Web based tracking and fleet management - Established business with turnover.

by Valentino Bugatti
(Spain)

Galileo Satellite Control Systems S.L.L. is in the tracking and fleet management business, and our main asset is a web based platform which we consider to be the best in the market.

As is the case with most healthy start-ups after the first year of operations, we have a situation where our turnover now almost meets severely watered down expenses.

We have about 40 clients and about 2600 vehicles paying monthly fees. We project 3000 to 3500 by year end and in 2014 we will see 6000 to 10000 vehicles reporting in an international arena.

We already have Agencies in Philippines and Morocco, as well as direct clients in UK, France, Holland, Argentina, Mexico, and Singapore where the system works seamlessly.

We have invested about 300,000€ actual cash over the past four years, which includes as I mentioned the bare minimum operations costs and remuneration to the partners and founder staff.

Depending on the investment and the partner, we are prepared to give up a small part, and up to a controlling interest, to the "ideal" partner.

The "ideal" partner will provide a strong established multinational commercial network as well as technical support, and a little operating capital... in that order of priority. – Maybe a telecom company… or a GPS hardware manufacturer… an Insurance company…

We don't object to a clean start JV where the current company contributes its client base, know-how and assets, and the investor his commercial network, tech support and say a year of op costs defined by business plan. We think this might be the cleanest way to start rather than to concede a percentage of the existing Spanish SLL company which possibly has some social or fiscal obligations which would not benefit a partnership.

The investment we seek will be a minimum 150,000€ to be spent over several months in developing a commercial team and the corresponding materials to sell the product. This is modular. We would like to do it for several countries at the same time, but can step the process too. The investment will also permit us to hire the resources to expand our R&D team so as to grow the hardware base which reports to our platform. This will allow us to offer our services to firms which already have fleet management hardware, but antiquated interfaces… (huge market potential) – and in the short term to mobile devices, smartphones and tablets.

We would be prepared to give up about 20% of the JV for those minimum indicated funds… more if they come with other value ads.. such as the technical support, and the commercial network we seek.

Our monthly operating costs in Euros are at present are 8K to 10K. They will increase to 15K to 18K with the added staff and operations costs the business plan project. There will be an increase in turnover almost immediately. The investment is projected to cover a year of "worst case scenario" operating costs.

If the partner requires a controlling interest we would consider this if they hold a similar view of the future as we do, value our contribution, and commit to our continuing to be involved in management of the company unless serious mistakes are made (by us).

I have little experience with these kind of dealings. We do have a business plan we have updated each year. We have (unaudited) accounts. I presume that before going to that stage, to be sure we are not wasting each other´s time, and we would need to sign some kind of agreement regarding any fees, non-disclosure, confidentiality… etc.

I look forward to any comments.