SimpleGeo To Be Acquired By Urban Airship(uncrunched.com)
uncrunched.com
SimpleGeo To Be Acquired By Urban Airship
http://uncrunched.com/2011/10/31/simplegeo-to-be-acquired-by-urban-airship/
9 comments
The amount of hype these guys had measured against the ultimate outcome just underscores that it is really, really hard to build a real business... and much easier to get press. Kudos to them for trying. This is a downer.
Blogpost (now pulled from Urban Airship blog):
Today I’m excited to the acquisition of SimpleGeo. You can read Jay Adelson’s post here. [Dead link]
Both Urban Airship and SimpleGeo started two and a half years ago and I’ll never forget when Crash Corp Inc. (the original SimpleGeo) launched as we both went live with our new sites on the same day with the same font; Museo. We’ve known each other over that entire time and shared lots of discussions and even did a partnership deal in the last couple of months. As we continued to talk and engage we realized that putting our two companies together would make for a really interesting offering for our combined customers.
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. Urban Airship will fold in the SimpleGeo product suite to offer a complete set of solutions for our ever growing customer base. Urban Airship is now the leading platform for mobile cloud services in the market. This is a fantastic win for both Urban Airship and SimpleGeo customers and investors.
Obviously there are many things that we need to work out while we make this transition and we’ll be working closely with existing customers from both companies to make sure they are up to speed on our future plans for the combined roadmap.
We’re excited to be continuing to build the business, excited that the SG team is joining Urban Airship, excited about having an office in San Francisco and most of all excited about the next phase of PaaS that we’re going to dominate in years to come.
You can still read it through Google Reader: http://cl.ly/3j0T36272H2r3J0r1N0Q
Original URL: http://urbanairship.com/blog/2011/10/31/urban-airship-acquir...
Today I’m excited to the acquisition of SimpleGeo. You can read Jay Adelson’s post here. [Dead link]
Both Urban Airship and SimpleGeo started two and a half years ago and I’ll never forget when Crash Corp Inc. (the original SimpleGeo) launched as we both went live with our new sites on the same day with the same font; Museo. We’ve known each other over that entire time and shared lots of discussions and even did a partnership deal in the last couple of months. As we continued to talk and engage we realized that putting our two companies together would make for a really interesting offering for our combined customers.
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. Urban Airship will fold in the SimpleGeo product suite to offer a complete set of solutions for our ever growing customer base. Urban Airship is now the leading platform for mobile cloud services in the market. This is a fantastic win for both Urban Airship and SimpleGeo customers and investors.
Obviously there are many things that we need to work out while we make this transition and we’ll be working closely with existing customers from both companies to make sure they are up to speed on our future plans for the combined roadmap.
We’re excited to be continuing to build the business, excited that the SG team is joining Urban Airship, excited about having an office in San Francisco and most of all excited about the next phase of PaaS that we’re going to dominate in years to come.
You can still read it through Google Reader: http://cl.ly/3j0T36272H2r3J0r1N0Q
Original URL: http://urbanairship.com/blog/2011/10/31/urban-airship-acquir...
Since SimpleGeo has raised nearly $10 million in venture capital, it’s likely that all or nearly all of the acquisition price would go to the last round investors due to their liquidity preference.
Very unlikely, the team probably got a chunk.
Remember that the acquiring company is shelling out several million and they really don't give a rat's behind about the liquidity preference. They want the new team to be motivated.
It is standard for the VCs to waive the preference during the negotiations (after much wheedling and whining). If they don't, the deal doesn't go down.
Very unlikely, the team probably got a chunk.
Remember that the acquiring company is shelling out several million and they really don't give a rat's behind about the liquidity preference. They want the new team to be motivated.
It is standard for the VCs to waive the preference during the negotiations (after much wheedling and whining). If they don't, the deal doesn't go down.
Very unlikely, the team probably got a chunk.
The Series A was $8.14M and they were acquired for $3.5M. If the team tried to get a chunk of that then I doubt they'll be getting funding again.
Remember that the acquiring company is shelling out several million and they really don't give a rat's behind about the liquidity preference.
It's not as simple as that. Both SimpleGeo and UrbanAirship are Foundry Group companies[1][2].
This was clearly a firesale, and Joe Stump appears to care for his team somewhat: Cofounder Joe Stump used to be Digg’s chief architect. According to TechCrunch, three of the new hires were laid off by Digg in March and the fourth one decided to leave. Now, SimpleGeo is bringing in the new guns but also familiar people, which seems to really solidify the team that stands now at 17 employees.[1]
It might be as simple as making sure everyone got a new job, and maybe the non-Foundry Group investors got some money back.
