GreenRoad’s focus is to improve driver safety and significantly reduce crashes and fuel consumption. The company uses technology to change human behavior, encouraging people to make better choices about their driving. GreenRoad’s flagship service is the GreenRoad Safety Center, which combines in-vehicle technology with integrated web applications that rate driving skills and behavior, train drivers in real time by providing feedback as they drive, and sustain behavior improvement through continuous reinforcement.
GreenRoad was born out of a desire to solve a real-life problem experienced by the founders, Hod Fleishman and Ofer Raz. Hod and Ofer met at the Bezalel Art and Design Academy in Jerusalem. One night, Ofer was almost run off the road by some teen drivers. After this experience, Ofer set to work with Hod to create GreenRoad, with an aim to alter driver behavior, which is the reason behind 95% of crashes.
The founders carried out rigorous and systematic testing of algorithmic models with research partners and fleet vehicles to understand the complex interrelationships between driving style, crash rates and the role that different types of feedback – both real time and historical – plays in changing safety outcomes. While the initial goal was safety, they also realized that safer driving patterns also resulted in greater fuel efficiency.
Ofer and Hod forged partnerships with leading Israeli researchers and a partnership with Or Yarok, Israel’s largest auto safety organization, launched the company’s first commercial deployment, which was expanded to 5,000 drivers.
In 2006, after six years of extensive testing and more than 1 million driver trips, the Safety Center service was proven to be effective, particularly with the multi-billion commercial fleet industry, including trucks, buses and automobiles. GreenRoad Safety Center was launched along with the commercial expansion of the company in 2007.
Hod is now Chief of Safety, while Ofer is the company’s CTO. Dan Steere, CEO, joined GreenRoad from Benchmark Capital. Steele has over 20 years of experience in consumer and enterprise services, as well as mobile computing. The GreenRoad management team is global, with a presence in the US, the UK and Israel.
In January 2008, GreenRoad closed a $14.5 million Series B led by Virgin Green Fund, affiliated with Sir Richard Branson’s Virgin Group. In July 2008, Amadeus Capital joined current investors in contributing to a $17.5 million Series C. Since 2006, previous investments have been made by Benchmark Capital and Balderton Capital for undisclosed amounts.
An early adopter of the GreenRoad Safety Center was T-Mobile UK, who saw the opportunity to dramatically reduce its road crash rate by invoking the service. The company found that the technology more than paid for itself in just 12 months through lower crash costs, fuel savings and reduced staff sick days. T-Mobile achieved a 49% reduction in vehicle repair costs and a 20% reduction in crash rates and reduced vehicle wear and tear, resulting in initial savings of £437,000 ($830,000) or over $3,000 per vehicle in calendar year 2007.
GreenRoad, focused on prevention, avoids ‘Big Brother’ tactics that traditionally have been met with driver resistance. To gather sophisticated and useful data, they employ a small device, located in the corner of the dashboard with only small red/yellow/green LEDs, and no camera required or desired.
GreenRoad’s differentiates itself by offering a technically effective solution in improving safety and fuel efficiency; competing solutions only activate when there is a ‘force’ on the vehicle (e.g. a collision) and then rely heavily on the subjective, labor-intensive and expensive analysis of remote technicians. Using methods based on years of research, GreenRoad’s Safety Center service analyzes every driving minute, to learn the style of each driver and to assure the scientific validity of the data analysis.
Drivers and corporate fleet managers, who are responsible for over 77 million cars, trucks and buses in the US and EU alone, want ongoing feedback on how to improve driving safety, manage their risk and reduce fuel consumption. Insurance companies want to use sophisticated driver safety data to reduce claims while rewarding good drivers and differentiating their service in the competitive insurance market. GreenRoad offers a complete service package to these different customer groups. It combines safety, risk visibility, functionality and coaching in one cost-effective, scalable and easy to implement service. Drivers receive continuous in-vehicle, SMS or email feedback using a color classification system: green indicates safe driving, yellow needs attention and red is high risk.
According to the US Department of Transportation, the economic cost of motor vehicle crashes in the US is $230 billion. Billions are spent on road and automobile safety improvements. The market opportunity to address prevention and the role behavior plays in 95% of all crashes, however, is vast. There are several tens of millions of fleet vehicles in the US. Although exact figures have not been confirmed by the company, at a few tens of dollars per month for a GreenRoad-type subscription, even single-digit percentage penetration rates make this a multi-billion dollar total available market in the US alone.
GreenRoad’s top target segments are corporate fleets and commercial insurers. GreenRoad is currently installed in all classes of vehicles, and in segments of the commercial vehicle markets, including service fleets and trucking.
From their customers, GreenRoad learned to use safety as a competitive advantage to best penetrate the market. Another key lesson to getting early market traction was the importance of taking a positive coaching approach to drivers. With a seasoned enterprise direct salesforce and close partnerships with large insurance companies such as Marsh and AAA, since its formal launch the company has been able to penetrate large global fleets such as T-Mobile UK, UK Ministry of Defence, Ryder, Stagecoach and LeFleur Transportation. GreenRoad has been deployed in thousands of vehicles worldwide and will be in tens of thousands of vehicles by 2009.
The company operates on a recurring revenue business model, which it claims is the main reason for its growth. Though exact growth numbers are unavailable, GreenRoad only plans to add on profitable business.
On average, GreenRoad customers reduce risky driving behavior by 50%, crashes by 54%, at-fault crashes by 42%, crash repair costs by 49% and fuel costs by up to 15%. GreenRoad’s value proposition is around measurable savings in operating costs related to crashes, insurance, maintenance, fuel economy and lost productivity, and so even in a recessionary economic environment the company is experiencing rapid growth as CFOs are constantly looking for creative ways to reduce costs and manage risk. Working with insurance and risk management companies to help them identify, mitigate and price risk is another important aspect of GreenRoad’s growth strategy. But the company is clear that given the size of the market opportunity available, it is too early to be thinking about an exit strategy.
This segment is a part in the series : Deal Radar 2009