Almost a year ago, MapMyIndia promoters Rakesh Verma and his son Rohan were gearing up to take market leader Google head-on more than 25 years after the digital mapping company was founded.
MapMyIndia was profitable and had an over 80 percent market share in the automotive segment. The company now powers Apple maps and Amazon’s Alexa and works with startups Ola, Yulu and PhonePe.
The time is right to focus on the consumer segment, the Vermas told Moneycontrol last year, with the government push for self-reliance and Covid-19, which opened up opportunities for growth. As for an initial public offering, there were no plans yet, they said then.
A lot happens in a year. And it did for MapMyIndia, which is now going ahead with the IPO, aiming to file the draft prospectus by August 31, according to sources. The company is targeting a Rs 1,000-1,200 crore IPO at a valuation of Rs 5,000-6,000 crore. The IPO will offer an exit to existing investors Flipkart, Qualcomm and Zenrin, a Japanese map publisher.
Moneycontrol spoke to company insiders to understand why MapMyIndia opted for an IPO at this time, when many internet companies are looking to go public in India.
Internet IPO boom
Internet IPOs are the flavour of the season. After Zomato’s listing in July, a string of internet companies are at various stages of the IPO process.
Early this month, Nykaa filed papers for a Rs 4,000 crore IPO. Droom, an online marketplace for automobiles, raised pre-IPO funding of $200 million valuing it at $1.2 billion, and is preparing for a $300 million IPO in 2022, Moneycontrol reported earlier.
Digital payments firm Paytm is looking to launch a Rs 16,600 crore IPO by October, according to reports. Other companies looking to go public include PolicyBazaar and Delhivery.
Somehow, the IPO plans of MapMyIndia, one of the few profitable internet companies and probably the oldest, went unnoticed.
“The company wanted to stay under the radar,” said a person aware of the development, who did not want to be identified and is not allowed to speak to the media.
MapMyIndia started putting the plans in motion only in the past five months, according to people aware of the developments.
“The company has been profitable for a long time. The option to do it was always there but the company did not feel the need,” they said.
The company’s total revenue stood at Rs 163.5 crore in the year ended March 31, 2020, compared with Rs 162 crore in FY19 and Rs 161 crore in FY18. MapMyIndia’s profit was Rs 24 crore in FY20 against Rs 39 crore a year earlier and Rs 35 crore in FY18.
The company previously raised $1.4 million from Flipkart in 2015. It raised $44 million from multiple investors from 2006 to 2015, according to data from Tracxn.
The fundraising in 2015 allowed older venture capital funds Lightbox and Nexus Venture Partners to exit. Before that, it raised $30 million from Zenrin in 2011. Qualcomm was the lead investor when the company raised $9 million in 2009.
The strength of the stock markets and the government’s move to liberalise mapping seem to have prompted MapMyIndia to look at an IPO, according to sources.
Liberalisation of mapping, pandemic
The government opened up mapping early this year, making it easier for Indian entities to access and build on geospatial data owned by state-run agencies. Foreign companies will be able to license the data from the Indian companies. MapMyIndia is one of the biggest beneficiaries of this move.
“It opens up a huge opportunity as geospatial is a big play, especially in the drone space. The company feels that the market is at an inflection point and it is going to grow dramatically. MapMyIndia wants to have the ability to access and capture large markets. So being a public company, I think will give a lot of flexibility,” said a top company executive in the firm.
The other huge factor was the pandemic, which accelerated the adoption of e-commerce, food delivery and fintech platforms. Increased demand for such services also meant the need for mapping services that work with companies like Ola, Yulu and PhonePe. With the popularity of electric vehicles and connected cars increasing, MapMyIndia will be able to strengthen its play in the automotive sector, where it has a significant market share.
At this juncture, going public would give the company enough ready capital to scale up mapping services as enterprises accelerate their digital play and over time, go head-on with Google Maps.
25 years in the making
For the Vermas who have been building up MapMyIndia since 1992, away from the media glare, this is a key moment.
When Rakesh and Rashmi Verma came back home from the US almost two decades ago, digital mapping was almost non-existent in India. Having seen how digital maps were used in the US, the Vermas began licensing US mapping software.
It took 10 years to develop the mapping product. In the meantime, it worked with Coca-Cola India to map bottling factories and with Cellular One to identify suitable areas for mobile phone towers. It wasn’t until the early 2000s that the online mapping product was ready. The company now works with over 5,000 enterprise customers in India.With the planned IPO and Aatmanirbhar Bharat gaining momentum, the company has enough ammunition to not only scale up the business but also gain lost ground in the consumer map space.