Kristen Irvin just received $5.5 million in an oversubscribed first round of funding for her fuel procurement company.
Irvin is the founder and president of TeamFuel, a Huntington Beach-based company that bought 55 million gallons of petroleum, diesel, rocket fuel and propane for clients last year.
TeamFuel makes money by saving money for businesses in their fuel purchases. Instead of buying fuel when the tanks get low, TeamFuel buys fuel for companies when the price is low. And if a client’s tanks are still half-full, Irvin finds another company to pick up the excess. In doing so, Irvin said she can save a company around 10% of its fuel costs.
Irvin started the company in 1992 and it has been profitable since. Some its clients are The Walt Disney Co., Frito-Lay Co., Southern California Edison and Toys R Us Inc.
“Our business is hot. We are going after all fuel users,” Irvin said.
The company is installing a new software program that will help it handle more business. The new system will be able to predict markets and consumption rates, and adds in variables for each tank, Irvin said.
The investment round came from several funds that have a specialty interest in the energy industry. Investors include Energy Ventures Group, Nth Fund DQE Enterprises and a few others. The company also received funding from Garage.com, the online investment and consulting firm that has had its hand in the start-up of several companies. Another investor in TeamFuel was Ephibian, a Tucson software development firm that built the new procurement system for the company. Irvin said the round of funding was oversubscribed by double.
“It was not difficult for us. We were able to be picky. We were doing the interviewing,” Irvin said.
In April, Irvin hired Bill Green as chief executive to handle the money raising operations and give the company a stronger management team. Green previously ran The Strategic Chemical Management Group, a chemical procurement company. He was also the president of ECOLINK a firm in the chemical and environmental industry.
Since TeamFuel is profitable, it has the chance to grow organically. But Green said the company sought an equity placement to expedite the company’s goals and beat its competition to the punch.
“Supply-chain management is not a secret. There are other people that are doing the same things. We want to grow as fast as we can, so that when people think of this type of business, they think of us,” Green said.
Irvin estimates the company will pull in about $250 million in revenue this year,she would not comment on her margin,and total gallons purchased will go up to 1 billion by next year.
“We have that many clients ready to get on. We think we can reach our goal with the money we raised,” Irvin said.
The company also intends to hire more employees, going from 26 to around 40 by the end of the year.
“We have more clients than bodies,” Irvin said.
Irvin is also hoping to start procuring electricity for clients.
“If we are managing clients, we should be managing all energy needs including electricity,” Irvin said. n
