MapsPeople

Why have you chosen an initial public offering instead of venture funding?

We have chosen an initial public offering because we want to focus on the long run. With an IPO we open up the opportunity to support the company’s goal of a required and continuous growth towards becoming the global leader in indoor mapping. An IPO is a structured way to a greater capital increase where venture funding can demand more steps with a shorter term horizon. Further, an IPO offers the opportunity to raise additional capital if we need to, for instance, invest further in the growth. Finally an IPO will make the company more transparent which can be used actively in the sales process as larger clients appreciate knowing about the company’s development and ownership.

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Will the DKK 85 million be sufficient for you to become cash flow positive or will you need to raise additional capital?

With the current arrangements there will not be a need for additional capital. Our budgets for the upcoming three years include a buffer of approximately 15 pct of the DKK 85 million until the company will become cash flow positive in the second half of 2023.

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Who are the investors today before the IPO?

The ownership of MapsPeople prior to the IPO consists of three parties - a holding company owned by the four founding partners, The Danish Growth Fund (Vækstfonden), who invested in the company in 2017, and 40 private investors who put money into the company in June 2020.

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What does it mean to have The Danish Growth Fund (Vækstfonden) as a co-investor?

It has been crucial to have had The Danish Growth Fund on board since December 2017. Aside from financial support, it has contributed to the development of the company through its know-how and strong network - not least when it comes to growing as a SaaS business. The Danish Growth Fund is a vital factor in us coming as far as we have today.

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Why is there a large difference between the IFRS revenue and ARR?

ARR is the yearly subscription which customers commit to upon signing the contract. Typically it takes four months from the signed contract to an up-and-running solution. For accounting purposes, MapsPeople uses IFRS (International Financial Recognition Standard), and can only include the months that the solution is in use in the annual accounts. For instance, this means that if a contract is signed by July 1 and the solution is up and running by November 1, there will only be two months left of the year that we can include in the accounts according to IFRS. When it comes to ARR, the solution is included as a full subscription year but will during the first only show in the accounts with a value equivalent to two out of twelve months. In relation to cash flow, it is however different as 50% of the first year’s subscription will be billed upon signing the contract on July 1 while the remaining 50% will be billed upon delivery on November 1. Following years are typically billed 12 months in advance to the start of a full year licensing period.

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What are MapsPeople’s core values?

Mapspeople has three core values:

Diversity
Together, we represent 16 nationalities. We believe that a combination of different backgrounds, gender, and skill sets give us the best conditions to create an inspiring and good work environment.

Expertise
Combined, we have more than 100 years of mapping experience. We take pride in having a disruptive approach and strive to be among the best when it comes to everything related to maps.

Dedication
We are willing to go the extra mile to succeed together with our customers. Our internal skill set combined with the enormous competences in our partner network enables us to deliver high quality solutions.

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How do you attract the right candidates?

MapsPeople has established strong connections with especially Aalborg University and University College North Jutland which produce many skilled technical and commercial candidates. The two institutions are crucial to our location in Aalborg. Besides this, there is an active IT-ecosystem in the region, in which MapsPeople throughout the years has been very active, and where we have succeeded in establishing a strong brand. This has resulted in the company achieving a high level of awareness, which we now see reflecting on the recruitment processes.

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What is the strategy on lead generation?

MapsPeople has built a fully automated marketing funnel and has systematically worked with optimizing the lead generation toward a high degree of predictable conversion rates from inbound and outbound marketing campaigns. In 2021, MapsPeople aims at doubling SoMe followers, 15% growth in website visitors with an uplift in the conversion rate for MQL (marketing qualified lead) to 20% (compared to a benchmark of 13%).

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Where are you present globally and what are the ambitions for the future?

We are approximately 70 employees divided into three locations: nine employees in Austin, Texas, 12 in Copenhagen, and around 53 employees in the Headquarters in Aalborg. The EMEA and APAC markets are managed from the Danish offices whilst the US region is managed from the office in Texas, where we have been present since 2018. We already have customers in Australia, Singapore, and Tokyo, but until we, according to our plans, establish an office in Asia around 2022, our partners manage the development in the APAC region.

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Why should investors put money into MapsPeople?

MapsPeople has through the past year already succeeded in important steps on the growth journey. The company has achieved a stable growth throughout several years and has already claimed a strong position in a rapidly growing market.

MapsPeople is a serious and ambitious company built on many years’ competencies within a delimited niche around mapping and navigation in which we have both ambitions and potential to become a market leader.

With the establishment in the US three years ago, the company has already secured a stable foundation on the American market where a number of central reference customers now use MapsIndoors. We have built a strong team with broad competencies that support all necessary aspects in developing a successful SaaS business.

There has been an impressive interest in the pre-subscription. The existing owners have decided to invest further, The Danish Growth Fund is adding more capital, and BankInvest is forming the cornerstone.

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MapsIndoors

Why is Google not the biggest competitor within indoor mapping?

