INRIX Riding High on Apps Using Traffic Data

According to a market research report released last year, World GPS Market Forecast to 2013, from 2011-2013 the shipment of global positioning system (GPS) devices is projected to grow at more than 20% to 900 million units. Growth is fueled by technology convergence that is enabling GPS services in smartphones and other consumer electronics such as cameras. The report estimates that the number of subscribers to GPS-enabled location-based services (LBS) will translate to a market opportunity of $10 billion by 2013. Within GPS devices, there is also strong growth among the number of navigation systems that receive traffic data. Strategy Analytics believes that the number of traffic-data-receiving navigation devices will grow from 8.5 million units in 2010 to 37.6 million in 2018.

INRIX’s Business Offering
Kirkland, Washington–based INRIX was spun off from Microsoft Research in 2004 to cater to this market. INRIX offers services that help deliver real-time, historical, and predictive traffic information. The flagship INRIX Connected Services offers content services that help navigation OEMs and location-based service application developers with private label and go-to-market solutions for in-vehicle wireless phones and other connected devices. Another product, INRIX Total Fusion, integrates real-time and historical data to offer predictive traffic information. Their real-time offerings include real-time traffic data and traffic speed maps, accident, event, or construction related information, and nationwide traffic alerts for congestion on freeways, highways, and arterials.

Although INRIX does get most of its revenues from the U.S., it has operations in 22 countries. Their biggest customers include Ford, Clear Channel Communications, MapQuest, the I-95 Corridor Coalition, and even Google Maps. The company is planning to expand its operations in China, Brazil, and Russia. INRIX’s revenue model is based on that of their customers’ sales: They charge customers a fixed fee per unit sold. For example, they earn revenues for each Ford car sold with the Ford SYNC in-car technology system.

INRIX’s Mobile Expansion
INRIX’s services are also available on leading mobile apps. Their data are used by nine of the top ten traffic apps on both Android and iPhone, including MapQuest Mobile, Telenav, and Navigon. Besides offering their information through these apps, INRIX also offers their own free and premium versions of a mobile app that is available for download on iPhone, Android, BlackBerry, and Windows Phone 7 devices. Since its launch, the app has recorded downloads of more than two million times.

INRIX’s International Growth
As part of their international growth plans, INRIX bought UK-based ITIS Holdings last year for $60 million. ITIS Holdings is a provider of traffic data in Europe. The move helped INRIX add more than $27 million in annual revenues and 70 customers to their portfolio, including the BBC local radio network for traffic updates. In addition, they were able to expand their presence to markets that include Australia, Brazil, South Africa, Singapore, the UK, Germany, and Russia.

To date, INRIX has received venture funding of $68.1 million. Their investors include August Capital, Venrock, Bain Capital, and Kleiner Perkins Caufield & Byers. Their revenues are not known, but they claim that revenues grew 75% last year and that they bring in profits. Riding high on this performance and market potential, INRIX is looking to launch their IPO later this year at an estimated valuation of $0.75 billion to $1 billion.