[1] http://venturebeat.com/2010/05/18/simplegeo-second-funding/
[2] http://www.prweb.com/releases/UrbanAirshipFunding/SeriesB201...
The Series A was $8.14M and they were acquired for $3.5M. If the team tried to get a chunk of that then I doubt they'll be getting funding again.
Remember that the acquiring company is shelling out several million and they really don't give a rat's behind about the liquidity preference.
It's not as simple as that. Both SimpleGeo and UrbanAirship are Foundry Group companies[1][2].
This was clearly a firesale, and Joe Stump appears to care for his team somewhat: Cofounder Joe Stump used to be Digg’s chief architect. According to TechCrunch, three of the new hires were laid off by Digg in March and the fourth one decided to leave. Now, SimpleGeo is bringing in the new guns but also familiar people, which seems to really solidify the team that stands now at 17 employees.[1]
It might be as simple as making sure everyone got a new job, and maybe the non-Foundry Group investors got some money back.
[1] http://venturebeat.com/2010/05/18/simplegeo-second-funding/
[2] http://www.prweb.com/releases/UrbanAirshipFunding/SeriesB201...
> If the team tried to get a chunk of that then I doubt they'll be getting funding again.
Again, it is in the interest of the acquiring company to have the liquidity prefs waived. They want the money to go to the team and have no interest in enriching the VCs.
One exception: Sometimes there is a conflict of interest, where the acquirer has someone in a key position who is also a limited in the VC fund. This is often the reason for some really dumb prices being paid in various deals.
Again, it is in the interest of the acquiring company to have the liquidity prefs waived. They want the money to go to the team and have no interest in enriching the VCs.
One exception: Sometimes there is a conflict of interest, where the acquirer has someone in a key position who is also a limited in the VC fund. This is often the reason for some really dumb prices being paid in various deals.
You are assuming that the consideration was cash. I wouldn't be surprised if consideration was equity.
> You are assuming that the consideration was cash.
No, I was not. The acquiring company causes the liquidity pref to vanish regardless of the currency, if they're sensible.
No, I was not. The acquiring company causes the liquidity pref to vanish regardless of the currency, if they're sensible.
The acquiring company causes the liquidity pref to vanish regardless of the currency, if they're sensible.
huh? and how exactly would they do that in a legal way?
huh? and how exactly would they do that in a legal way?
> huh? and how exactly would they do that in a legal way?
Simple: The acquiring company turns to the VCs and says "If you want the acquisition to happen, you are going to waive your liquidity pref".
It's not complicated. And as for "legal", contracts are renegotiated all the time. You might in fact argue that the liquidity pref is put in as a throwaway, since it is rare that they are ever exercised.
Simple: The acquiring company turns to the VCs and says "If you want the acquisition to happen, you are going to waive your liquidity pref".
It's not complicated. And as for "legal", contracts are renegotiated all the time. You might in fact argue that the liquidity pref is put in as a throwaway, since it is rare that they are ever exercised.
They say it's part of the deal, if the VC says no then there is no deal and company is free to shop around for someone willing to buy the company with the preference in place.
If they are just after the team, they could just offer signing bonuses directly to the team. Such as when Borland didn't want to sell to Microsoft.
If they are just after the team, they could just offer signing bonuses directly to the team. Such as when Borland didn't want to sell to Microsoft.
well then we wouldn't be talking about acquisition but a team change, would we?
The VC's BATNA to the acquisition is owning a shell of a company, investing more money, etc. After UA takes the founders and employees SG has no founders and no employees. It's pretty much worthless.
The team's BATNA to the acquisition is a signing bonus, or another job.
The founder's BATNA to the acquisition is a signing bonus, or another job.
The acquirer's BATNA to the acquisition is a giving signing bonuses, or hiring the team.
Everyone's BATNA is signing bonuses so if the VC screws around on the preference they get nothing. That's why were not talking about a team change because the best situation for everyone is for the VC to give up the preference.
You get deals done by presenting an option that is superior to the BATNA. (Assuming everyone is rational)
See KART / Indy for what happens when people are prepared to accept the BATNA in the face of a superior offer.
The team's BATNA to the acquisition is a signing bonus, or another job.
The founder's BATNA to the acquisition is a signing bonus, or another job.
The acquirer's BATNA to the acquisition is a giving signing bonuses, or hiring the team.
Everyone's BATNA is signing bonuses so if the VC screws around on the preference they get nothing. That's why were not talking about a team change because the best situation for everyone is for the VC to give up the preference.
