EZFL - Profitable Technology And App Investment Still Seem Steady In Choppy Market — Will Companies Like EzFill (NASDAQ: EZFL) Have Comparatively High Margins And ROI?
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Venture capital investment in technology has been on thedecline in 2022, dipping below $40billion per month for the first time in a year in May.
However, when you lookat the trends more closely, you see that most of that slowed growth isin late-stage and larger tech companies. Meanwhile, early-stage andsmall-cap tech companies are seeing a steady flow of investor dollars.In fact, while late-stage funding dropped by as much as 38% from 2021,seed-stage funding grew 11%.
That sustained investment activity is drivingoptimization and demand for small-cap companies, like app-basedservices, while helping those same companies scale operations in a waythat improves margins. From on-demand services like the Rover GroupInc. (NASDAQ: ROVR) dog-walking app to on-demand shipping like thefreight app from Transfix, which is expected to go public soon througha special purpose acquisition company (SPAC) merger with GSquared Ascend I Inc. (NYSE: GSQD), the range of industries andservices that can be adapted to an app-based, on-demand model isexpanding every day.
EzFill Holdings Inc. (NASDAQ: EZFL), for example, is anon-demand fuel delivery app that allows customers to skip the gasstation and have their tanks filled wherever their car is parked. Theinnovative fuel delivery app raised $25million during its initial public offering (IPO) lastSeptember and has used that capital to rapidly scale and expand,improving its margins as it does so.
$25 Million IPO FundsOperational Optimizations To Bring Down Costs, Improve Margins
In the past year, EzFillhas grown from the 13 delivery trucks it operated pre-IPO to a fleetof almost 50 vehicles. With more trucks, the company has been able tomeet increasing demand as commercial customers continue to rely on theEzFill app to fuel their service vehicles during off hours. EzFillwill also use that expanded delivery capacity to reach individualcustomers — a market segment the company plans to penetrate with anew brand awareness campaign.
While scaling to meet increasing demand, EzFill iskeeping the cost of deliveries low thanks to in-app scheduling thatallows delivery routes to be optimized to offer the fastest deliverywith the shortest drive time between customers.
On the supply side,daily fuel purchasing directly from the port has allowed EzFill tobenefit from discounted volume pricing and avoid the cost of storingthat fuel. Meanwhile, the app’s real-time pricing allows the companyto charge competitive rates based on the customer’s location.
By charging comparablemarket rates while eliminating or reducing many of the costsassociated with operating a network of gas stations, EzFill hasachieved high margins that far outpace industry averages. In itslatest quarter, for example, the company reported a 49-cent-per-gallonmargin , a dramatic increase over the 3-to 7-cent-per-gallon margin reported by gas retailers.
As the company expandsinto new territory the company hopes to continue expanding itscustomer base while enjoying consistently high-profit margins.
EzFill is a leader in the fast-growing mobile fuel industry,with the largest market share in its home state of Florida. Itsmission is to disrupt the gas station fueling model by providingconsumers and businesses with the convenience, safety, and touch-freebenefits of on-demand fueling services brought directly to theirlocations. For commercial and specialty customers, at-site deliveryduring downtimes enables operators to begin their daily operationswith fully fueled vehicles.
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