five. Number one, what's your favorite business book? [19:12] >> Zero to one. [19:14] Number two, is there a CEO you're following or studying? [19:17] >> My all time favorite is Steve Jobs. But I right now, I'm following, you know, Warren Buffet. [19:23] Number three. What's your favorite online tool for building fleetdrive? [19:28] >> So we use the Microsoft team a lot. [19:30] >> Yep. [19:31] Number four. How many hours of sleep do get every night? [19:34] >> About five or six. [19:36] And situation, married, single kids? [19:39] >> Married with two kids, one in college, one in high school. Two teenagers. [19:42] That's amazing, Om. And how old are you? [19:46] >> I'll be turning 50 this this August. [19:48] Very cool. So 49 years on young. Last question, something you wish you knew when you were 20. [19:53] >> I should have started when I was in 20. I started very late. [19:58] Guys, this is a great story of a founder who built a tool for himself. He ran his own trucking company in Atlanta, had 20 trucks. He made 15,000 top line per truck, 5,000 net, ended up selling that business for a three x EBITDA multiple because he got excited about the software, the compliance software for trucking companies. He now has over 700 trucking businesses signed up, which equals 1,400 drivers. They pay on average $300 per year, but [20:22] that's just the recurring fee. There's another $300 per year they make per driver on one time fee. So call it around a million dollar run rate today. He's hoping to break 3,000,000 this year, up from 750,000 done in 2022. It's fleetdrive360.com. One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try [20:47] and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday, 1PM Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here [21:12] on YouTube, the big red button, and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community [21:35] for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up for that @nathanlatka.comslashslack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. 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