Flitways Technology, Inc. ($FTWS) The Perfect Acquisition Candidate for Uber or Lyft
Uber and Lyft have lead the ride sharing industry by building solid consumer-based businesses, but as the sector continues to develop, new players will enter the market and focus on different segments where there are large opportunities. According to Juniper Research, the ride sharing industry will grow to $6.5 billion by 2020 from $3.3 billion in 2015, with North America accounting for nearly 1/3 of the market.
Source: Tnooz.com; Juniper Research 1
Technology has created greater efficiency within the ride sharing industry, from trip initiation to arriving back home, which collectively eliminates stress, hassle and paperwork for both business and leisure travelers. One company that has developed an innovative and highly differentiated software and service provider network is Flitways Technology Inc. (OTC Pink: FTWS). Flitways has had top media publications featuring the company and its technology, these include: Yahoo! Finance, CNN, FORTUNE, Fast Company, Reuters, New York Magazine, Skift, VentureBurn, Digital Journal, Travel Pulse, the Examiner, and many others.
Overview: Flitways Technology, Inc. (OTC Pink: FTWS)
Flitways is a Los Angeles, California-based travel technology and services company which focuses on two large and under-served markets and has two important and valuable assets. Flitways’ business segments are: (i) a novel solution for enterprises looking to create a more seamless, easy to view, and cost-saving ground transportation solution for its employees; and (ii) a robust global network of car services and drivers that provides a source of additional (ancillary) revenue and integrated booking and itineraries for travel providers (e.g., airlines) and travel distributors (e.g., Kayak). The market for travel resellers and aggregators that negotiate with hotels and airlines and data mine the internet for the best pricing and perks is growing rapidly. In 2015, that sector booked 32% of the total market, representing $1.1 billion. The company is building a fast first mover advantage in its enterprise client base and its breadth of partnerships with airlines, online travel agents, and travel distributors.
Flitways’ two key assets that make up the source of highly undervalued and misunderstood equity are its software base and its global supply network of car service providers (e.g., town car and limousine companies) and a thoroughly vetted and reviewed fleet of individual career drivers.
On the platform side, after several years of planning and software coding that’s based on the CEO’s personal experiences as a frequent traveler in his roles as an engineer and consultant for large corporations, is the cornerstone of the Flitways proprietary enterprise suite. Through the company’s tight integration with all major travel networks, corporate expense management systems, car service dispatch platforms, airline and booking providers, Flitways is able to offer a one-stop solution for its clients to offer the identical billing, planning, itinerary and authorization that is customary in the hotel and air travel markets. To the best of the company’s knowledge, there is no similarly robust and complete offering in any market in which Flitways competes.
On the supply side, the company has aggregated a global fleet of both established car service companies and individual drivers (who frequently also work with Uber, Lyft and other similar companies), but in all cases are background checked and in compliance with local licensing and insurance requirements. To date, Flitways has a network of nearly 20,000 cars in most major global markets, though with a deeper penetration into US secondary markets than elsewhere. The company is actively growing its supply base in its existing cities and adding additional markets based on both current customer demand and anticipated needs reflecting worldwide tourist opportunity and expected business requirements.
Flitways’ services are delivered through a fully integrated and customizable enterprise software suite, which allows any business to easily manage its ground transportation needs through both its administrator website and simple to use IOS and android apps. Companies are able to pre-authorize and set payment preferences of all ground transportation needs for their employees, in lieu of cumbersome receipts and reimbursements. Flitways’ platform also supports employee travel compliance, such as travel and cost limits, class of service and expense and reimbursement reporting.
As of June 2017, Flitways maintains operations across more than 170 cities, 400 airports, and manages a fleet of nearly 20,000 vehicles worldwide. Furthermore, management expects to expand operations to an additional 70-100 cities by the end of 2017.
This enterprise travel technology provider has working relationships with some of the world’s most recognizable companies, including Pokemon, Amazon.com, Inc. (NASDAQ: AMZN), Samsung Electronics Co., Ltd. (OTC Pink: SSNLF), Xerox Corp (NYSE: XRX), Rolls Royce, and more.
FTWS: Niche Focus Creates Uber- and Future-Proof Environment
One of the first concerns that some may have is whether Flitways will be in direct competition with Uber and Lyft.
The right question to ask oneself is, will it be Uber or Lyft that acquires Flitways in order to round out their ecosphere and technology base.
Uber and Lyft provide “taxi-like” service primarily to the consumer market, but also are commonly used by business travelers. Although these two companies have rolled out varying classes of vehicles that can provide rides to even high-end and business markets, they do not provide billing, compliance, third party dispatch management, or seamless itinerary services that are the core of Flitways’ offering.
In addition to expanding its supply of drivers and car services to new cities and airports, Flitways’ management plans to continue focusing on quality control and customer service to ensure it maintains their standards and vision.
FTWS: Total Users Grew 310% In First Quarter 2017
Flitways is off to a strong start in 2017 after delivering a record-breaking first quarter. During the first three months of 2017, the company reported total users growth of 310%, compared to the first quarter 2016. Recurring users increased 75% year over year, as they added 60 more cities to its service list, compared to September 2016. Management reported that installations of its mobile app grew 35% on a month over month basis.
