GeoLoqal is a mobile platform-as-a-service specifically designed for building location-specific applications with complex geo-targeting functionality. Its main value proposition is that by using its “Snap In” geolocation related functionality, developers, OEMs/ISVs and enterprises can build powerful location based solutions without investing in development/testing and reduce the time to market.
GeoLoqal was founded in 2012 by Ronnie Guha and Amiya Mansingh who had worked together for four years at a consulting firm. Ronnie, an IIT Chemical engineering graduate, has spent more than half of his 15-year career selling professional services and solutions at companies like IBM, Informatica, Oracle/BEA, and VMware. The idea for GeoLoqal came while Ronnie was testing out his parking finder app, SpotNPark. He realized that there was no platform that could provide a robust, scalable way of simulating and testing user motion or geolocation dependent apps across the world.
Ronnie then reached out to Amiya who had founded Cobi, a consulting firm. Amiya had also built about 40 mobile apps and had a deep understanding of the complexities involved in Geographical Information Systems (GIS) computation/calculations. Amiya understood the concept and the need for a platform like GeoLoqal.
Amiya and Ronnie financed the company for the first couple of months with their own funds. They then took on big data consulting projects to finance the company. They went live with the product in January 2013 and using SEO and social media marketing actively, they hit a peak of 120 visits per day. With a freemium model, they soon had about 300 users. However, they removed the freemium version when conversions became a challenge. They now have a per device pricing model and revenue is at $100,000. The company expects to be profitable in the first quarter of 2014.
For Location Simulation, GeoLoqal charges setup fees in addition to $ 19.99/month/app for up to 5,000 API calls. For Geotargeting with GPS, the company charges about $1-2 per device/month with some cap of API calls/month in addition to the setup fees. For geotargeting using mobile numbers, it charges 2 to 8 cents per location lookup. Its onsite license is $250,000 per production seat and $125,000 for unlimited development.
For the total available market (TAM) using the bottom up approach, Ronnie has considered the number of mobile devices under management (MDUM) and has used a penetration rate of 0.5%. According to his research, about 80% of mobile users prefer locally relevant advertising and about 50% mobile users are willing to exchange location tracking for more relevant content. There are about 1 billion mobile devices in the Americas and on an average, these devices would be tracked every 15 mins for about 8 hours a day. This would translate to about 30 location lookup calls/day/device or about 900 calls/month/device.
At just 0.5% devices being geo targeted at $ 0.04/call, the TAM would be $ 70 million per year. For geotargeting using GPS, the TAM would be about $60 million per year (for 1 billion smart phones worldwide at an average of $1/device/month and a penetration of 0.5 % opted-in devices). To avoid double accounting of mobile devices vs smart phones and non-smartphones, the TAM is estimated to be between $ 60-70 million per year.
The top target segments for GeoLoqal are mobile application development firms, mobile testing firms, Navigational and location based ISVs like Garmin and Navteq, M2M companies like OmniLink, and mobile ad networks looking at investing in geotargeting capabilities. It is also targeting telcos for revenue sharing arrangements for being featured in development communities.
Its Go To Market strategy has been direct and channel partner sales. For channel partnerships, GeoLoqal has tied up with StackMob and Mashape. For direct sales, SEM and LinkedIn Marketing have been most successful for lead generation. The company has reduced its development costs significantly and will be increasing its marketing efforts and costs in the near future.
Right now, the company is focusing on enterprise customer acquisition only. Ronnie expects the first ten enterprise sales will help define the profitable verticals that they will need to target aggressively. It will build on partner channels and OEMs in these verticals.
Ronnie says the company is not looking to raise funds in the near future. However, the company will certainly consider strategic investments from a telco/VAS provider/M2M device company/ad network with a large distribution channel.
Regarding exit, Ronnie says “If we do exit, it will be via a technology acquisition in one of the key verticals we are currently targeting. The goal, currently, is to provide profitable returns to its owners and investors.”
This segment is a part in the series : The 1M/1M Incubation Radar 2013