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Technology companies that specialize in trucking-related services made two announcements that may significantly impact the industry.
Lytx Inc., the San Diego-based company whose systems monitor commercial vehicles with cloud-based video technology, has received a new investment from London-based private-equity firm Permira. The announcement was made Jan. 8.
With the $1 billion investment, Permira will have a majority stake in Lytx, along with the Canada Pension Plan Investment Board and GIC Private Ltd.
Lytx officials told Transport Topics the new investment increases the value of the company to more than $2.5 billion.
Meanwhile, on Jan. 9, Trimble Transportation and Logistics of Sunnyvale, Calif., said it had reached an agreement to acquire Kuebix, a leading transportation management system provider, and creator of North America’s largest connected shipping community. Kuebix is based in Maynard, Mass, a Boston suburb.
Lytx provides cameras, sensors and software to more than 3,000 fleet operators, including long-distance trucking operators, food-delivery vehicles, waste haulers, transit bus systems and private motorcoach companies. Among its customers are Walmart Inc. and Waste Management Inc.
“Permira is a leading technology investor globally and has a proven track record of helping companies build and grow their businesses over the long term,” Lytx CEO Brandon Nixon said in a statement. “With their expertise and the capital from this transaction, Lytx is poised to accelerate product innovation, make strategic acquisitions, expand globally and further lead the digital transformation of fleets worldwide.” Lytx was founded in 1998 as DriveCam Inc. In late 2013, the company changed its name to Lytx. Clients pay subscription fees to monitor the video, machine vision and artificial intelligence technology to flag risky driver behavior, anticipate driver distraction and have access to the company’s database of more than 100 billion miles of monitor operations.
Officials say customers using Lytx’s video system can see 50-80% reductions in their insurance claims.
“We feel like this just validates all of the work — and I’ve been here 12 years — that all of us have been doing to build this company and to try to make the roads safer,” Adam McCarty, Lytx’s vice president of growth initiatives, told TT. “It’s not just about putting cameras into vehicles. It’s about wrapping a service around that, which allows the customers to get the most value out of that device.”
Company officials say the capital infusion will allow Lytx to grow in an industry in which there is significant room for expansion. Industry research firm Frost & Sullivan estimates 1 million vehicles have some video telematics technology installed. But that’s less than 1% of the more than 125 million commercial vehicles on highways and roads worldwide.
The majority of Lytx’s business is in the U.S., and this deal will give it room to grow domestically and in international markets. “We’ll be using the funds to expand into geographies, to expand the level of services, product innovation, likely mergers and acquisitions. Those are probably the big bucket items we’ll be using,” McCarty said.
McCarty said more than 100 companies in the industry are doing similar work, and this investment by Permira will give Lytx a distinct advantage in the marketplace.
Lytx has an estimated 650 employees, and officials say the current executive management team will remain in place.
Meanwhile, a senior official with Trimble says tapping into shippers’ and carriers’ expertise will help enhance the industry supply chain.
“A lot of people are coming up on the shipper’s side, or the carrier’s side, but no one is really bringing both together on a common platform. So we have both at the same time,” Trimble Transportation Senior Vice President James Langley said.
“You get deep domain expertise on the shipper’s side with the Kuebix team. You get deep domain expertise on the carrier’s side with the Trimble team,” he said. “So you are combining both the domain and the connections to the different members of the supply chain, all at the same time.”
Financial terms were not disclosed for the transaction, which is expected to close during the first quarter.
Trimble’s network of private fleet and commercial carriers represents more than 1.3 million commercial trucks in North America, and the statement says combining with Kuebix’s community of 21,000 shippers will create a new platform for planning, execution and freight demand-capacity matching.
“Now we’re hooking up with the infrastructure that Trimble provides from the carrier side, and they are bringing this to a common platform. It is super exciting, and I could not have envisioned a more strategic and better partnership with a successful company than with Kuebix,” Kuebix founder and President Dan Clark told TT.
Clark and his senior management team will continue to operate the company under Trimble.