The company continues to leverage its strong portfolio of existing corporate clients and management says they are anticipating positive free cash flow in 2018.
“The strong growth is in line with our expectations. Because of additions to our executive team and securing new clients, we have a positive outlook for both the second quarter and the balance of the year. FlitWays will continue to lead the advance of seamless billing, service and integration in the enterprise ground travel market,” says Flitways CEO and founder Tobi Mac.
Just over a year ago the company was commencing operations, and with this first quarter’s strong growth, it proves that they are on the path to very healthy growth.
Financial and Industry Analysis
As of June 2017, Flitways has a market cap of only $2.34 million. The travel technology company has 150 million authorized shares, 58.53 million shares outstanding, and a float consisting of only 15 million shares as of May 2017. During the first quarter 2017, the company reported total revenue of $203,000 (equating to sales growth of 230% compared to the first quarter 2016), a net loss of $524,000, total assets of $117,000, and total liabilities of $455,000.
Here are five other companies that have similar operations to FTWS and could be used to help find a fair value for the company:
CarSmartt, Inc. (OTC Pink: SRSP) operates a Palo Alto, California-based ride sharing service that specializes in long distance rides and package shipping services. The company also currently operates in Italy and management is continuing to push for expansion across Canada and Europe. CarSmartt, Inc. has a market cap value of $5.37 million, as of June 2017. The ride sharing service provider maintains a share structure consisting of 1.25 billion authorized shares and 357.95 million shares outstanding, as of February 2017. During the first quarter 2017, CartSmartt, Inc. reported no revenue, a net loss of ($61,994), total assets of $758, and total liabilities of $60,765.
Sharing Services, Inc. (OTC Pink: SHRV) operates as a diversified travel technology holding company, which utilizes travel agencies, ride sharing, mobile apps, relationship marketing, group travel, and more. The travel technology holding company has a market cap value of $34.63 million, 500 million authorized shares, and 53.36 million outstanding shares, as of June 2017. During the company’s latest reported quarter, ending on January 31, 2017, Sharing Services, Inc. reported no revenue, a net loss of ($4,000), total assets of $0, and total liabilities of $17,000.
Travelport Worldwide Limited (NYSE: TVPT) operates a travel commerce platform that provides a wide range of technology-based solutions for traveling and tourism across the United States, United Kingdom, and more. As of June 2017, Travelport Worldwide Limited maintains a market cap value of $1.69 billion, 124.16 million shares outstanding, and a float consisting of 115.79 million shares. During the first quarter 2017, the digital travel services provider reported revenue of $650.76 million and net income of $56.11 million.
Sabre Corporation (NASDAQ: SABR) provides technology solutions to the global travel and tourism industry, through its two businesses: Travel Network and Airline and Hospitality Solutions. The company’s Travel Network segment provides comprehensive business-to-business traveling services through working closely with corporate travel departments. The Airline and Hospitality Solutions business provides Software-as-a-Service (SaaS) solutions to airliners, hotel operators, and more. As of June 2017, Sabre Corporation has a market cap of $6.27 billion, 278.09 million shares outstanding, and a float consisting of 189.32 million shares. During the first quarter 2017, the travel technology company reported total revenue of $915,353 and net income of $77.25 million.
Expedia, Inc. (NASDAQ: EXPE) is an online travel company that provides a wide range of travel booking options and solutions, through its four main businesses: Core OTA, Trivago, Egencia, and HomeAway. The company serves leisure and business travelers through its vast network of online booking and travel planning websites: Expedia.com, Hotels.com, Hotwire.com, Orbitz.com, Travelocity, Trivago, CarRentals.com, and more. Expedia, Inc. has a market cap of $22.07 billion, 138.15 million shares outstanding, and a float consisting of 120.96 million shares, as of June 2017. During the first quarter 2017, the online travel booking company reported total revenue of $2.19 billion, but a net loss of ($86.12 million).
Overall, Flitways Technology, Inc. (OTC Pink: FTWS) has created a unique niche in the multi-billion-dollar ride sharing service and travel technology industry. Offering a unique, future-proof and market leading platform gives the company a significant advantage over Uber and Lyft when attracting enterprise customers and travel distributors. The company has established contracts with entities like Pokemon, Amazon.com, Inc. (NASDAQ: AMZN), Cartrawler, Holiday Taxi and many others, which demonstrate the value of their offerings. Flitways is generating solid revenue and customer growth. This is more than can be said about some of the company’s competitors. CarSmartt, Inc. (OTC Pink: SRSP) and Sharing Services, Inc. (OTC Pink: SHRV) are valued at $5.36 million and $36.63 million, respectively. Yet, neither of these two companies are generating revenue. Flitways seems to be extremely undervalued compared to its peer group. The company is well-positioned for future success, and even a possible acquisition by one of the majors as the company focuses on quality and top-shelf service for enterprise travelers and globally recognized travel distributors.
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