Executive Summary:
Mudflap is a service that enables truck drivers and small fleet operators to get discounts at fuel stations around the United States.
Mudflap makes money from referral fees, which are paid by the fuel stations that it has partnered with.
The company operates on an affiliate business model, meaning it generates income by bringing in additional business for its partners.
What Is Mudflap?
Mudflap is a service that enables truck drivers and small fleet operators to get discounts at fuel stations around the United States.
Companies owning big fleets can normally access attractive prices because they source large gallon volumes, which aren’t really accessible to small firms or owner-operators.
On top of that, fuel cards charge transaction fees, monthly fees, and settlement fees that can add up quickly.
Here’s how it works. First, you simply download the Mudflap app, which is available for Android and iOS devices.
Users, after setting up their account, pick a fuel station in proximity. Mudflap’s app will list all the 1,300+ fuel stops it works together within a dedicated map section.
Once you found a fuel stop, simply click on the green button showing up and use the automatically generated 6-digit code.
Drivers then show their code to the person at the counter who consequently turns on the pump. The money is then deducted from the driver’s debit or credit card, which needs to be added to their Mudflap account before.
After being done with the fuel job, Mudflap simply charges the linked card with the discounted price. No hidden fees or credit checks are being applied.
Mudflap works together with hundreds of independent fuel stops, including AMBEST, Roady’s, Casey’s, Road Ranger, and others.
In fact, you don’t even have to be a truck driver to use Mudflap. Anyone owning a diesel-powered, whether it’s a pickup or RV, can access Mudflap discounts.
How Does Mudflap Make Money?
Mudflap makes money from referral fees, which are paid by the fuel stations that it has partnered with. This means Mudflap essentially operates on an affiliate business model.
Mudflap has previously stated that it only receives these referral fees if a large enough number of drivers are filling up their tanks at a given fuel stop.
Furthermore, Mudflap acts as the merchant of record for the transaction, meaning it collects the payment from drivers and then settles it with the fuel station partner.
As a result, it is Mudflap that takes on the risk of the transaction since it may default. So, merchant partners don’t incur any risk and can simply participate in the upside.
But what is that upside? The biggest one is simply the additional business that Mudflap brings to the fuel station.
Since drivers can save up to 40 cents per gallon, being a fuel station that supports Mudflap may be the ultimate reason why someone chooses a given stop.
The discount simply acts as a mechanism to allow fuel stops to cross-sell drivers into more lucrative products. After all, most fuel stations actually don’t make any money on the fuel they sell but on the ancillary products such as food or drinks.
Meanwhile, drivers benefit from getting access to discounts that have previously been reserved for large fleet operators.
It, therefore, isn’t surprising that Mudflap has since grown to over 500,000 registered members – largely driven by word-of-mouth.
One of the keys to Mudflap’s rapid growth, apart from allowing people to save money, is its quick sign-up process. Since Mudflap handles all payments, it can onboard users in less than a minute, thus enabling them to earn discounts instantly.
Additionally, every merchant in the Mudflap network receives their own terminal, which significantly speeds up the verification of transactions.
Levels of discounts may ultimately vary, depending on the deal that Mudflap has struck with its merchant partner. In general, its referral fee will be higher than the fuel discount it hands out.
The business model strategy that Mudflap pursues going forward is likely based on extending the types of discounts its users can earn.
As previously stated, drivers can currently only access discounted prices on diesel. However, there is a variety of other options still at Mudflap’s disposal, including other fuels, diesel exhaust fluid (DEF), and even ancillary products and services such as food or repairs.
Expanding into as many verticals as possible is certainly a necessity given the competition that Mudflap faces in the United States. Services like GasBuddy or Upside are also heavily rapidly signing up new merchant partners.
Mudflap Funding, Revenue & Valuation
Mudflap, according to Crunchbase, has raised $50 million in just one round of equity-based venture funding.
However, the company has raised some additional rounds before based on data from Pitchbook. For example, a seed round in July 2019 netted the firm another $2.5 million.
Over a dozen of investors have put their money into Mudflap thus far, including 9Yards Capital, Commerce Ventures, or QED Investors.
Unfortunately, since Mudflap remains in private ownership, it is not required to disclose revenue or valuation figures to the public.
