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HERE Maps Expanding Location Services In China

A trio of Asian investors — including Chinese location tech provider NavInfo, WeChat backer Tencent, and Singaporean banker GIC — are working with HERE have acquired a 10 percent stake in HERE as the mapping wars come to China.

HERE maps is capping a year that included a major rebranding and extended partnership with Microsoft by securing an investment from Asian backers that will bring the digital navigation platform into China as part of a wider global expansion effort.

The investment is coming from NavInfo, a provider of digital maps and location services in China, and Tencent, which runs the popular WeChat app and a range of other Chinese internet properties. GIC, a Singapore-based banking group, also participated in the financing.

The deal with HERE includes the formation of a strategic partnership among the three tech companies “to develop and offer best-in-class location services for the Chinese market,” according to a joint statement. 

The move comes after a year that has seen significant global competition for navigation and geo-data services. Much of that focus has been in the U.S. and Europe, but China has been on the radar of a number of tech companies in the space, as shown by the October alliance that was struck between geo-data specialist PlaceIQ and China e-commerce and online media holding company Alibaba.

An Entry And An Exchange

Specifically, HERE and NavInfo will represent equal halves of a joint venture in China that will market location services for Chinese “and global customers across a range of industries.” As tech companies based outside of China know, it’s fairly impossible to operate within that country’s borders without partners on the inside. Working with Tencent in general and NavInfo in particular paves the way for HERE to bring its brand into China quickly and without friction.

In exchange for the investment and entree into China, NavInfo, Tencent, and GIC are jointly acquiring a 10 percent stake in HERE.

That transaction changes the equation of ownership in HERE that has existed since Aug. 2015, when the mapping company’s original parent, Nokia, sold it for $3 billion to a consortium of Germany carmakers (AUDI AG, BMW AG and Daimler AG). If the stake in HERE by the Asian companies passes regulatory muster, the automakers’ shares in HERE will be reduced  in equal measure. The parties expect the deal to go through sometime during Q1 2017.

Just like the German car companies before them, the Asian firms see HERE as part of a larger vision that involve tapping into the location-driven commerce  and marketing, the emergence of Internet of Things, and the production of self-driving cars.

On top of all those uses, location services such as HERE can  gather real-time vehicle and smartphone positioning data that promises to increase safety on the road as well as — and perhaps, more importantly — allows brand to introduce location-specific offers and products to consumers.

NavInfoMapping Wars Move To China

As we’ve noted previously, the importance and challenge of offering location accuracy rests on the realization that roads and addresses change so often and that so much can go wrong if you can’t control the map that you do business on is what sparked the change in attitude toward digital mapping.

The idea of relying on an outside entity to ensure the accuracy of every lat/long is too great a risk for companies in the business of satisfying consumers’ location-related needs. And as Big Data becomes the backbone of all technology initiatives, the geo-data intelligence is becoming one of the most essential aspects of providing real-time services.

“Location is so fundamental to the on-demand economy, and HERE can help new start-ups to think about building their business instead of focusing on whether their latest deliveries made it on time,”Kirk Mitchell, 
VP 
for Consumer, Sales & Business Development at HERE, told GeoMarketing in May 2016.

“To be able to deliver a parcel from place A to place B, you need to know where both places are, the most efficient way to get there and what your estimated time of arrival will be.”

The demands by businesses and consumers for precise and immediate access to location-based services is still only just heating up. And that means the data powering those services is only going to become more expensive to invest in, especially since creating such programs are costly and time-consuming.

“Our intention has been to broaden our shareholder base to reflect how location intelligence will fuel invention and expansion across different industries in all parts of the world,” said HERE CEO Edzard Overbeek, in a statement announcing the Asian expansion. “We are therefore excited to welcome NavInfo and Tencent both as strategic investors who share our vision of the future and as partners with whom we will create attractive new services for the Chinese market. We also welcome GIC as a financial investor who values the long-term prospects of the company.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.