CONNEXION Media has secured a strong new avenue into the local connected fleet vehicle market by reaching a deal with US-based services provider WEX Inc which operates Motorpass in Australia.

WEX has agreed to actively market a product based on Connexion’s Flex fleet management product to its 400 Victorian fleet customers.

The agreement comes only two months after the Flex product was launched by General Motors through its 4000 US dealers under the name Commercial Link.

Connexion chief executive George Parthimos expects to announce new deals both in Australia with fleet operators and on the world stage with at least one car-maker within six months.

The latest deal with WEX gives Connexion access to potentially 11,500 Victorian vehicles in a move that will strengthen the software developer’s position in the Australian fleet management market.

The fleet management system will be marketed to WEX fuel card customers as WEX Motorpass Telematics under a pilot program initially confined to Victoria.

The pilot program will run for six months and, if the take-up is encouraging, WEX Motorpass Telematics is likely to be rolled out as a national product.

“They (WEX) have about 500,000 fuel card users in Australia,” Mr Parthimos told GoAutoNews Premium.

“They are a big player, the biggest in Australia by a reasonable way. The next player comes in at 100,000 cards.”

Flex uses an on-board internet connection to transmit data on many aspects of a vehicle’s operation in real time. Apart from key fleet considerations such as position, distance travelled and fuel consumption, Flex can gather data on battery life, engine performance and average speeds.

Operators can also monitor driver behaviour and ask to be alerted if, for example, speed limits are broken.

Mr Parthimos said the WEX deal was similar to Connexion’s arrangement with GM in the US, where WEX does all the sales, marketing and promotion and Connexion provides the supply fulfilment and the call centre.

“It’s a nice distributor model for us,” he said.

Connexion has spent about $2 million in the past 12 months upgrading its backroom equipment and now has a system that can handle up to a million vehicles simultaneously.

Mr Parthimos anticipated the WEX deal would generate “strong revenues” for the company. He said it demonstrated the commercial viability of Flex and built on the validation of the product provided by General Motors in the US.

The Flex system is not reliant on any particular hardware in the vehicle itself, which means customers can connect to the internet any way they like.

“We don’t care what the hardware is, whether it be a dongle, whether it be a hardwired solution or an embedded solution,” Mr Parthimos said.

“We build the software as a service that sits over the top of it and takes in the raw data and makes it all meaningful.”

That is how the GM contract works.

“GM is building the hardware and telecommunications and all that stuff into its vehicles, but they needed a software provider that could do all of the backend, all of the computing and the software solutions,” Mr Parthimos said.

Mr Parthimos said the use of fleet management software was growing in Australia and he said the deals he had signed with some large companies – GM with Flex and Volkswagen with Connexion’s miRoamer infotainment system – had been important.

“The biggest thing that is resonating with our customers and our prospects is that we are a brand trusted by some of the largest brands in the world,” he said.

“When you are doing deals with GM and other auto-makers, Continental and the like, straight away you have that halo effect. That is opening up opportunities for us and we expect to announce further opportunities in the Australian market in the coming two quarters.”

Late last year Connexion revealed it was talking to nine car-makers about using Flex in their sales operations. Mr Parthimos said some of those discussions were reaching the final stages.

“Other auto-makers are now looking at embedded as well as aftermarket solutions and we were running trials with nine of them a year ago,” he said.

“Now we have got five that are progressing to the pointy end of discussions and, all things being equal, we hope to announce at least one additional auto maker by the end of the calendar year.”

Despite the success in landing GM as a marketing partner in the US, the demands of developing applications and customising the Flex software for use in “white label” situations where another company puts its brand on the product have depleted Connexion’s cash reserves.

At June 30, the company had access to only about $150,000 in cash. Connexion directors saw the cash crunch coming months before and organised a new cash raising of $5 million through the issuing of convertible notes. There is also around $1.6 million to be received for customisation work completed and a research and development refund of $2.4 million has also been booked after June 30.

The financial pressure has seen Connexion trim its head staff from 60 to 43. In addition, the company had brought some major development functions in-house and, all up, has reduced its information technology costs by 44 per cent.

“Our expectation is that we will be cash-flow positive by early in the 2017 calendar year, based on the subscription revenues we expect to get in and the customisation work we are doing,” Mr Parthimos said.

“We are bullish about where Flex can go but, really, we are relying on General Motors to ramp up their sales so we can provide the service beyond that.”

Mr Parthimos said GM had recently uploaded a video to the website gmcommerciallink.com that shows how the system works.

Connexion Media shares closed at 12 cents on Wednesday. That was down from a peak of 21 cents in early April.

By Ian Porter