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Maptuit steers through 3rd round
by Tyson Freeman
Navigation technology vendor Maptuit Inc., which appears to be finding its way after hiring a high-profile CEO and changing its course, has completed an $8 million third round of funding. The company raised $2 million from Flagship Ventures of Cambridge, Mass., to cap the Series C financing, which was led by Edison Venture Fund of Lawrenceville, N.J. Draper Fisher Jurvetson of Redwood City, Calif., also participated in the round. Choate, Hall & Stewart of Boston represented Flagship Ventures on the deal. Maptuit tapped Hale and Dorr LLP of Boston as its legal counsel.
David Flaschen, managing director of Flagship Ventures, said he had been searching for a deal in the information and data service sector for more than a year but found mostly consumer-focused products that were being adopted slowly, if at all.
Burlington, Mass.-based Maptuit, which formerly sold its mapping technology for consumer use, now offers a service called FleetNav, which provides on-demand truck-to-door directions to fleet operators of heavy trucks. "Maptuit," Flaschen said, "has all the things I like in an information service deal - proprietary data, unique analytics targeted toward a well-defined market and traction, in this case in the long-haul trucking market. Plus, it was a great opportunity to partner with Jeff Papows."
Papows, before he took the CEO post at Maptuit, was president and CEO of Lotus Development Corp., a billion-dollar, Cambridge-based subsidiary of International Business Machines Corp. of Armonk, N.Y. Papows, who announced his departure from Lotus in January 2000 and joined the Maptuit board in April 2000, said he had been intrigued by Maptuit's technology but realized its focus on the consumer was off track. "My initial gut check was that they had interesting technology and very smart engineers but that it would be tough to monetize the technology in a consumer-facing way," he said.
Papows guided Lotus through its successful integration with IBM, and Flaschen said his decision to switch the focus of Maptuit was dead on, but Papows himself admits that running a billion-dollar software business did little to prepare him for the subtleties of raising venture capital financing. "I have to admit that I did everything wrong for a while," he said. "Because of my visibility in the industry, [Maptuit] didn't have to go out and do road shows. So we ended up with a lot of angel investors ... It was all very expedient, but in retrospect, it was probably pretty dumb, since we now have a more convoluted balance sheet than we needed to have."
Papows said Maptuit had raised about $22 million to arrive where it is today.
The company, then Maptuit.com Inc. of Toronto, raised its first round in September 2000 from Descartes Systems Group Inc. and itemus inc. In July 2001, it drew an additional $300,000 from BCE Capital and Bell Mobility Inc. But funds from both of those rounds were sunk on the company's consumer focus.
Papows would not provide details but said more recent financing was provided by angels, Maptuit management and himself. With financing needs off the table, Papow said he is looking forward to taking advantage of what he believes is a solid opportunity. FleetNav, which pushes off of digital maps of more than 47 million road intersections in the U.S., not only helps trucks find the quickest route, but it can also alert drivers to low bridges, difficult turns and roads designated for truck use, creating safety benefits.
Papows says that both the 2.8 million long-haul trucks that carry goods and services across North America and fleet owners are always looking for ways to operate more efficiently. He said the service costs about $10 per month and that customers normally see that investment returned within days. On average, he said, every nonrevenue-producing mile when a truck is off course costs about $1.16 in hard costs such as fuel and maintenance. "If you can eliminate or reduce that loss, the payoff is quick," Papows said. "For our first 30,000 customers, the cost is recovered in the first three days of the month. It's an economic no-brainer." He added that Stevens Transport of Dallas, one of Maptuit's larger customers, reduced the number of turning-related accidents by 46%, in part because truckers knew more "truck friendly" routes.
So far, FleetNav has been licensed to dozens of big-rig fleets that include nearly 40,000 trucks. Perhaps more important to investors looking forward, Maptuit has signed deals with several large strategic resellers, including San Diego-based Qualcomm Inc. and Canadian Satellite Communications, known as Cancom, of Mississauga, Ontario. Cancom is a unit of Canada's Shaw Communications Inc. Qualcomm is the market leader for the satellite-based GPS hardware that FleetNav runs on.
Both Flaschen and Papows were attracted to the steady stream of revenue offered by Maptuit's pay-monthly business model. "I had one too many Maalox moments when I was trying to hunt down elephants - the last million in sales, in the last three days of the quarter - at Lotus."
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