Knight-Swift (NYSE: KNX) has taken a majority stake in a provider of driver-directed software, Eleos, which will continue to operate as a stand-alone company.
It is not a move that Knight-Swift normally engages in, according to Knight-Swift CEO Dave Jackson. Jackson, in a phone interview with FreightWaves, said there had been precedents for such acquisitions, such as its purchase of a majority stake in trailer blade manufacturer Strehl several years ago. But it’s not a regular approach the truckload carrier takes.
Eleos, based in Greenville, South Carolina, competes in the marketplace for driver software that operates on transportation management systems and phone-based apps. Kevin Survance, one of the founders of Eleos and its CEO, said in the joint phone call with Jackson that the Eleos system can be used not only in the truck cab with its TMS system but “can be taken out of the cab and the driver can have the convenience of using it wherever they are.”
Jackson said one of the key attractions of the Eleos product, and why it took a majority stake in the company, is that Eleos is not sharing its data with third parties that view the data as a source of revenue.
“Many technology companies backed by venture capital … make a play to investors that are going to disintermediate the market,” Survance said. But Eleos is “not in that game and we never have been,” Survance added, noting that he believes that is one reason for the company’s success.
Jackson said, “We hope the industry looks at this that we are the largest truckload carrier, we stepped up and we put a chunk of coin down to make sure all of our data stays private.”
The price of the transaction was not disclosed.
Eleos has approximately 2,000 customers. Jackson described them as “some of the most forward-thinking businesses that are seeking a very positive digital driver experience.” And one part of that, he added, is to maintain the privacy of the customer data.
The Eleos platform is open, meaning that users can modify it for particular aspects of their business. For example, Survance said among the Eleos customers is a company that hauls RVs and trailers to their final destination. The requirements that a company like that has would be significantly different than a truckload carrier, so the open platform of Eleos can be built on to meet those specific needs.
Jackson said the open platform is “the best thing we have seen.” Since it can be modified to meet the needs of a specific customer, Jackson said it doesn’t hurt Knight-Swift competitively “and in fact does open up third-party opportunities for our business.”
Survance will remain CEO of the company and will “have autonomy to pursue business objectives that they’ve been successful at so far.” Survance said the sellers of the stake in Eleos came from the original group of investors.