You get deals done by presenting an option that is superior to the BATNA. (Assuming everyone is rational)
See KART / Indy for what happens when people are prepared to accept the BATNA in the face of a superior offer.
[deleted]
While there are problems with SimpleGeo (neighborhood misspellings in San Fran, GeoIP that isn't very complete, polygons that represent political boundaries and not geo boundaries, etc) it is a useful and affordable service that we use all the time. I kind of hoped it would go to Google who would use it to improve their APIs.
I hope it lives on with Urban Airship and keeps getting resources to improve. In the end it's a good thing that someone is competing with Google in this space.
I hope it lives on with Urban Airship and keeps getting resources to improve. In the end it's a good thing that someone is competing with Google in this space.
This is probably true. And, this is a better outcome than most companies ever see.
There are a great group of people at SimpleGeo, and while I never understood how it would be a big business, I was always confident that if a big opportunity existed, they would find it. What this says to me is that the big opportunity in being the data layer for location does not exist as a stand-alone entity.
There are a great group of people at SimpleGeo, and while I never understood how it would be a big business, I was always confident that if a big opportunity existed, they would find it. What this says to me is that the big opportunity in being the data layer for location does not exist as a stand-alone entity.
Their Series A was 8.14M, which is a HUGE, series A. If they are getting acquired for $3.5M, assuming they have a little in the bank, this is not a good exit.
I am sure the founders are seeing very little of this money. The liquidation preferences "prefer" the investors.
I am sure the founders are seeing very little of this money. The liquidation preferences "prefer" the investors.
I was being diplomatic.
I think this is the biggest factor at play. The field of companies that would consume geo-location didn't grow as fast as people thought.
For a period when simplegeo was funded it seemed like everyone was butting their head against this data layer problem... but the big guys eventually figured it out internally and the small guys moved on to groupon clones and suddenly there wasn't a huge market.
For a period when simplegeo was funded it seemed like everyone was butting their head against this data layer problem... but the big guys eventually figured it out internally and the small guys moved on to groupon clones and suddenly there wasn't a huge market.
Did SimpleGeo ever go after the big players?
It means making a service not for consumers but for other services is a bad business nowadays?
The description makes it sound like SimpleGeo is in trouble, e.g. once promising, soft landing. Is there something more to this?
Seeing how they raised nearly $10M in venture capital and sold for under $4M, it's safe to guess they sold because they were running out of money. The alternative was going out of business - that's a pretty hard landing.
I'm a geolocation fan and developer from a long time, so always watched and tested Simplegeo. But it seems they never got too much traction because their platform is very specific, even for geolocation systems (someone correct me if I'm wrong, please).
Yes, they have a pretty big apps showcase, but it's not enough sometimes.
Anyway, if they get acquired by Urban Airship, it will be great. UA will have a better use for their platform (and UA will need geolocation soon), and I'm happy Simplegeo will have a good use (what they built is really awesome, if you understand geolocation).
Yes, they have a pretty big apps showcase, but it's not enough sometimes.
Anyway, if they get acquired by Urban Airship, it will be great. UA will have a better use for their platform (and UA will need geolocation soon), and I'm happy Simplegeo will have a good use (what they built is really awesome, if you understand geolocation).
Kind of off topic, but can you recommend some services similar to simplegeo?
Disclosure: I work at Factual.
Factual provides an API for businesses in the US and around the world. In fact, SimpleGeo partnered with us for some of their data. Other alternatives you can consider are FourSquare, Google Places, etc. Each alternative has it's own pricing structure and terms and conditions.
You can browse some of our POI data by going to http://www.factual.com/topic/places
Factual provides an API for businesses in the US and around the world. In fact, SimpleGeo partnered with us for some of their data. Other alternatives you can consider are FourSquare, Google Places, etc. Each alternative has it's own pricing structure and terms and conditions.
You can browse some of our POI data by going to http://www.factual.com/topic/places
Foursquare is good for a simple and fast list of places, but the data inside that is incomplete sometimes.
This Factual is new to me and seems good, I will see it better later (big list of places for Brazil, exactly what I need sometimes).
This Factual is new to me and seems good, I will see it better later (big list of places for Brazil, exactly what I need sometimes).
Couchbase now includes the GeoCouch R-tree indexer by default: http://blog.couchbase.com/new-release-geocouch-extension
This is the same indexer that is powering open gov't projects around the world: http://maxogden.com/#blog/diy-open-data-catalog
This is the same indexer that is powering open gov't projects around the world: http://maxogden.com/#blog/diy-open-data-catalog
I was just looking into the geolocation issue myself recently. Looked at simplegeo but decided against it. The question really is what is your app going to do. The difficulty really with geolocation these days isnt the lack of data points rather its figuring out the needs of your application and whether or not these services will fit into that. In reality even with these services location based apps are still a pain to develop.
