Last summer we heard that German startup Skobbler was being courted as an acquisition target, in the wake of Google’s purchase of Waze. Today Skobbler has achieved that exit — albeit not Waze-sized — selling to Telenav, maker of the Scout navigation app, in a deal worth just shy of $24 million.
The acquisition, which closed on January 29, saw Telenav shelling out $19.2 million in cash to buy Skobbler, along with $4.6 million of company common stock — making a price-tag of just under $24 million for the Berlin-based startup that was founded back in 2008.
Skobbler has built a business out of transforming OpenStreetMap (OSM) data into a series of consumer apps — such as the hybrid online/offline maps app, ForeverMaps2 — as well as licensing its mapping engine technology to third parties so they, in turn, can plug OSM data into their apps — as an alternative to paying to use Google Maps (or another proprietary mapping data provider).
Telenav, which up to now has also been utilising OSM data behind the scenes, said today it plans to integrate OSM data into its free Scout navigation app. So buying OSM specialist Skobbler gives its Scout app a route into international markets where the app has not previously been offered.
“What we’re doing is taking Scout international basically with this acquisition. We’re rolling OSM into it and we’re taking that to be an international product offering,” Telenav’s director of traffic and navigation services, Ryan Peterson, told TechCrunch.
Scout is popular in the U.S., where the company says it has consistently achieved top three rankings in the App Store’s free GPS category rankings (it does not break out specific download figures), and has also consistently ranked ahead of Google Maps on Play in the U.S.
The clear competitive target here is Google Maps consumer apps, according to Peterson. “Looking at Google, compared to OSM and navigation, we’ve positioned ourselves very well now to leverage OSM — it’s basically crowdsourced and open which is very different than the Google model. And that is accelerating very rapidly,” he said.
Telenav said it sees huge potential for OSM’s open alternative to attack Google Maps in the consumer space — noting that OSM can offer very highly detailed mapping data, with features such as trees and pedestrian paths included, as well as basic roads.
“OSM is actually a lot more detailed than what Google offers,” said Peterson. “And it’s just a matter of time before OSM is, globally, far better than Google Maps from that perspective.”
“It’s amazing how many people are contributing into OSM. A great example is if you look at Sochi in Russia where the Olympics are being held… the detail around the mountain resort and the city and the village is far more drawn out in OSM than it is in Google Maps. And you know that Google is there mapping this stuff right, it’s the Olympics.
“You just can’t compete with an open crowd.”
Another differentiation route vs Google Maps is by app feature-set, with Skobbler having built offline maps capabilities in some of its apps, for instance, and Telenav focusing on adding commuter friendly traffic info to its apps, couple with consumer friendly UIs.
Telenav has quietly been preparing the ground to use OSM as a differentiation engine for its consumer navigation apps vs the Mountain View flavoured competition. Back in September OSM founder, Steve Coast, (then at Microsoft) announced that he was joining the company to work on OSM and lead its crowd-sourced mapping initiatives for its Scout navigation services.
Today’s acquisition of Skobbler makes plain the scope of Telenav’s hopes and ambitions for OSM-powered mobile navigation.
“We’ve basically rolled up all industry expertise that’s out there for OSM navigation,” said Peterson. “Steve Coast… is intimately aware of all of the underpinnings of the OSM data structure, everything. We’ve got that all under one belt, so we can now move fast and quite frankly be extremely competitive with Google.”
Writing in a blog announcing the news, Coast also fleshed out the scope of Telenav’s OSM strategy — saying he’s gunning to grow OSM’s contributor base to seven million in the next “year or two” (up from the current 1.5 million registered editors) to help it compete with Google’s closed approach.
And the engine for OSM’s growth — beyond its own doubling ever year momentum — is Telenav’s strategy to get OSM data into the hands of more mobile users as a navigation aid vis apps that reach further afield.
Today, OSM is a repository of quality map data, with more coming in than going out. I want to change that. Now it is time to leapfrog the simple design use cases – the economically efficient background usage of the map. It’s time to take OSM and harness it for everyday navigation. That’s where the users are and where we can really make difference.
Turn-by-turn navigation on our phones is the way most people in the world use maps today, and it takes incredible effort and work from companies like Telenav and skobbler to mold OSM in to something a consumer will get a thrill from using. That’s what we’re focused on: getting OSM in to the hands of the everyday person, so that it’s part of our daily lives.
I’d like it to get OSM to seven billion contributors in the next year or two. The only real way to get there is to allow a significant amount of consumers to get their hands on the map. I want more mobile users to have the chance to navigate with it and provide feedback as they go. This feedback can be implicit in their GPS trails, or explicit in their feedback to us as they tell us where the map needs improvement.
Since OSM’s mapping data is free for anyone to use, being as it’s generated by crowd-contributions, you may wonder what exactly Telenav is shelling out for here. But the key is the technology Skobbler has developed on top of OSM to allow for the application of OSM’s static display map data into those consumer friendly and feature rich navigation apps Coast is discussing.
So essentially, by buying Skobbler, Telenav is combining two complementary OSM efforts — its own, primarily in the U.S., and Skobbler’s primarily in Europe — to put more fire power behind OSM as a Google Maps challenger.
Skobbler has an SDK to allow developers to license its OSM mapping engine, and that’s another route the acquisition can help Telenav build out its reach, said Peterson.
“Google Maps is actually very expensive for developers and they’re looking for an OSM alternative. But OSM data is different from display of that data — you need a layer of software on top of the data to make it work, and so that’s really why people are looking at Skobbler as a technology provider for their applications. And we will, I think, see a lot of new deployments with OSM in very popular applications globally using OSM for that reason.”
“Our interest in Skobbler is the people, a super talented team; it’s the technology that they’ve developed on top of OSM; their OSM expertise; and their engine and their application,” he added. “It really matches everything we’ve been doing internally for making OSM navigable… so it basically doubles our capacity. Combining those two together gives us this worldwide coverage.”
Making OSM “navigable” boils down to taking the core OSM data from a “great display map” — made up of visual roadways and pathways created by volunteer contributors — and building it into apps that also pull out/draw on underlying meta-data — such as road speed limits and road characteristics — to make the core OSM mapping data more useful and accessible.
“Those types of attributes underneath the road geometry are things that people in the OSM community generally don’t contribute into the database,” Peterson added. “So there’s a lot of technology behind the scenes to figure out that type of data using GPS probe data, using fancy algorithms, using sophisticated routing engines and those types of things where there’s a lot of innovation in technology that otherwise one wouldn’t know.”
Peterson said Skobbler’s European offices, in Germany and Romania, will remain post-acquisition — with its Berlin office giving Telenav a base for its international expansion strategy.
It’s not yet clear what will happen to Skobbler’s own suite of apps post-acquisition. Telenav’s Peterson said it’s too early to say, but it’s worth noting that Skobbler’s apps (which have had around five million downloads to date) are predominantly paid, whereas Telenav’s Scout is a free download (monetised by ads and premium upgrades).
Back in 2012 Telenav bought mobile ad network startup, ThinkNear, which it uses for its own app monetisation — helping to flesh out that side of its apps business model.