Imagine if department stores in busy urban shopping districts could lock-in customers travelling into the area, before they even arrived. Kimgisa, a navigation app developed by Korean startup locNall aims to be the No. 1 player in the navigation and location-based marketing industry in Asia and make that marketing dream a reality. The team has already started working with large clients like Incheon International Airport to deliver targeted marketing to airport visitors and is now planning stage two, Japan market entry.
What is Kimgisa?
Kimgisa is a location-based app for iOS and Android that acts as a sort of touch-screen sat-nav device. Since its launch back in 2010, it has acquired more than 5 million users despite the fact that major Korean mobile carriers have similar apps installed by default on their smartphones.
The company projects that its primary revenue source to come from big data, an accumulation of user information including their destinations. They are also planning to sell advertising opportunities to Korean companies like Poing (restaurant booking), GooDoc (hospital finder),Saltlux (big data solution) and Korean web portal Naver.
The company was founded back in May of 2010 by three Busan natives: Jonghwan Park, Wontae Kim, and Myeongjin Sin, and all of whom previously conducted studies on location-based services at KTIT, the R&D body of Korea Telecom. The company has also hired many engineers from KOSDAQ-listed mobile solution provider Point-i.
Big Opportunities on the Horizon
Navigation apps and big data acquisition through social geo-sharing is a hot topic in the aftermath of Waze's $1.1Bn acquisition by global search and map giant Google. Now Korea's premium navigation app, based on very similar social sharing principals plans expansion to Japan, prior to a drive to become the navigation app of choice across Asia.
While the navigation industry is now well over ten years old and has clear market leaders the team at locNall, who built Kimgisa, believe that the industry is only now beginning to realize its true value, in terms of harvesting real time user generated data that can fuel new business models, such as location-based marketing.
"The tracking data that is collected from users is of the most interest, as this can be used for targeted advertising," explained locNall's CEO, Mr. Park. He went on to explain that others do exist in the industry already in Korea, but their service has risen to the top on account of the much greater user-base, and therefore the vastly larger data-sets that they are able to compile. "Take SKT for example. They have their navigation app installed in 300 taxis in greater Seoul. But our app is actively used by over 1 million subscribers," Park said.
Effecting Growth Under Fierce Financial Constraints
Navigation services take a huge amount of money to establish and run, up to $1M year just in servers and other hardware. In addition the algorithms that need to be developed to record accurate locational information are extremely complex and takes a long time to develop, test, and role out. Big data is essential to the new marketing layers the company intends to implement on top of their technology and these also take large financial and human resources to realize.
"For us, the financial issue was very critical. To get around this we had to work as system integration consultants just in order to survive." explained Park. "To be more streamlined, we also developed our own technology, from scratch, rather than buying solutions from third parties. In this way we were also able to save a huge amount of money."
Visions of a Kimgisa Asia
While Kimgisa has emerged as the dominant navigation app in Korea, that is only one small step towards what the company wants to achieve. Beyond that the team want to realize a vision of becoming a robust location-based social platform, validated and powered by real-time big data. Basically they are ticking a large number of 'hot boxes'. Park explained that due to the the exceptionally high barriers to entry into this market Kimgisa has a real opportunity now to develop the core strengths of the company, with Real time data collection as their core capability and differentiator. In the future the team hopes to become the premium social Ad network across Asia.
Asia Expansion Fuelled by Strategic Regional Investment Partner
Loc&All was founded in 2010 and raised seed capital of around $1M from Korean Investment Partners. Most recently the company raised an additional $1M from CyberAgent Ventures (CAV) in a series A funding round. CAV was able to secure the deal in a very competitive funding round. With Corporate and Investment headquarters in Japan and one of the largest domestic advertising networks, CAV will be able to help Kimgisa expand effectively in the Japanese market. Additionally, CAV has offices around the APAC region, further adding value as a local partner when Kimgisa expands to additional markets, such as China, and South east Asia.
Kimgisa is already working with four domestic map providers in Japan and are working out of CAV's incubation office in Tokyo. Full Japanese launch of the service is expected early next year, with a further push into Asia expected in late 2015.