Aerial mapper Nearmap acquires US roof geometry tech for $5m
12 December 2019, Written by Matt Ogg
Australian aerial mapping company Nearmap (ASX: NEA) is upping the ante on its location intelligence offering with the purchase of technology and IP from US-based Pushpin for US$3.5 million (AUD$5 million).
The move comes as the technology company seeks to cement its position following record portfolio growth in FY19 to reach $92 million in contract value, with strong gains in the US market.
NEA shares may have fallen 39 per cent since their highs of $4.29 in June, but at $2.60 they are still up two-thirds over the past 12 months with a market capitalisation of $1.17 billion.
Nearmap's business model is based on selling subscriptions for its high-resolution aerial imagery, and with the latest technology acquisition it will now be able to provide a semi-automated calculation and extracted representation of any roof geometry within an hour.
"By acquiring Pushpin's 3D geometry extraction technology and pairing it with our rich data, we bring the best of both worlds together at unprecedented scale," says Nearmap chief executive officer Rob Newman.
"Over the past couple of years, we've evolved our offering into a multi-product portfolio, and this acquisition is an important milestone in our approach to continue adding new content types for our customers."
The company highlights this new capability will allow businesses to fast-track quoting and fulfilling roofing projects, determine solar irradiance, plan drone delivery routes and model 5G propagation.
The group claims the acquisition is consistent with its commitment to accelerating growth opportunities through targeted and selective acquisitions, supported by the $70 million equity raising it ran in September 2018.
The group expects the acquisition will also allow it to further monetise the next generation of its HyperCamera2 content, and more deeply penetrate roofing and solar industry verticals.
"The addition of geometry extraction technology into our large-scale 3D reality models will enable us to further evolve our offering and produce at scale roofing geometry," says Nearmap's executive vice president for technology and engineering, Dr Tom Celinski.
"With the added ability to provide roof geometry data, we will be able to provide even deeper insights into what's happening in urban environments and help businesses and government organisations profoundly change the way they work."
Founded 12 years ago in the western suburbs of Perth, Nearmap has since moved its head office to Sydney and has captured imagery from more than 6.5 million square kilometres.
"Nearmap is firmly established as a global leader in aerial imagery and location intelligence technology, as well as a great Australian technology success story of which every shareholder can be proud," Newman said in the company's annual report.
"The North American market remains the Company's biggest opportunity. It is a highly fragmented market with a number of smaller players who have not developed a scalable footprint.
"Nearmap, after only five years, is already well established as one of the leading pure-play aerial imagery companies in the United States. With market penetration of 1-2 per cent, the opportunity for our business is significant.
A new player on the listed scene
Appetite for the sector is clearly high amongst investors,after another Australian aerial mapping company Aerometrex (ASX:AMX) listed this week and has already more than doubled its share price on the IPO offer price.
Now with a market capitalisation of $186.9 million, South Australia-based Aerometrex raised $25 million to help grow the business domestically and abroad.
A major player in Australia's aerial mapping sector, Aerometrex has for 30 years been one of the leading professional aerial mapping and spatial technology businesses in Australia.
With limited capital resources, the Company has self-funded its annual revenue growth from $9.7 million to $16.1 million over the past two years with strong industry and government support for its aerial photography, photogrammetry, laser-based light detecting and ranging (LiDAR), as well as high resolution, high-accuracy 3D modelling.
The Company is also a renowned innovator, having secured international opportunities through its 3D mapping service in France, Germany, New York, Philadelphia and New Zealand.
These contracts originated mostly through in-bound enquiry as customers recognised the quality of Aerometrex's market-leading products.
"The very high pre-listing market interest in our IPO reflects a strong reputation, focused R&D and a proven record of building revenue, net profit, market share, customer base and operating footprint," says Aerometrex managing director Mark Deuter, who has a 12.1 per cent stake in the company.
"The proceeds of the IPO will be applied to growing our domestic and global aspirations and particularly our subscription service which is emerging as a core focus of the business and is a growing revenue stream.
"Aerometrex has always been at the forefront of spatial technology advances, and we have sought to take this competitive advantage to new markets outside of Australia, particularly for our 3D product which we believe is the next generation in mapping's evolution."
"We expect our LiDAR survey work to grow substantially. Government, industry and community sectors are increasingly recognising its application across such issues as bushfire prediction and analysis, climate change management, coastal erosion, utilities, infrastructure development and many other fieldsNever miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg