Inrix IPO on Its Way

Global positioning system (GPS)–enabled cars and phones are driving the growth of real-time traffic information systems. From 2006 through 2011, the real-time traffic information systems market grew 43% to $309 million. The market is projected to continue to report strong growth statistics over the next few years as well. Analysts at Strategy Analytics estimate that globally, the number of navigation systems receiving traffic data will grow to 37.6 million in 2018 from 8.5 million in 2010.

Inrix’s Financials
Kirkland, Washington–based Inrix is one such company that is helping to deliver real-time, historical, and predictive traffic information to these navigation devices. Inrix has established a strong revenue model. Contracts with customers such as Ford enable Inrix to charge a fixed fee for each car Ford sells that has the Ford SYNC in-car technology system. Inrix’s technology helps power mapping and traffic information analytics for automobile manufacturers, governments, TV, and radio stations. Its customer list of more than 200 corporate names includes Garmin, UPS, MapQuest, and BMW.

Inrix relies on road sensors and its corporate customers for traffic data. Customers are asked to share data with Inrix in return for traffic data sold by Inrix. Using these terms, it has data on nearly two million miles of road network in 35 countries from more than 100 million vehicles. It has also entered into partnership with mobile carriers to enable them to track traffic using the movement of mobile phones from tower to tower.

Inrix believes that it operates in a $20 billion global opportunity. It is working toward global expansion and plans to have data for more than 50 countries by the end of the current year. In addition, it is working on integrating more traffic-related relevant information into its products. For instance, it is working on being able to offer data on nearby parking availability and costs and building apps that would show a driver the weather on the route that he is planning to take.

To date, Inrix has grown through venture funding. It received $68.1 million from investors that include August Capital, Venrock, Bain Capital, and Kleiner Perkins Caufield & Byers. It does not disclose financials. Analysts speculate that Inrix is preparing for a $100 million IPO this year. Last year, the company hired Saul Gates, former senior vice president of finance and chief accounting officer at Coinstar, as CFO and is also expected to have appointed Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. for this IPO. Inrix has neither confirmed nor denied such speculation.

Revenues are not known, but the company claims that revenues grew 75% last year and that it brings in profits. For now, Inrix is said to be considering an IPO at a valuation of $1 billion for later this year.

The traffic app market recently made big news when Google announced a billion dollar–plus acquisition of social traffic app maker, Waze. Unlike Waze, which was still struggling with a defined monetization model, Inrix has the advantage of an established customer line-up and revenues that have reportedly grown 75% each year and have helped them to deliver profitable operations. Inrix was valued earlier at $0.75 billion-$1.0 billion.