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PhonePe-backed digital mapping company MapMyIndia files for IPO

Written by Moulishree Srivastava Published on     4 mins read

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MapMyIndia is reportedly looking at a USD 164 million (INR 1.2 billion) IPO at a valuation of around USD 684–820 million (INR 50–60 billion).

Indian digital mapping company MapMyIndia has filed for an initial public offering (IPO) with the Indian market regulator SEBI. This makes it the fourth profitable internet company to target public markets this year after travel broker ixigo, lifestyle retailer Nykaa, and used car marketplace CarTrade.

The company’s offer comprises an offer for sale (OFS) of up to 7.5 million equity shares by existing stakeholders. This means MapMyIndia’s IPO is going to be an entirely secondary share sale and is primarily aimed at giving its backers a partial exit. The company will not raise any money through its listing. Those who will be selling their stake include Rashmi Verma, co-founder and CTO of MapMyIndia, American tech giant Qualcomm, and Japanese map publisher Zenrin.

While Rashmi currently owns 17.6% of the company, Qualcomm and Zerin hold 8.48% and 17.82% shares, respectively, in MapMyIndia. Notably, Walmart-owned Indian digital payments firm PhonePe, the largest shareholder in MapMyIndia with a 36.1% stake, will not be offloading its shares.

MapMyIndia did not disclose the size of the IPO in the draft red herring prospectus that it filed earlier this week. According to a report by local media Moneycontrol, MapMyIndia is looking at a USD 164 million (INR 1.2 billion) IPO at a valuation of around USD 684–820 million (INR 50–60 billion).

Rise of the digital mapping giant

Founded in 1995 by husband and wife duo, Rakesh Kumar Verma and Rashmi Verma, MapMyIndia provides digital maps, geospatial software, and location-based IoT (internet of things) technologies. According to the draft papers, the company’s digital maps cover 10.54 million unique destinations and 6.29 million kilometers of roads in India, representing 98.50% of the country’s road network.

Moreover, its digital map data provides location, navigation, and analytics for 17.79 million places like restaurants, retail shops, malls, ATMs, hotels, police stations, electric vehicle charging stations, as well as 14.51 million home or building addresses. Since its inception 26 years ago, it has serviced 2,000 enterprise customers.

For the financial year (FY) ending March 2021, it had over 500 B2B2C customers across the automotive industry, BFSI, telecom, FMCG, logistics, and government enterprises. The company said 80% of all cars in the Indian market use its navigation solutions. Other big wigs that use MapmyIndia maps include Apple, Paytm, PhonePe, McDonald’s, Rebel Food, Grofers, and Cars24.

Aside from providing enterprises digital maps, geospatial data products and analytics, location and navigation platforms, and location-based IoT, fleet, and workforce automation products, the company also offers a consumer app for maps, navigation, tracking, and safety, a digital mapping website, and IoT gadgets comprising GPS tracking, safety, and navigation features.

MapMyIndia’s big break came in 2015 when Indian e-commerce giant Flipkart picked up one-third of the company’s shares in a USD 260 million deal that gave exit to its early investors, Nexus India Ventures and LightBox.

At the time, Bengaluru-based online retail major said MapMyIndia’s offerings will give it a competitive edge in terms of supply chain and logistics and help it track shipments in real-time, verify addresses and reduce package theft. Earlier this March, Flipkart transferred its entire shareholding in the company to its subsidiary, PhonePe.

The development comes a month after India released new geospatial regulations that allow all Indian entities to freely acquire, collect, generate, prepare, analyze, store, or distribute geospatial data, including maps.

“MapmyIndia stands to benefit from this as it would help the company to have an additional regulatory advantage over its global competitors,” the company said in the filing. “All foreign players…TomTom, HERE, MapBox, Esri, Trimble, and Google Maps are required to partner with local players via licensing their APIs for restricted data, which is not permitted to pass directly through their servers.”

Over the last few years, MapMyIndia has also established its presence in Sri Lanka, Bangladesh, Nepal, Bhutan, Myanmar, UAE, and Egypt. Internationally, it operates through its brand Mappls. In the last financial year that ended on March 31, 2021, the company stated that 35% of its total revenue from operations came from customers outside of India.

The road ahead

MapMyIndia is one of the few profitable Internet companies in India. In FY 2021, its revenues stood at INR 1.9 billion, up 17% over a year-ago period, whereas its profits rose a whopping 150% to INR 594.33 million compared to FY 2020. However, the company depends on a limited number of customers for a significant portion of its revenues.

“The number of customers that accounted for 80% of our revenue from operations in financial years 2019, 2020, and 2021 was 17, 22, and 25 respectively,” the company said. “As a result, the loss of even a single customer could have a significant impact on our financial results.”

Our growth depends on the growth of our key customers. If our key customers do not successfully enter into new growth segments, we may be prevented from capitalizing on new growth opportunities,” it added.

The company said it would continue investing in R&D and human resources. Meanwhile, it is seeking to expand its customer base in the Middle East and Southeast Asia, offering the full range of its products and services. Moreover, it plans to enter North America and Europe, where it will provide specific services such as indoor maps.

“We will segment our offerings and approach to international expansion, offering different solutions to different country markets based on the local market needs and landscape,” the company said. “In order to cater to the growing market demand for our products and solutions and expand our presence across India and other countries, we are in the process of deepening our presence in diverse sectors and use cases.”

According to Frost & Sullivan, the total Indian addressable market of digital maps and location-based intelligence services is expected to reach USD 7.74 billion in 2025. Globally, the digital map services market—comprising digital maps, map development and integration service, and geospatial analytics—is projected to grow to USD 151.9 billion over the next four years.

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