Porsche Holding Invests $55M, Takes 10% Ownership in Traffic Provider Inrix

On Friday last week Porsche Automobil Holding SE announced a $55 million investment in traffic provider INRIX valuing the company at $550 million. Porsche Automobil Holding SE is the investment vehicle of the Porsche family that is a majority shareholder in Volkswagen AG.

To date, Inrix has grown through venture funding. It received $68.1 million from investors including August Capital, Venrock, Bain Capital, and Kleiner Perkins Caufield & Byers.

In July 2011 Inrix had raised $37 million from venture capital firms to fund the acquisition of its British competitor ITIS Holdings for $60 million. This transaction added $27 million in annual revenue and 150 people in staff.

Inrix is said to have around 300 employees worldwide. The company provides real-time traffic information for 6.4 million kilometers (4 million miles) of roads across 40 countries.

Inrix licenses this data to automakers like Audi, BMW, Ford, Mercedes, Volkswagen and Toyota and in the public sector, more than 60 transportation agencies worldwide. The company also has customers in the web (MapQuest), mobile (TeleNav, TCS), and consumer electronics (Garmin) segments, as well as in the media industry (BBC).

The company continuously analyzes real-time data from a variety of sources including a crowd-sourced network of more than 175 million vehicles and devices.

Good or bad news?

This investment is both a good and a bad news for INRIX. This is a good news because this investment proves that the model of the company is working, and one of its key customers is willing to invest in it a sizable amount of money.

But this is also somewhat a plan B for Inrix CEO Bryan Mistele which was targeting an IPO as early as 2010. Unfortunately his IPO strategy did not worked out as planned last year.

The company was on the verge to raise $100 million in a public offering that could have valued the company at $1 Billion. But the acquisition of Waze by Google for $1 Billion signaled that a major competitor in traffic data was coming up, offering the information for free, a deal that destroyed Inrix’s storytelling for its IPO.

Competition from TomTom and Here

But the competition to win automaker’s licensing contract today is clearly not against Google, but TomTom and Here. The two map data providers also have a real-time traffic solutions that are doing well with automakers. Audi had been an historical customer to Inrix but it however selected TomTom-AutoNavi technology in China.

In October last year the University of Michigan published a study (sponsored by TomTom) that revealed that TomTom and Google traffic data accuracy were beating Inrix and Here (read more here).

In November TomTom also announced it was replacing INRIX in providing its real-time traffic flow data to Total Traffic + Weather Network (TTWN), a Clear Channel US subsidiary (read here).

TTWN is one of the largest supplier of traffic information in North America, reaching 200 million customers across radio, television, GPS navigation devices (RDS-TMC and HD Radio technologies), online and mobile.

On the other end Here is pushing hard with its connected driver solution that include navigation, maps and traffic.

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