FLEETCOR Invests in Brazilian Vehicle Payments Company

Rhea-AI Summary

FLEETCOR Technologies, Inc. (NYSE: FLT) closes majority investment in Zapay, expanding its Vehicle Payments business in Brazil to 9 million drivers. Zapay, Brazil's first digital mobility solution, offers payment services for vehicle taxes, registration, and tickets, with rapid revenue growth of over 60% annually. FLEETCOR has the right to acquire the remainder of Zapay in four years, aiming for cross-selling opportunities and business expansion.

Insights

Market Research Analyst

The majority investment in Zapay by FLEETCOR Technologies signifies a strategic expansion within the Brazilian vehicle payments market, tapping into a user base of 2 million drivers. This move exemplifies a growing trend among payment companies to diversify their services and leverage technology to penetrate new market segments. The integration of Zapay's digital mobility solutions with FLEETCOR's existing suite of vehicle payment products presents a substantial cross-selling opportunity that can potentially lead to increased revenue streams and market share consolidation in a country with a large and growing automotive sector.

Considering Brazil's vast territory and the importance of vehicle-related expenses in the daily lives of drivers, the ability to pay vehicle taxes, registration and tickets through a unified platform offers convenience and efficiency. This is particularly relevant given that Zapay is the only company integrated with the National Traffic Departments across all 27 states, which could translate into a competitive advantage and customer loyalty. The reported 60% annual revenue growth of Zapay indicates a robust market demand and a successful business model that could be further scaled through FLEETCOR's investment and network.

Financial Analyst

FLEETCOR's decision to invest in Zapay and the option to acquire the remaining stake in four years reflect a calculated long-term growth strategy. Investors should note the potential implications of this deal on FLEETCOR's financial performance. The acquisition could lead to earnings accretion if the cross-selling initiatives between FLEETCOR's 7 million drivers and Zapay's 2 million users materialize into significant revenue synergy. However, it is essential to monitor the execution of this strategy and integration costs that may impact short-term profitability.

One should also consider the scalability of Zapay's technology and the potential for FLEETCOR to replicate this business model in other markets. The focus on digital solutions for vehicle payments aligns with the global shift towards digital financial services, which could make FLEETCOR more resilient to changes in payment behaviors and potentially enhance its valuation multiples over time.

Economist

The investment by a global business payments company like FLEETCOR into Brazil's Zapay underscores the economic vitality of the Brazilian market, particularly in the digital services and fintech sectors. Brazil's economy, characterized by its large consumer base and rapid adoption of digital technologies, offers fertile ground for such investments. This move could signal confidence in the country's economic stability and growth prospects, despite historical volatility.

Moreover, the transaction may have broader economic implications, such as fostering technological innovation, job creation and increased efficiency in government-related vehicle expense payments. By streamlining these processes, there could be positive externalities such as reduced time and cost for drivers, which in turn could contribute to greater economic productivity. It will be critical to observe how this investment impacts the broader digital payments landscape in Brazil and whether it encourages further foreign direct investment into the country's burgeoning tech ecosystem.

Now Serving 9 Million Drivers in Brazil

ATLANTA--(BUSINESS WIRE)-- FLEETCOR Technologies, Inc. (NYSE: FLT), a leading global business payments company, today announced the closing of a majority investment in Zapay. The investment further scales FLEETCOR’s Vehicle Payments business in Brazil and provides access to two million drivers who use Zapay’s mobile app and website each month.

Zapay is Brazil’s first digital mobility solution for paying vehicle taxes, registration, and tickets, and is the only company integrated to the National Traffic Departments in all 27 states making it the leading provider for paying vehicle expenses to government bodies in Brazil. The company is experiencing rapid growth, with revenues growing over 60% annually.

As part of the agreement, FLEETCOR has the right to acquire the remainder of the company in four years.

“The addition of Zapay further advances our vehicle payments strategy in Brazil. We invested in the company to capitalize on the attractive two-way cross-sell opportunity. We have already begun cross-selling Zapay’s solution to our existing 7 million drivers and, conversely, cross-selling our existing suite of vehicle payment products to Zapay’s client base,” said Ron Clarke, chairman and chief executive officer, FLEETCOR Technologies, Inc.

“We’ve had fantastic success expanding our Brazil business from mostly toll tags to other vehicle related categories like fuel, parking and insurance. So, we’re quite excited to integrate Zapay’s solution into our existing offering," said Armando Netto, Group President of Vehicle Payments in Brazil and North America.

About FLEETCOR^®

FLEETCOR Technologies (NYSE: FLT) is a leading global business payments company that helps businesses spend less by providing innovative solutions that enable and control expense-related purchasing and payment processes. The FLEETCOR portfolio of brands automate, secure, digitize and manage payment transactions on behalf of businesses across more than 100 countries in North America, Latin America, Europe, and Asia Pacific. For more information, please visit www.fleetcor.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240306661670/en/

Investor Relations

Jim Eglseder, 770-417-4697

Jim.Eglseder@fleetcor.com

Media Relations

Chad Corley, 770-729-5021

Chad.corley@fleetcor.com

Source: FLEETCOR Technologies, Inc.

FAQ

What is the ticker symbol for FLEETCOR Technologies, Inc.?

The ticker symbol for FLEETCOR Technologies, Inc. is FLT.

What is the significance of the majority investment in Zapay for FLEETCOR?

The investment in Zapay expands FLEETCOR's Vehicle Payments business in Brazil to 9 million drivers, enhancing its market presence and revenue potential.

What services does Zapay provide?

Zapay offers digital mobility solutions for paying vehicle taxes, registration, and tickets in Brazil, with integration to National Traffic Departments in all 27 states.

What is the growth rate of Zapay's revenues?

Zapay's revenues are growing over 60% annually, showcasing significant growth potential and market demand for its services.

What cross-selling opportunities does FLEETCOR aim to achieve with the investment in Zapay?

FLEETCOR plans to cross-sell Zapay's solutions to its existing 7 million drivers and vice versa, expanding its product offerings and customer base.

Who commented on the investment in Zapay from FLEETCOR's side?

Ron Clarke, chairman and CEO of FLEETCOR Technologies, Inc., and Armando Netto, Group President of Vehicle Payments in Brazil and North America, provided insights on the investment in Zapay.