Google is a supplier of technology which makes its Maps APIs available for clients but does not want to do something specific for the individual customers. On maps.google.com you will be able to find indoor maps in airports and shopping malls and while these are also available through Google’s APIs, the individual airport or shopping mall cannot choose what is shown on the map. They cannot control how information is shown and how it is updated and this is something that airports and other large customers want to be able to manage when using it in their own apps and websites. Google Maps is therefore helping to increase the interest for MapsIndoors.

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How price sensitive are your customers?

We do not find our customers to be particularly price sensitive. When we communicate with big actors, prices are rarely a competition parameter. We of course cannot demand unreasonable prices for our solutions, but the price range we have established now is rarely challenged. MapsIndoors can create value for the customers in the form of increased revenue, greater employee satisfaction, or reduced costs. We have unique selling points in the form of the platform’s ability to integrate with the customer’s existing systems and IoT-sensors and this has multiple times been the determining factor for winning large clients.

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Why focus on the American market instead of Asia?

The Western European market has been assessed to be one third of the worldwide market and the same goes for the North American market while the rest of the world combined constitutes the remaining third. It is our clear belief that a global leadership presupposes claiming the American market and thus we focus our efforts in the US. Subsequently, we will invest in the Asian market to retain and expand our position.

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Competitors - what makes you stand out?

MapsIndoors is a flexible platform which makes it suitable to integrate into our customers’ and partners’ solutions and this is also one of the main areas where we differ from other solutions on the market. We have won some of the largest clients within corporate offices against where the ability to integrate our solution into existing apps, web, and kiosks have been the determining factor.

Another crucial factor that makes MapsIndoors unique is its ability to integrate dynamic data from IoT sensors that, for instance, measures whether a desk is occupied or not, how many people are present in a meeting room, how long the line is at the cafeteria, and so on. With MapsIndoors it is possible to easily integrate the dynamic integrations and also here does the platform stand out from other solutions on the market.

Finally MapsIndoors offers seamless transitions from outdoor navigation to indoor navigation which is likewise unique for the market.

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Will AI be implemented in the future?

We are already implementing aspects of it and we are working intensively with the implementation of artificial intelligence in relation to the production of our floor plans. We are already now using deep learning to identify doors and walls and within the coming months the methods will be expanded to likewise identify stairs, elevators, furniture, and other objects in the rooms. Over time we will gain a very high degree of automation when it comes to translating complex CAD data into more simple floor plans that we use for our maps.

Today, we already use artificial intelligence and mathematical models to automate the generation of what we call a route network graph. This is the digital network that is used to determine the shortest route within the building.

In the longer run, we will be using artificial intelligence on a greater scale to optimize replies to inquiries with inputs from various sources as well as draw on historical data from a large amount of similar situations. Today, we process each inquiry one at a time, but with the use of AI, MapsIndoors will be able to give the user better responses and enable them to make more informed decisions.

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How has COVID-19 affected MapsPeople?

COVID-19 has had a positive effect on some of our customer segments and a negative effect on others while some have not at all been affected. All conferences have been cancelled throughout the pandemic, but we are starting to see the demand returning and that multiple large conference venues are starting to prepare for post-COVID times. Another industry, airports, has also been quiet due to the pandemic, but during the pandemic we have managed to make a deal with a large French airport.

Within the corporate office industry, the situation has actually had a positive effect as an increased amount of employees working from home has increased the interest for space optimization in the office. We are seeing a growing interest to implement “smart offices” with flexible workspaces and this increases the demand for the tools that MapsPeople offers within indoor mapping and navigation.

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What is the sales strategy?

Today MapsPeople has both direct sales and partner sales but the focus is to move it to primarily partner sales where more than half of the revenue is coming from today. This is especially from OEM-partners where the business model is based on a close contact with a partner who then includes MapsPeople’s solution as an integrated part of their product. This type of growth takes more time, but already in the middle-stage it will offer us a larger and broader volume.

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How is the competition situation?

We follow approximately 30 competitors. The main ones are located in North America where the market is more mature and technology oriented than in Europe.

All competitors aside from two are smaller companies with less than 50 employees - typically around 20-40. MapsIndoors already has a strong position on the market where we have succeeded in winning large clients against some of the most serious competitors. Our platform strategy in combination with the ability to integrate with the customer’s internal and external systems is a determining parameter

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Will you acquire other companies?

Acquisition is not part of our short term strategy. We assess whether competitors have a customer base or technology which is interesting for us, something we, with all respect, have yet to encounter. We have already been inquired about acquiring a competitor, but neither the technology or customer base was sufficiently attractive to motivate a purchase. However we will not exclude the possibility that acquisitions will become part of our journey towards a global consolidation within indoor mapping.

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Google Maps

What happens if Google changes their partner strategy or pricing models?

Google has multiple times adjusted its strategy and pricing models and we must expect them to continue doing so. In the short run this has resulted in some extra work, but in the long run it has empowered the already strongest partners.

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What will prevent Google from discontinuing your partnership? Why should they not be able to do without you?

Google chose a partner strategy many years ago - not only for Google Maps, but for all its professional products including Google Cloud and Google Workspace. At the same time we can conclude that we more or less see the same partners today as we did 10 years ago. It is naturally essential that a partner is performing and here MapsPeople has always played its part well.

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