Urban Mapping - http://www.urbanmapping.com/ - for data [ http://developer.urbanmapping.com/content/Data-Catalog ] and custom map rendering [ http://www.urbanmapping.com/product/mapfluence ].
Disclaimer: I am the founder of Bimaple.com.
Bimaple provides powerful location-based search services. Check omniplaces.com for a demonstration site that supports instant, error-tolerant search on more than 17 million business listings. Customers can build a search application easily using our product.
Bimaple provides powerful location-based search services. Check omniplaces.com for a demonstration site that supports instant, error-tolerant search on more than 17 million business listings. Customers can build a search application easily using our product.
If you mean tech as opposed to their data offerings, you should take a look at CartoDB http://www.cartodb.com. All the power of PostGIS with a lot of the pain points rounded off.
I don't know any other service like Simplegeo.
MongoDB has some pretty good geo-aware methods worth looking.
MongoDB has some pretty good geo-aware methods worth looking.
Maybe the issue is barely anyone uses it? I'm guessing Foundry Group organized the acquisition between companies so SimpleGeo wouldn't totally fail and were unwilling to do another round.
I think they spent too much time rebuilding the wheel(there own gis engine) and not enough on what services could make money. They could have easily used MongoDB or PostGIS as there engine and built there services on that.
Compared to PostGIS SimpleGeo is seriously lacking. You can only do the simplest of queries, and it has tiny limits on most accounts.
The problem is that spatial data tends to create strange usage patterns compared to other software. I run PostGIS installs with tens of millions of features, most of which will never even be queried. Different spatial queries can result in dramatically different resource needs. I need a service that is affordable to store multi GB datasets, and can query them very quickly. SimpleGeo have not come close to solving this.
The problem is that spatial data tends to create strange usage patterns compared to other software. I run PostGIS installs with tens of millions of features, most of which will never even be queried. Different spatial queries can result in dramatically different resource needs. I need a service that is affordable to store multi GB datasets, and can query them very quickly. SimpleGeo have not come close to solving this.
Do checkout http://spacialdb.com http://devcenter.spacialdb.com
Its got PostGIS + REST API (GeoJson) Ping me for a private beta account if interested
I'm starting writing an essay for my Software Engineer graduate course and it will be about architecture and design patterns for geolocation systems.
I checked SpacialDB page and it seems to be really good and useful for my essay, I want to use it to describe one of the three cases. Can you send me a beta invite, please? I registered there with this email: ricardo [at] fences [dot] com [dot] br
I'm working on a business startup project and this essay will be part of it, so I would like be a new customer when project start.
[edit] (ps.: I'm from Brazil. Feel free to contact me with that email.)
I checked SpacialDB page and it seems to be really good and useful for my essay, I want to use it to describe one of the three cases. Can you send me a beta invite, please? I registered there with this email: ricardo [at] fences [dot] com [dot] br
I'm working on a business startup project and this essay will be part of it, so I would like be a new customer when project start.
[edit] (ps.: I'm from Brazil. Feel free to contact me with that email.)
@rabc sent - go crazy!
Postgis is far from perfect and in actuality is more geared towards geographical survey types of applications then location based. They used cassandra at least for some of their architecture which personally i think was the right way to go. The problem is that theres really not enough demand for these types of applications yet plus they really didnt offer a strong enough platform.
Jay Adelson is very good at not exiting well.
He helped take his company, Equinix, public.
Actually I believe they hired a CEO to do that.
It's been bumpy, even with relying on them scantly–I had hoped the feature set would grow and mature to take even more work off of my hands. Instead–several times the API changed from under me without warning or backwards compatibility and my alpha app simply broke. Once, embarrassingly in an investor presentation, another time it took a personal tweet to the founders to get things re-sorted out.
I'm sad that for so much money, such a great team, excellent visual design, hot shot investors etc. they didn't take off. I wonder if they just didn't hit on the right business model–for me it seemed I am something of a YCombinator gamble for them: they want my startup Kliq to be reliant on their services such that I can't or don't want to rebuild at scale (wasn't the case), price such that they take money from me Kliq now, as small developer team with little time to build cookie features not core to my app (they didn't charge us a monthly fee until the very very end, while we probably would have paid $5-$20 a month right away and up to $50 with more features), and price such that they "exit" with Kliq if we do end up scaling. Then they just need some success stories and they would have been too. Some ideas as a now former "customer".