Editor’s note: The following story is sponsored by Academy Bank, a Kansas City based community bank, and is part of a series of features spotlighting some of the bank’s startup and small business partners.
Wasted time is wasted money — a notion at the forefront of Idle Smart, a Kansas City IoT tech company built specifically to help vehicles reduce idling time and, in turn, fuel consumption. So when a banking snafu ditched the company’s application for federal relief funds in 2020, Jeff Lynch needed to turn around fast.
“The economy for many businesses came to a screeching halt,” said Lynch, co-founder and president of Idle Smart, describing the early tumult of the COVID-19 pandemic.
“I give the federal government a lot of credit — even though I tend to be a small government kind of guy — for helping businesses like ours that are not yet Fortune 1000 companies; giving us access to capital in a way that was efficient and tangible,” he continued. “But to say there was a mad scramble would be an understatement. It was initially unclear how these programs could be implemented and how we could participate, if we even qualified.”
Click here to learn more about Idle Smart, one of Startland News’ Kansas City Startups to Watch in 2017.
As 2020 began, Idle Smart already was experiencing a somewhat typical transportation industry skid, with fleets’ truck-buying boom-to-bust cycle — driven initially by changes in regulation, new technology and a good economy — making an expected, but overly extended stop after heavy purchases in 2016, 2017 and 2018.
“In 2019, it sort of fell off the cliff. The industry went from epic highs to decade lows,” Lynch said. “2019 for new truck builds might’ve been even worse than 2020. So we felt like we actually had two years of COVID — one was organic, and one that was actually associated with the virus.”
When the Paycheck Protection Program arrived — and it became more clear that venture capital-backed startups and companies could participate — Idle Smart jumped into the application process, working with a large bank with a national footprint in hopes of securing funds.
“We were dinged because we didn’t have a credit card with them (even though we had multiple accounts), and I didn’t find out that was a problem until after our application was submitted,” Lynch said. “And then we lost our place in line. It was really frustrating.”
The setback could’ve been worse if the company hadn’t found help, he acknowledged, noting widespread uncertainty amid the PPP rollout.
“This was an evolving landscape for a small company like for ours to navigate and we didn’t have the bandwidth or expertise to suddenly just figure it out,” Lynch said, noting Idle Smart ultimately turned to Academy Bank’s team in Kansas City to restart the application’s engine.
“You don’t know what you don’t know. Academy Bank was able to say, ‘Here’s where we are. This is how it works. This is how we can help you,” he continued. “And it was a turnkey solution, front to back, for us. That sounds easy to say, but it’s actually really hard to find.”
The relationship between Idle Smart and Academy Bank felt like a true partnership — not just a client-vendor transaction, Lynch said, noting the local bank lent extraordinary insights, support and other value-added services.
“The partner relationship is impactful because both the client and the bank benefit,” said Jeff Sullivan, senior vice president and business banking team leader at Academy Bank. “We were able to help so many clients in the darkest of times, but the bank benefited as well. We have so many new partnerships with business owners now. We will be able to grow these for years to come.”
Click here to learn more about Academy Bank.
As a family-owned, locally run business, high-touch client relationships are at the core of the bank’s culture, added Sullivan, who led Academy Bank’s partnership with Idle Smart.
“That allows us to make quick decisions and provide quick responses,” he said. “That ability to respond was crucial during the PPP process, as anxiety levels about what was happening in the world and concerns about PPP funds running out were so high.”
Both Lynch and Academy Bank leaders agreed the relationship gave Idle Smart confidence in its banking partner again — and helped the company get back to the critical task of growing its business without further unnecessary delay.
“Academy Bank had people working round-the-clock. It was stunning. Literally humans — not just automated messages — interacting back with you every step of the way,” Lynch said. “And I’m sure they were in their own scramble to figure everything out too. But they didn’t let that impact their service.”
Idle Smart’s impact
“Simplistically, the increase in the price of diesel fuel helps people to see the importance of what we do as it relates to cost,” Lynch said. “Fuel is always going to be the No. 1 or No. 2 operating expense for a fleet. As the price gets to $3.50 a gallon, that’s a heck of a lot more important to people than it was at $2.95 a gallon.”
“We also have a meaningful impact on the environment. Every gallon of diesel fuel you save is 22 pounds of CO2 [that doesn’t go into the air]. Our industry is starting to pay more attention to it, but cost efficiency is more of a primary driver in the purchase decision. We talk about a double bottom line: you get a financial return and an environmental return. You communicate that to your constituents, your shareholders, your customers — that’s a positive and we can measure it.”
“Consumers are pushing on companies and having higher expectations that those they do business with are more mindful of the environment. We’re seeing a noticeable increase in that interest over just a few years ago.”
Growth staying on course
Splitting its team between Kansas City and Massachusetts, where it shares significant investors, Idle Smart rebounded nicely in 2021, Lynch said, and is growing its team — actively hiring in the KC metro.
“We’ve found incredible talent here and, as always, we’re excited to be part of this amazing transportation hub and the KC community,” he said. “It’s a great fit.”
Click here to read about Idle Smart’s Series A round, which included investment by Kansas City-based KCRise Fund.
An industry-wide shortage of microprocessors continues to nag transportation manufacturers, adding to supply chain challenges, Lynch acknowledged while expressing confidence the issues would work themselves out over the next few quarters.
In the meantime, Idle Smart is seeing an uptick in its valuation and raising growth capital to push the next iteration of its technology, he said.
“Today we’re much more broad in terms of how we help fleets,” Lynch said. “It’s not just about being more efficient with their fuel spend or consumption, but also in better utilization of their trucks. We’ve added a series of technologies and features that, for example, monitor and maintain battery levels, maintain and prevent against cold start situations. Those solutions collectively round out our portfolio to make us much more than what we were.”
Click here to take a virtual tour of Idle Smart’s technology.
Becoming a more comprehensive tool for fleets is expected to take shape as a subscription-based, SaaS platform that offers remote management reporting and diagnostic alerts, among other proactive and responsive features.
“It makes sense given the balance sheets of a lot of the fleets we work with, making it a much more compelling solution for them,” Lynch explained of the subscription model. “So we’ve transitioned away from hardware being the leader of what we do, to recognizing the importance and potential of the SaaS side of things. If you’re a fleet, and you can pay $50 a month for Idle Smart, and save $300 a month in fuel, it’s literally paying for itself from Day 1.”
“A challenge when growing your footprint as a company is finding the right balance of what we can do and what you can do right,” he emphasized. “As we become more of an IoT platform in a vehicle over the next few years — continually evolving our platform to layer on a whole series of features and services that we don’t do today — that starts to be outside of our traditional business. So we have to remain mindful of where we’re steering ourselves.”
Academy Bank is a full-service commercial bank with $2.3 billion in assets and over 80 branch locations in Arizona, Colorado, Kansas and Missouri. Academy Bank provides a wide range of financial solutions for business and individuals, including commercial and business banking, treasury management and mortgage services. Academy Bank is a wholly owned subsidiary of Dickinson Financial Corporation, a $3.5 billion holding company headquartered in downtown Kansas City, Missouri. Academy Bank’s sister bank, Armed Forces Bank, headquartered in Leavenworth, Kansas, proudly serves active and retired military and civilian clients around the world with more on-base locations than any military bank in the country. For more, visit www.academybank.com