As Relay Payments takes on incumbents in trucking payments, its CEO says the firm is on track to reach its goal of processing $1 billion annually by the end of this year.
Founded in 2019, Atlanta-based Relay currently serves about 250,000 carriers and drivers in the U.S. market with its electronic payments platform for trucking logistics. CEO Ryan Droege leads the company and his cofounder, Spencer Barkoff, is the company’s president. Relay has raised about $100 million in venture capital.
The company did $312 million in transactions in 2020 and $600 million in 2021. During a July 8 interview, Droege said the company will hit $1 billion at the end of this year.
Going up against incumbents like Wex and FleetCor Technologies, Relay aims to stand out with its technology and competitive pricing, Droege said. The total addressable market in the U.S. is about $500 billion, Droege said.
Wex has a “large, established” position in fleet payments and expense management, and continues to invest in technology and digital sales efforts, William Blair analysts said in a June report.
Incumbents such as Wex “represent very serious competition, just because their customer base is very long-term and very embedded,” said Cliff Gray, principal with Gray Consulting.
But Relay “will tend to win the deals where the technology and that automation and ease of use is the primary factor,” Gray said. Established players “have this old technology that can be a hurdle,” he added.
Making payments painless
Compared to consumer payments, payments in trucking can feel “a couple decades behind,” Droege said. Cash and paper checks are still used frequently in the industry. Paper-based payments can be cumbersome and time-consuming as drivers keep track of receipts while spending weeks on the road at a time.
Truck drivers are eager to keep driving and their hours are highly regulated, but “some of those older payment methods can take upwards of 40 minutes, to actually get that paper check all the way authorized and cleared and processed,” Droege said.
To address that inefficiency, Relay has taken a mobile-first approach with an app-based payment method that takes seconds, Droege said. The company recently launched an expense card that pairs with the driver’s mobile app and Relay account, which are tied to the trucking company’s software or accounting systems, he said.
“We’ll be really focused on continuing to add different partners and different value to that product throughout the rest of the year,” Droege said. Relay charges a per-transaction fee that Droege said varies widely depending on transaction size. He declined to provide a value range for the fee.
In trucking, payments “is an interesting problem,” Gray said. Truck drivers need to have “fairly powerful payment capabilities,” especially at a time when a truck’s fuel fill-up could cost between $400 and $600, he pointed out.
There’s a desire to strike a balance between the “liability of putting that kind of purchasing power in the driver’s hands,” with “the digitizing and making it painless for everybody,” Gray said.
Droege believes few payments companies have tried to tackle issues presented in trucking because “there’s still a logistics component that has a pretty big lift behind the scenes,” he said. “There’s a lot of details around the movement of freight or the reconciliation of those payments or how the funds move that are a little bit nuanced,” he said.
The current macroeconomic environment has the startup taking a more cautious approach to internal growth. The company has about 160 employees and will keep it at about that level for the remainder of the year, said Chief People Officer Amy Zimmerman.