Connexion off to fast start in US

THE United States launch of Melbourne automotive software company Connexion Media’s Flex fleet management system is set to get a boost thanks to a free trial that an American car-maker will be offering with its new vehicles.

Connexion’s normal fees will be paid by the as yet unnamed car-maker for the duration of the trial, ensuing a solid start to US revenues from the venture.

In addition, Connexion has revealed a plan to establish two new automotive IT innovation centres, one in Melbourne and one in Detroit, to develop new applications to run on Connexion’s two platforms, Flex and the infotainment system miRoamer.

The US launch of the Flex fleet management system promises to deliver Connexion’s first sizeable revenues after the system goes live within a month.

Connexion founder and chief executive George Parthimos said the company had delivered the necessary customised software to the US car-maker by November 30.

He said it was expected the automotive manufacturer would offer a free trial of the Flex system to all qualified buyers for an initial period.

The car-maker will reimburse Connexion during the trial period and, when the period ends, the buyer can either take up the subscription or opt out.

Mr Parthimos said this system had been used successfully by the Sirius XM satellite radio company.

“Based on the initial free trial offer and the size of the US automaker market share, Connexion anticipates to acquire over 50,000 paying subscribers within six months from the product launch,” Mr Parthimos said.

“Connexion is entering a very exciting period.

“We are about to launch our largest and most lucrative SaaS (software as a service) product with a major US automaker, and have all the necessary personnel, processes and infrastructure in place to support a large-scale commercial launch,” he said.

During the year, Connexion raised $2 million from shareholders so it could enlarge its backroom processing system ahead of the launch of Flex in the US.

Mr Parthimos said Connexion could now handle around 1 million vehicles with its Flex fleet management system.

“The company has experienced rapid growth in recent months.

“We continue to actively engage with the automotive industry on a global level, which is generating tremendous interest in both our products, Flex and miRoamer, as well as new product-development opportunities.”

Connexion chairman John Conomos told last week’s annual meeting that directors were confident total subscribers to Flex in the US and Australia would reach 200,000 subscribers by the end of the 2018 financial year.

Mr Parthimos said the automotive app development centres were still at the planning stage.

He sees the proposed centres as a means of connecting smaller businesses with the car-makers Connexion deals with regularly, including General Motors, Volkswagen and Peugeot.

“We are not experts in everything, so this is an opportunity for start-ups wanting to crack into the market to use our channel,” he said.

"We want to future-proof the next generation of automotive industry in Australia by focusing on technology and services.

“If we don't do it, someone else will."Mr Parthimos said he expects the centres, which will cost $5 million to run for the first three years, to be operational by mid-2016.

Connexion is talking with the Victorian government and the City of Detroit about setting up the centres. He has also spoken with private equity and venture capital groups.