Flipkart in talks to buy stake in MapmyIndia

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Homegrown ecommerce marketplace Flipkart is in talks to acquire CE Info Systems Pvt Ltd, which runs MapmyIndia. MapmyIndia is a digital mapping company, to help the marketplace strengthen its logistics and customer analytics. Flipkart could shell somewhere between $60 Mn to $75 Mn to acquire a majority stake in the company.The deal size could be around Rs 500 crore and the promoters could, however, retain some stake in the firm. Also, this deal would allow all investors of MapmyIndia to get an exit. The company is backed by financial investors, Lightbox Ventures and Nexus Venture Partners, who have around 25% stake in the company and strategic investors Qualcomm Ventures and Zenrin Co Ltd.The company has so far raised about R264 Cr and earlier in March this year. It was planning to raise about R126 Cr in order to provide exits for its financial investors.

The company was founded in 1995 by RakeshVerma and RashmiVerma. MapmyIndia provides navigable map and geographic information systems (GIS) solutions. It offers GPS navigation devices, GPS navigation software products, store locators, vehicle tracking products, APIs for Internet/wireless LBS applications, print and digital maps, decision support systems, and utilities products. The company also operates an Internet portal for maps, directions, and local search. The company has raised about $42 Mn (INR 264 Cr) till date.
The deal is being negotiated between the two companies directly and no investment banker has been appointed. A large chunk of its revenues comes from automakers, besides other enterprises and government users. Industry trackers believe that location is becoming increasingly important to understand consumer behaviour and with  MapmyIndia’s database across big metros and small towns could be an asset to e-tailers.

With mapping information one can ensure that deliveries are done more effectively, besides guiding them on how a company can set up a hyper-local distribution and warehouses. It can create a huge competitive advantage to have a system like this which is proprietary. Even in markets like China, players, including Alibaba, have forayed into the space with acquisition of mapping services company AutoNavi Holdings for $1.5 billion in April 2014 before its public offering on NYSE.

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