Softbank has continued its diversification strategy with another sizeable investment, this time in the big, wide world of mapping technology.
It might not sound like the most exciting arena, but it could be considered one of the most crucial for certain technologies. Whether it is as something as obvious autonomous vehicles, or a bit more subdued like the advertising models associated with social media platforms, accurate location data is critical. And we haven’t even begun to realize the benefits of IoT yet…
The injection of cash from Softbank Vision Fund is directed towards Mapbox, a location data platform for mobile and web applications operating out of Washington DC and Silicon Valley. Many would associate mapping technology with the Googlers, but Mapbox has been quietly accumulated customers and might provide a very viable alternative to the ‘do no evil’ business. An additional $164 million in Series C funding will certainly help mount a challenge.
The platform was initially launched in 2010, and now claims to reach 300 million people each month. When you count the likes of Snapchat, Bloomberg, Lyft or Lonely Planet as customers, the broad footprint starts to make a bit more sense. The team also claim to have 900,000 registered developers, and the cash will be used to build out the automotive unit (including the AI side), AR/VR/Gaming investments and increasing its presence in Southeast Asia, China, and Europe.
“We are mapping and measuring everything,” said Eric Gundersen, CEO of Mapbox. “The SoftBank team understands that location data is transformational to every industry. Additional capital accelerates our speed of capturing the market. This is a step function move that will transform the fundamentals of how everything – people and goods – move through our world.”
It’s an area of the industry which hasn’t received much recognition to date, perhaps because it is being dominated by Google. Just like doing an internet search, when people are looking up a location, Google seems to be the default platform. There is a simple reason for this, it is the best around. And there is another simple reason for that. Google has been investing in this area for quite a while, even before you could make any money from it.
The platform itself was started when a couple of Danish brothers sold their business (Where 2 Technologies) to Google in 2004. The first release was not until 2005, but twelve years later the platform has thousands of employees and contractors directly working in mapping. This is a brilliant example of a company investing in the long-term, a concept which seems to elude most executives.
To start with it was just a free feature for people to find their way. The connected economy wasn’t in full swing, and it was more useful for games than anything else. But with smartphones penetrating the mass market, it started to become a useful little idea. Apps wanted to integrate the platform, businesses could use it for advertising, and little ideas like autonomous driving are now starting to make waves.
Mapping is critical in the digital economy, and now that quirky little feature is looking like a very astute bet from the Googlers. Just like Android, it is a platform which doesn’t make any money directly, but fuels growth and innovation in other areas. Google’s bread and butter revenue machine is search advertising, and now Maps adds an extra dimension. This is on top of all the licensing fees it will be charging developers.
One risk for the industry is that mapping could end up going the same route as operating systems for smartphones. Android dominates this space, which has led to competition concerns in various countries around the world. Google Maps is arguably the most advanced platform out there, so this is certainly a viable concern.
Considering the importance of mapping technologies as a foundation block of the connected economy, this would appear to be a very smart bet from the Softbank team. The only risk is that the Mapbox is not able to compete with the innovative and cut-throat Googlers. Only time will tell, but $164 million will help.