Business Breakdowns
Episode 131 WEX: Fleet Cards
Business Breakdowns

Episode 131: WEX: Fleet Cards

Business Breakdowns

Episode 131

WEX: Fleet Cards

Mark Tomasovic is a principal at Energize Ventures. We cover the history and value proposition of the fleet card model, what WEX has in common with marketplaces, and the impact of EV charging infrastructure CapEx on its business.

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(00:02:17) - (First question) - An overview of what WEX is and what they do

(00:03:10) - A summary of the market that WEX operates in

(00:05:19) - The history of the company’s creation

(00:08:03) - The importance of signing up large gas companies rather than retail locations

(00:10:53) - Value propositions behind providing fleet cards 

(00:12:13) - How the economic model works for the cards  

(00:13:08) - The percentage of spend equivalent to Visa or Mastercard

(00:13:51) - The difficulty behind switching from one fleet card provider to another 

(00:16:25) - The role fuel prices play in the total revenue of the business

(00:19:29) - Threats to consider on the supply end of the business  

(00:21:17) - Recharging at home and the process of receiving a credit

(00:22:26) - Other businesses WEX is involved in

(00:23:47) - A comparison between all of WEX’s businesses and where they direct focus

(00:24:33) - A look into their health and employee benefits line 

(00:25:59) - The overall financial profile from a revenue and margins standpoint

(00:27:03) - How big players like Amazon or Walmart play a part in potential business

(00:29:22) - The threat of Visa or Mastercard entering the same space

(00:30:27) - Total amount of revenue generated from electric vehicle fleets  

(00:32:47) - Electric charging locations and the process of building these facilities

(00:34:33) - Technology invested into creating faster charging stations

(00:35:10) - An overall look at risks for the business

(00:37:14) - Other parts of WEX that stand out

(00:39:30) - Lessons learned from studying WEX

 

WEX: Fleet Cards

Introduction

Matt
This is Matt Russell. And today, we are breaking down a big fish in a less-known pond, that is WEX. WEX is a leader in the fleet card market. And to put it simply, they offer trucking businesses special credit cards, which help secure advantaged rates on fuel among many other things. Now this is a business with a long history. WEX is headquartered in Maine, and they really came to life in the 1980s. To break down WEX, I'm joined by Mark Tomasovic from Energize Capital, multiple-time guest on Business Breakdowns. We get into the history of this industry and how WEX found a very creative way to accelerate adoption within this market.

History and Overview of WEX's Business

Matt
So what this core product is a fleet card. And when you think about a fleet card, what that is, is it's a credit card that fleet operators can use for buying fuel. So everyone from your delivery truck driver all the way to the vehicle that your plumber uses for driving around to various homes. They all buy their fuel from your local retail gas stations. And with a fleet card they can access certain negotiated prices and then the fleet operator can actually manage spend.

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