Inrix Lands $37M, Plans to Step on the Gas Expanding Global Traffic Data
[Updated at 2:10 pm] Traffic data provider Inrix, born out of the team that developed Microsoft’s SYNC in-car software system with Ford, plans an aggressive global expansion and a public-market debut “sooner rather than later” after landing a $37 million round of investment led by top Silicon Valley venture capitalists.
That’s the word today from Inrix CEO Bryan Mistele, who was understandably buoyant about the news of his seven-year-old company’s oversubscribed Series D round—the largest we’ve seen this year for a tech company in Washington state, topping the $30 million hauls notched by humor website operator Cheezburger Network and gamified social network startup Lockerz.
Kirkland, WA-based Inrix says it has been profitable for about two years and would have been just fine without the extra cash, saying its annual revenue growth rate over the past three years has been about 85 percent. So why take the money while claiming you don’t need it? Mistele says it allows Inrix to get big faster, and take advantage of some acquisition targets in a sector that increasingly prizes global reach.
“As you look at the market, our customers—folks like Ford and Toyota and companies like MapQuest and mobile application companies—they want traffic data everywhere,” Mistele says. Major competitors include Nokia’s Navteq in the US and Europe, and GPS company TomTom in Europe, Mistele says.
Inrix provides those companies and others with real-time traffic data culled from its “hundreds of public and private sources,” particularly its own network of more than 10 million GPS-connected vehicles and cellular phones. Inrix partners with commercial fleets such as taxis and delivery trucks to cull data, and also gets some information from government road-sensor networks.
The data is used by a long list of customers, including state transportation departments, automakers Audi, Ford, and Toyota, and consumer brands like MapQuest and Inrix’s own consumer smartphone apps. Overall, Inrix says its information is used by 150 companies and more than 100 million people worldwide, in more than 20 countries in Europe and North America.
Inrix’s Microsoft legacy doesn’t stop with Mistele and co-founder Craig Chapman, who is still a board member. The company also uses technology developed at Microsoft Research, although Mistele says the licensing deal is set to expire next year when Inrix hits the cap on royalties it has to pay for licensing the technology. Microsoft also doesn’t have an ownership position in the company, Mistele says.
The $37 million Series D round was led by Kleiner, Perkins, Caufield, & Byers and August Capital. TechCrunch reports that Inrix’s valuation after this round of financing was pegged at just under $500 million. While he wouldn’t talk specific revenue or profit numbers, Mistele quipped that “I can say we’re doing better than Zillow did when they filed to go public,” a semi-cheeky metric that I’ve actually heard a few times since the unprofitable online real estate company hit the public markets with only about $30 million in revenue.
And speaking of IPOs: Earlier this year, Mistele told TechFlash that Inrix was looking toward an initial public offering sometime in the next two years, but today he says that could come quicker—a welcome sign for the Seattle-area technology scene, which hadn’t seen a true homegrown IPO in a long time until Zillow (NASDAQ: Z) went public last week.
“It’s our aspiration to go public sooner rather than later, and we believe this speeds up that process,” Mistele says.
That’s quite a turnaround for a company that, when it was founded in 2004, had a rough time raising money.
“I think 2004 was a great time to start a business. It was a horrible time to raise money. In fact, we went to 70 venture capital firms and were told no 70 times,” Mistele says. “But getting the business started then allowed us to get to critical mass, allowed us to get to cash-flow positive before 2008 and 2009, survive the downturn and come out of it much, much stronger.”
Mistele says the company has about 100 people and expects to more than double in the next year. Revenue growth, he said, might not stay at the 85 percent rate seen recently with the amount of growth Inrix is predicting, but should stay above 50 percent.