An old proverb says the road to Hell is paved with the bricks of good intentions. So if this is true and you’re going there on business anyway, you might feel a little better if your company kept track of your progress with the new Internet and wireless GPS system from @Road. OK, maybe you won’t feel any better, but your boss will.
@Road’s first product, FleetASAP, is a patented system consisting of a vehicle-mounted GPS (Global Positioning System) receiver with a wireless connection to the Internet that allows a company to monitor the position of its trucks or other mobile employees and to communicate with them via interactive text-based messaging.
While the system could eventually migrate downward into passenger vehicles and rental cars and upward into long-haul trucking, @Road has targeted the short-haul and regional markets for fleets of vehicles — mostly delivery trucks and school buses — in major metropolitan areas. In addition to making it easier to track deliveries, it could also be used to direct pick-ups, deliveries and customer service to dispatch the vehicle closest to a customer. Consumers on the road could find the closest golf course, pizzeria or Kinkos.
@Road and its financial partners estimate that the fleet market targeted by the company is $3 to $4 billion per year.
FleetASAP is elbowing its way into a crowded market with big public company players such as Qualcomm (QCOM), Highway Master (HWYM), GPS pioneer Trimble Navigation (TRMB) and Orbital Sciences Corp. (ORB) as well as private firms including Newcomb Communications and NavSys.
But @Road is undaunted by the white line scrimmage because of its broadbased patent consisting of 44 sub-claims and the operational and cost advantages that derive from them. To begin with, @Road is the first to use the Internet for tracking rather than a more expensive proprietary system, and their wireless link uses Cellular Digital Packet Data for transmissions which is five to seven times less expensive than the standard cellular or satellite-based systems used by competitors.
This allows @Road to sell its service for $39.95 per month for each vehicle plus a one-time $249 purchase of the onboard hardware. By contrast, Qualcomm and Highway Master sell onboard hardware starting at $2,500 and the monthly service from $70 to $100.
The company currently has about 100 customers including Pepsi and the San Francisco public schools — operating about 1,000 vehicles using FleetASAP.
The company’s patented idea created by founder (now Chief Technology Officer) Rod Fan attracted its first round of financing — $3 million — in 1996 from Orient Semiconductor Electronics, the Taiwan-based manufacturer of @Road’s hardware. Its initial financing illustrates a tactic that should probably be considered by more start-ups: getting the funding from its main supplier which not only understands the technology better than pure financial sources, but which has an even bigger vested interest in the new company’s success.
A second, $6 million round was completed in October 1998 and a $23.2 million round (which they hope to be their last) this June. In addition to OSE, @Road’s funding syndicate includes Alex Brown Capital and Galleon Management which led the most recent round, BancBoston Robertson Stephens, U.S. Venture Partners, Institutional Venture Partners, Crimson of Asia, Venture Law Group, Alliant Partners and Morgan Stanley.
@Road’s well-funded and patented efforts means it is likely to be rocking down the highway over the next few years, even if it means leaving the big players crying in their beer.
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