Digital mapping company MapmyIndia is banking on growth in its analytics business and its overseas expansion efforts to achieve ₹1,000 crore in revenue by 2027. However, the company might face challenges on the way, including heightened competition in both its legacy maps business and its new analytics offering.
Rakesh Verma, co-founder, chairman and managing director of CE Info Systems, MapmyIndia’s parent company, told Mint in an interview, “The analytics business is expected to grow significantly, alongside the expansion into international markets, particularly Southeast Asia through our office in Korea… We anticipate growth in the automotive, corporate, and government sectors, leveraging ClarityX's focused analytics capabilities.”
ClarityX, an artificial intelligence-based data analytics and consulting services company, was recently rolled out as a separate entity by Rakesh Verma and his fellow promoter and wife Rashmi Verma, who is also chief technology officer of MapmyIndia. It is headed by Rakhi Prasad, co-founder of ClarityX and non-executive director at MapmyIndia.
Prasad told Mint, “We are leveraging MapmyIndia's relationship with customers and providing them with ClarityX’s value-added offerings to help solve their problems. Our first approach is capitalising on all the MapmyIndia’s goodwill and customer base. Initially, we will focus on India.”
Asked why the company chose to branch out into analytics, an investor and industry expert, who did not wish to be named, said, “When growth tails off in your core business and it's profitable, there is no ability to deploy more capital into the same business. With inflation next year, growth is normal and your competition holds some part of the market, so you're seeing that this has naturally stabilised now. So rather than spend money on it, you'll actually try to keep costs the same or less.”
“Now for growth, you'll have to take adventurous risks in some other business models. They are using an adjacency where they are already serving their customers. Customers use an analytics tool or a consulting tool to make more sense of the data that Mapmyindia provides anyway, so they are trying to build a service layer themselves.”
Rohan Verma, CEO and executive director of MapmyIndia said, “There are many growth opportunities for MapmyIndia across all our business areas. These are not either-or scenarios. We are doing quite well in the mapping space and in the automotive OEM (original equipment manufacturer) space, and of course in the IoT (Internet of Things) space too. In addition, as a company we want to keep growing and unlocking our potential across a range of business areas. And for that reason we are seeing to it that the analytics opportunity is well covered.”
Along with the analytics business, analysts at Goldman Sachs believe the IoT business will also lead the way. “We expect the company to maintain high margins driven by a pickup in IoT led business growth (which offers more revenue opportunity for high-margin mapping), supported by newer opportunities in people/goods mobility and the auto aftermarket, vs the legacy auto OEM business,” they wrote in a report published last week.
“In January, MapmyIndia won a [ ₹400 crore] contract for the next five years from Hyundai and Kia. A pickup in Hyundai and Kia sales, supported by premiumisation and electrification, should result in accelerated revenue recognition for the company, starting in the second quarter of FY25,” the report added.
Rakesh Verma said the company has several large deals in the funnel and hopes to materialise some of these in the corporate, automotive and government sectors.
In FY24 the company recorded a total revenue of ₹379 crore and a net profit of about ₹134 crore. Goldman Sachs said in its report that it expects revenue to grow at a compound annual growth rate (CAGR) of 38% from FY24-FY27E and a steady Ebitda margin in the 38-41% range.
MapmyIndia has had huge success in providing navigation software to auto OEMs and has a more than 80% share of this market. The Goldman Sachs report highlighted, however, that it faces increased competition on this front as well, with some automakers looking to switch to their own mapping platforms. Ola Electric, which once used MapmyIndia’s maps for its built-in navigation, switched to a system developed in-house recently.
However, Rakesh Verma said the company is still negotiating with Ola for the right price and may have not lost it as a customer yet. “The IoT and mobility sectors are also growing, and wins with OEMs such as Hyundai and Kia are expected to contribute to revenue starting from Q2 of this financial year,” he added.
“We are continuously working on the tech, and bringing in new tech in our suite of products for automotive and connected services. With the way we work, we have avoided losing our customers so far,” he added.
Meanwhile, MapmyIndia’s Mappls app, a direct competitor of Google Maps and Apple Maps, has had its own set of challenges. MapmyIndia has been in the digital mapping space since 1995 and has offered consumer internet mapping services since 2004. But the company had to vacate B2C mapping and navigation after Google used its dominance with Android to win customers in this segment.
Mappls has about 22 million users in India, a fraction Google Maps’ 60 million active users in India as of December 2023.
“So far, we have achieved this practically without spending on advertising. However, in the future, we will do it carefully, ensuring that any growth in the MapmyIndia app also translates into revenue from activities related to the app,” said Verma. These activities include MapmyIndia gadgets, the IoT consumer segment, advertising, travel-related services, and collaborations with automotive OEMs, he added.
The new analytics business offers indices, machine learning models and insights to solve three broad areas where customers face problems: market expansion and market entry, cost optimisation, and risk and fraud assessment.
It may also face stiff competition from companies of all sizes – from the Big Four consulting firms (PwC, Deloitte, EY, and KPMG) to startups.
“There are a lot of analytics and consulting firms. But are they doing stuff around geo-mapping and tagging? Are there any specialists in that vertical? Perhaps not, because it's too niche. The business might be worth $50-100 million worth, but it's super fragmented. MapmyIndia may be going after that,” said the expert quoted above.
Rohan Verma said, “The unique offering of the ClarityX-MapmyIndia combination gives us a distinct edge in our value proposition for customers and hence a strong right to win in this space.”
Rakhi Prasad added, “Our strategic partnership gives us access to not only a lot of multi-dimensional static datasets but also real-time datasets and software tools for visualisation and dashboarding. These tools and datasets give us the speed to go to market and provide solutions to customers across industries.”
The company did not disclose which of MapmyIndia’s existing clients it would target this year. These clients include Hyundai, KIA, MG Motor in the auto and mobility sector; HDFC Bank, Bajaj Finance and PhonePe in the consumer and enterprise sector; and the GST Network, the UP police, and the ministry of panchayati raj among others in the government sector.
On Wednesday, Rakesh Verma reportedly sold 500,000 shares of the company in ₹115-crore block deal, but was quick to add that this represented less than 1% of shares and that the promoters had no intention of selling any more.
“I have been doing philanthropy and investing in startups as per my commitment to an Aatmanirbhar, Sarvottam Bharat. I want to continue to do so and for that this is the first time I am raising funds as a public company promoter, including during the time of the IPO wherein I had not sold shares,” he said.
