World Leader in Fleet Management and Telematics Enters the US Market
By Rowan Philp
Cartrack Holdings – the leading global provider of vehicle fleet management and insurance telematics – is expanding its operations into the United States, following rapid growth in Asian, European and African markets.
Launched in 2004 as a stolen vehicle tracking and recovery service in South Africa, Cartrack has since leveraged its pioneering GSM and web-based technologies to help companies in 21 countries optimize their fleets, supply chains and workforce.
Its insurance telematics have been credited with reducing both loss ratios and even road accidents, by allowing insurers to manage driver behavior, and sending reports to clients in real time – an industry differentiator.
Meanwhile, the potency and customizable nature of its technologies have recently generated news headlines, with its systems now also used to accurately monitor individual prison parolees – under individual sentencing restrictions – in Singapore, which has sparked interest from Interpol.
In an interview with BPI and SABLE, Cartrack CEO and founder Zak Calisto said: “We are ready for our US expansion. We are one of the leading and largest players globally. I believe that we compete very favorably on our technology offerings but understand that we need to have a great team to succeed.”
Calisto said business infrastructure had already been established in the US, and that it was now seeking an energetic American CEO to lead its market entry and growth.
Industry analysts have praised Cartack as one of the most globally competitive technology companies ever to hail from Africa, and a model for newcomers.
In South Africa, the performance of its tracking technologies – with a 94% stolen vehicle recovery rate – has been such that the company makes the unprecedented offering to customers of a cash-back warranty for unrecovered vehicles.
However, Calisto said the increasing need among companies to optimize fleet and human resource efficiencies, while reducing insurance costs, would likely drive growth in the US.
In a recent outlook report, the company stated: “This is a dynamic industry to be part of, and, with the recent high growth experienced being projected to continue globally at almost exponential rates, the future augers to be exciting and rewarding. Cartrack is well positioned through its proven technology and service, scalable system platform, low cost base and increasing footprint to take advantage of this trend, using the SaaS delivery model.
Q&A with Cartrack CEO Zak Calisto
What is Cartrack?
South Africa was a pioneering country in the global telemetry industry field due to the high crime rate.
In 2004, a small team and I launched Cartrack and since inception we have had exponential growth on all fronts: Subscribers, Revenue and Profitability. We have consistently grown at over 20% year on year. We listed on the Johannesburg Stock Exchange in December 2014.
We operate in 21 countries and have close to 500,000 subscribers. 84% of our revenue is subscription (i.e annuity) based.
The industry of vehicle telematics started as a function of recovering stolen vehicles but has since moved on to include fleet optimization due to the availability of faster and more affordable data transmission networks and equipment. Today the SVR function is quickly becoming just a much needed add on to our service and product offerings. However, the technology and operational methodology used in SVR (Stolen vehicle and Recovery) is significantly different from the technology and operational methodology used in FM (Fleet Management). In relation to pure Fleet Management, Stolen vehicle and Recovery poises significantly higher barriers to new entrants into a market. Fleet Management today has also become exceptional sophisticated in optimizing both the workforces and fleets for companies.
What is telematics and how is it used in vehicle tracking and fleet management?
Telematics is when data is collected from any asset and such data is transferred wirelessly to a central computer for data processing.
So, we collect raw data from all types of movable assets and then turn it into useful intelligent information for companies to be able to optimize both their assets and workforces. Further, we also calculate risk and have systems to ensure loss control for both companies and individuals.
We have products and services that we provide in high crime areas like Southern Africa where we experience a vehicle recovery rate of over 93% on stolen and hijacked vehicles. In places like Europe, where vehicle theft is less sophisticated, our recovery rate has been 100% by just using our conventional fleet management technology.
Cartrack has the ability to bring to the market new technology in record timing and is continuously evaluating the market demands. Above this, due to our internal efficiencies and our scalable platforms, we are able to deliver real value for money to our clients.
It all started in South Africa. So being an industry veteran, we probably have some of the best systems and platforms to leverage on. Our business is really tracking and data management for our clients.
Why are your goals for the US market - and how does Cartrack compare with existing competitors?
The real opportunity in the USA is both the market size and the abundance of good human capital.
We are one of the leading and largest players globally. I believe that we compete very favorably on our technology offerings but understand that we need to have a great team to succeed. We are known to be game changers.
The US market and business ethics are in keeping with the types of markets that Cartrack finds most desirable, in terms of market growth. We also see the opportunity to tap into an abundance of good human capital and into companies who drive global growth.
We are ready for our US expansion. We are currently interviewing for a USA CEO who understands the US market, and is aligned with our senior executives.
Methodical growth is definitely the model we will follow in the short term. Once we have a solid team, we will undoubtedly look for a more intense expansion.
What characteristics would you look for in a CEO for the USA?
A 30 to 40 year old with a very strong financial education and an exceptional understanding of the US market. Someone with very actionable ideas, who takes full responsibility for every aspect of the business. Above all, a good, motivating leader.
What are some of the lessons you have learned from your recent listing on the Johannesburg Stock Exchange?
We have always had an exceptionally fast moving corporate culture with strong governance and ethics. We value that even more, having seen how other newly listed companies have to struggle to get it all in place.
If we take the IPO issue price of ZAR8.50 and dividend payment we have performed exceptionally well, irrespective of which currency we are measured in.
Cartrack is actively involved in charitable causes. Can you elaborate on some of these initiatives and why you think it is important for corporates to get involved with such causes?
We have an education fund and we provide assistance to finding missing children. Both these charitable functions are key to the future of our societies. I believe that corporates need to be aligned with their local governments to assist local communities.
Where do you see Cartrack holdings in 5 or 10 years’ time?
We continue to see robust demand for our services. As the uses and application of software-as-a-service increase globally, and our service offerings are evolving year on year, we see the hugely untapped market becoming bigger every year. In short, we are very bullish.