The French prepaid corporate services group acquires a strategic stake in the Luxembourg-based startup to use its digital fuel transactions app.

Founded in 2016, Luxembourg-based startup Kwalyo launched CarPay-Diem in January 2019, as a digital solution for mobile refueling and fuel payment at service stations.

Already launched in Belgium and the Grand Duchy, the service will soon be available in France, the Netherlands and Germany. In November 2019, Banque Internationale à Luxembourg (BIL) teamed up with the startup to launch its mobile payment service for fuel.

Last week, the Fleet & Mobility division of the Edenred group acquired 10% of the capital of the 14-person company, thereby gaining access to its digital transaction solution.

“The partnership will position Edenred as a pioneer and the leading acquirer for digital fuel transactions in Europe”, says Antoine Dumurgier COO at Edenred.

With this investment, Frédéric Stiernon, co-founder and CEO of the startup, intends to accelerate its international expansion and strengthen its position in the “fuel” ecosystem.

Frédéric Stiernon, why did the Luxembourg-based startup decide to include the French group in its shareholder base?
To accelerate our expansion in the market. We are going to gain access to all the European countries where Edenred is already present and a partner of more than 52,000 service stations.

On the other hand, it consolidates our leadership position and reinforces the company’s long-term stability. We are now backed by a large international group, also active in the fuel world, which collaborates with all the major oil groups and their service stations. This is quite reassuring for our customers and partners.

You are not afraid of losing your DNA or your startup dynamics?
Co-founder Alain Tayenne and I are still at the helm of the company and the dynamic will evolve from startup to scale-up. We will continue to collaborate with all the market players, oil companies, payment methods and driver communities. This remains a key element of our strategy.

Edenred’s investment in our capital will in no way reduce the level of service provided to our customers and partners.

Our vision remains unchanged: we want CarPay-Diem to be the reference solution in Europe for accessing petrol pumps with connected devices (smartphones, cars, etc.).

To do this we had to find a partner that would bring us more than just funding. Edenred will accelerate our penetration of the oil networks.

The group will also promote access to new users of our service. This will allow us to have more transactions in our partner networks.

Have you considered other potential investors?
Other leads would probably have reduced our accessible market: with an “oil” player, it would have been complicated to get us accepted by its competitors. A purely financial investor or a payment solutions provider would not have had an impact on our penetration of service stations.

And with a car manufacturer, we might have closed the doors of its competitors, who might not have wanted to work with us.

So what does Edenred bring to you as a large group?
Firstly, its international presence: The group has very active teams in many countries and we are going to benefit from their support to help CarPay-Diem progress within the market.

Secondly, the Edenred group is already active in the digital world and has many solutions that are complementary to CarPay-Diem. These are all opportunities for the growth of our business.

But this relationship is not a one-way street. By investing in Kwalyo, Edenred has access to an innovative, proven technology that is already used by its customers and partners.

Our platform manages several thousands of full mobiles daily in different oil networks spread over several countries. Investing in a structure such as ours is certainly a way for Edenred to further accelerate its plan to digitize fuel cards, for example.

The customer no longer having to go to a store is a great loss of business for service stations…

Gas stations don’t know the customers who are filling up and are not able to communicate with them.

Won’t your service reduce gas station sales because customers won’t go to the store?
This would indeed be the case if we hadn’t integrated a marketing platform into CarPay-Diem allowing stations to display offers on user screens.

Thanks to this platform, the stations can attract customers with a discount on the price of fuel and bring them into the stores.

Today, gas stations don’t know the customers who are filling up and are not able to communicate with them.

CarPay-Diem replaces the time of payment with marketing interaction that allows oil companies to increase their sales well beyond the fuel.

This functionality of the platform has proven its effectiveness and allows tankers to acquire new customers very quickly at a very low cost per customer.

During the pandemic, the industry experienced a drop in the number of gas station visits and the demand for fuel. How has your business survived and resisted this situation?
During March, we recorded a 60% drop in transactions, while some tankers saw their figures drop by 70%. This indicates that the full tankers were proportionally used more.

For more than a month we have been exceeding the pre-containment figures. With Covid and the respect of the barrier measures, the recurrent use of our application is progressing.

We have also observed that the subject of “digitalization” has become a priority in certain networks that did not see much interest before the pandemic. This creates new opportunities for our business.

Our priority remains on fuel, as fuel still moves 99% of the vehicles today.

What other services and solutions do you see for Carpay-Diem in the future?
We will continue to focus on managing full mobile devices while we evolve our services to better support users.

We want to strengthen our leadership position by expanding our network and increasing service availability to new partners.

But at the moment, we are not planning to add new services such as parking lot or toll payment. There are already several companies that are doing it and doing it well.

And if we follow the evolution of the electric vehicle recharging market, our priority remains on fuel, as fuel still moves 99% of the vehicles today.

Silicon Luxembourg, September 2020