This podcast was released in October 2023.
This is Matt Reustle and today we are breaking down WEX, a big fish in a less known pond. WEX is a leader in the fleet card market – they offer trucking businesses special credit cards which help secure advantaged rates on fuel among many other things. This is a business with a long history as WEX is headquartered in Maine, and really came to life in the 1980s.
To break down WEX, I’m joined by Mark Tomasovic from Energize Capital, a 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. Please enjoy this breakdown of WEX.
Show Notes
(00:00:00) – Introduction
(00:02:57) – (First question) – An overview of what WEX is and what they do
(00:03:50) – A summary of the market that WEX operates in
(00:05:59) – The history of the company’s creation
(00:08:53) – The importance of signing up large gas companies rather than retail locations
(00:11:33) – Value propositions behind providing fleet cards
(00:12:53) – How the economic model works for the cards
(00:13:48) – The percentage of spend equivalent to Visa or Mastercard
(00:14:31) – The difficulty behind switching from one fleet card provider to another
(00:17:05) – The role fuel prices play in the total revenue of the business
(00:20:09) – Threats to consider on the supply end of the business
(00:21:57) – Recharging at home and the process of receiving a credit
(00:23:06) – Other businesses WEX is involved in
(00:24:27) – A comparison between all of WEX’s businesses and where they direct focus
(00:25:13) – A look into their health and employee benefits line
(00:26:39) – The overall financial profile from a revenue and margins standpoint
(00:28:43) – How big players like Amazon or Walmart play a part in potential business
(00:30:02) – The threat of Visa or Mastercard entering the same space
(00:31:17) – Total amount of revenue generated from electric vehicle fleets
(00:33:27) – Electric charging locations and the process of building these facilities
(00:35:13) – Technology invested into creating faster charging stations
(00:35:50) – An overall look at risks for the business
(00:37:54) – Other parts of WEX that stand out
(00:40:10) – Lessons learned from studying WEX