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Tuesday, November 01, 2011

Digging Into the SimpleGeo Acquisition by Urban Airship

The news broke about the acquitiion yesterday (APB coverage), which will retain the Urban Airship name. The all stock deal is estimated at $3.5 million. Reports put the funding levels of the two companies at : 

Urban Airship - $6.5 million

SimpleGeo - just under $10 million 

New product announcements are expected next week and the new company does not plan to make any immediate changes to its offerings on either side of the house.

First off, let's review the nature of the companies, which I'd classify as "on the edge" of professional GIS and more in the mobile platform space. 

Who are these Companies?

SimpleGeo was founded by Joe Stump (who served as lead architect at Digg) and  Matt Galligan (who founded SocialThing and sold it to AOL) in 2009, the same year as Urban Airship. Jay Adelson (an early CEO of Digg) signed on as CEO in Nov 2010. It's based in San Francisco and will add 13 employees to Urban Airship (I read SimpleGeo has 25). All three of the leads above will serve as advisors to Urban Airship. The company itself had a hard time explaining what it does. That was a regular point of contention on the now defunct The Week in Maps podcast.

From the company website:

We make it easy for developers to create location aware applications.

homepage

We started as a mobile gaming startup ...but we quickly discovered that the location infrastructure and services needed to support our ideas didn't exist, so we began building it all ourselves.

We found what we were doing so exciting and challenging that we decided to do it full-time, and thus... SimpleGeo was born. 

Simple Geo About Page

The company offers clients, tools and, SDKs but exactly what differentiated those things, which many others also offer, was unclear. I suppose it was supposed to be the "simple," but I never got the sense that was emphasized.  With $1.5 million in funding in 2009 (and some before that), the plan was to be a pure API play. The company got lots of buzz from the tech media (GigaOm, ReadWriteWeb and TechCrunch) but very little from the geospatial media. The last contact I had with the company this spring was basically me asking for a meeting when the company had something for GIS users. The reply was such an offering was ahead, but I was never contacted. I was also disappointed that I didn't hear about new clients or users. The company seemed to be in stealth mode from start to sale. That may have been the goal.

Urban Airship was further off my radar. It's based in Portland and has about 38 employees. Per its homepage:

The Urban Airship platform is the engagement and monetization engine behind thousands of the world’s most successful mobile apps.

Of the logos of apps on its homepage I recognize Gowalla and Fox, though an October press release cites 20,000 customers. The featured customer list includes LivingSocial, Slate, ShopKick and the White House. SimpleGeo is cited as a strategic integration partner.

The vision is very much the same as SimpleGeo in the sense of enabling developers: 

When it comes to back-end mobile app development, we do the heavy lifting – so you can focus on building more mobile apps.

What the Companies have to Say on the Acquisition

Both cite the previous relationship as a starting point:

We’ve learned that our customers (brands, retailers, etailers, media, social networking sites, games and others) want more than just generic tools. Instead of building blocks they want a complete solution that can be used by the entire company to help engage, monetize, locate and understand their mobile user base. 

- Scott Kveton, Urban Airship Blog

It became clear to us that together, we could create services much, much bigger than just push notifications and location!

- Jay Adelson, SimpleGeo Blog

What the Press is Saying

Adam DuVander at Programmable Web cites the acquisition as confirming a trend toward the API as product. He observes both comanies were still tweaking their offerings for a workable business model:

SimpleGeo launched to great excitement, but has struggled with its approach to pricing. The company most recently switched off its free plan, but provides free trials at all levels.

Programmable Web

Marshall Kirkpatrick at ReadWriteWeb cited a comptitor as noted how a pure API play can be difficult sell. That, he offers, my be why SimpleGeo never took off. 

RWW

Michael Arrington, writing at Uncrunched (who broke the story) described the acquistion as a "soft landing" for SimpleGeo. "But at least the service may live on," he continues. I read that as "things weren't going so well."

Uncrunched

My Take

We are at the edge of my expertise as we talk about APIs as a product and the mobile space, but I'll chime in with one thought. The vision I've been hanging on to is the one where a developer will pull different services from different players in a sort of "one from column A, one from column B..." approach. The more the services get bundled into these larger groups (Google being one of the largest providers) the less likely that is to happen. Moreover, as one commentor to Uncrunched suggested, the more of those services an API company can offer, the less likely a Google or other large player is to step in and take away all of your customers. He went so far as to say that should have been the vision for Adelson at SimpleGeo - to knit all the required bits for a mobile platfform together. 

by Adena Schutzberg on 11/01 at 03:09 AM | Comments | Bookmark and Share

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