In order to grow Relay on Demand further, the company is seeking some capital through a SAFE. This security will convert into equity in the future, providing its holders with a 10% discount on the company’s future value. This conversion is also based on a valuation cap of $8 million. This valuation is normally high for early-stage startups, but given the company’s traction so far, it’s fairly reasonable. As such, Relay on Demand’s price score is its highest across all five metrics.

The market opportunity facing Relay on Demand is large and appealing. According to one source, for instance, the global freight trucking market was worth $4.2 trillion in 2020. With a 4% annualized growth rate, it should climb to $5.5 trillion in size by 2027. The US portion of this market comes out to $1.1 trillion, with growth that is similar in size. The large number of drivers out there, combined with the (likely-growing) shortage implies high demand for a service like this. This case is further strengthened when you consider that more than 70% of all freight goods in the US are transported via truck every year. What’s more is that 84% of the industry’s carriers have between one and six trucks in their fleet. This is especially important for Relay on Demand because it’s those small, budget-constrained players, that will benefit the most from its offering. 

Now, it should be mentioned that the digital logistics market, which is where Relay on Demand would fall into, is far smaller.  Globally, this opportunity was worth about $17.4 billion in 2020.  By 2025, it should climb to $46.5 billion, implying an annualized growth rate of 21.7%. Relay on Demand ranks comfortably above average on the basis of market opportunity. This score is due to the size and growth of the industry balanced by the smaller niche that Relay on Demand will focus on.

Though Relay on Demand has an extensive number of employees on its team, the real center of the business is Darrell Pickens. Pickens is the firm’s founder, CEO, and CTO. Prior to founding Relay on Demand, Pickens was the President and Founder of 3Power Logistics Management. That firm provided technology-driven logistics solutions aimed at minimizing freight costs for refrigerated perishables. Clearly, this business has some crossover with Relay on Demand today. The technology and leadership experience would certainly be useful if applied to his current venture. Before 3Power, Pickens was the President of Kitchen Robotics and Automation Systems. That company focused on providing custom automation solutions for QSR, quick casual, and hotel kitchens. His role before that was as an Innovation Engineering Manager at Taco Bell. There, he worked on hot/cold food and beverage equipment innovations. This technical nature should also translate into valuable skills for his current post.

Because Pickens brings both technical and entrepreneurial experience to Relay on Demand, the company’s team score is above average.

There is no doubt that Relay on Demand is an interesting company, but it’s not wholly unique. There are multiple other players in the space. One of these is an app called Fleeting. It’s the most similar firm we identified in that it also allows companies to book a driver. However, Fleeting’s revenue model is different. Instead of a subscription fee with an hourly rate attached, Fleeting charges an inflated hourly rate to its users. It then takes between 20% and 45% of that as a platform fee. LaneAxis is another player in the space, but if anything, its business model is more complementary to what Relay on Demand is offering. LaneAxis allows for direct communication and negotiation between shippers and carriers. This essentially allows the two to avoid going through costly brokers. What makes Relay on Demand unique in comparison to these similar companies is how it is pricing its service and the flexibility it grants the carriers from that pricing perspective. 

While only having two main competitors bodes well for Relay on Demand, the lack of distinction in its service (and thus the ability for another company to replicate it) brings the company’s differentiators score is decent, but not particularly strong.

Since launching, Relay on Demand has seen some nice success. In 2018, the company generated nothing in the way of revenue. In 2019, this grew to sales of $471,242. Its loss of $96,639 in 2018 grew to a loss of $229,101 in 2019, while its cash outflows rose from $94,093 to $157,749. These losses and outflows should be expected, though, given how early-stage the company is. What’s most important is to see those sales continue to rise, and according to management that’s exactly what is happening. Full-year 2020 results have not been provided yet. However, Relay on Demand did say that gross revenue hit $2 million in annual recurring revenue before the end of 2020. The company’s goal for 2021 is $6 million. In addition, the business boasts more than 1,000 drivers and 400 carriers on its platform. All together, the performance score for Relay on Demand is encouraging.

On the whole, Relay on Demand is an interesting business, but there are some negatives to it that investors should be aware of. Though the company’s founder has some attractive experience, he’s really the core of the business. There are no other key members to run the show if need be. This lack of staff means that the company will need to work on recruitment and hiring in the near future in order to continue growing, activities which will incur extra costs for the business.

 Another, longer term problem relates to self-driving trucks. At present, the market for the self-driving space is worth about $1 billion. But it is growing at a rate of 10.4% per year and by 2025 will be up to $1.67 billion. Eventually, this space could grow to be a threat to Relay on Demand’s offering. Additionally, there are other competitors creating very similar services to Relay on Demand’s app. There is little to prevent one of them — or an entirely new company — from replicating Relay’s pricing model, which is its main differentiator currently. The company’s service is not highly defensible, which brings unnecessary risk for prospective investors.

On the bullish side, there are important points to consider as well. For instance, the industry the company operates in is massive. Relay on Demand’s service should help companies contend with real and significant problems in this space. The founder has some relevant experience, and the valuation on the company is quite reasonable. Throw in strong financial and customer acquisition performance since its launch, and there are a lot of good things for investors to keep in mind.

Right now, Relay on Demand is solving a real problem, and it’s on a solid trajectory. Its ability to create value for its clients is undeniable, though questions remain about how large it can grow. For the most part, Relay on Demand scored well across all five metrics. However, questions of growth and defensibility bring uncertainties to this otherwise strong concept. As multiple startups attempt to solve the problem of connecting semi-truck drivers with trucking companies, it is unclear if Relay on Demand’s solution will be the winning one. Thus, the company is a Neutral Deal at this time.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written by Daniel Jones.