Interview: Apontador ups location game

What started in a cramped little room in the suburbs of Sao Paulo has now become Brazil’s main web-based firm specializing in location-based services – the hottest topic at South by Southwest this year. Founder of Apontador Rafael Siqueira tells IT Decisions about his vision and future plans.

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With the dotcom bubble already burst, the year of 2000 was not a great time to start a web-based firm anywhere in the world, let alone in Brazil. But the founder of Internet geospatial services firm Apontador Rafael Siqueira was up to the challenge.

After a freelance assignment for America Online (AOL), Siqueira realized there were many business possibilities around location-based tools, so he did not hesitate before dropping out of the last year of his mechatronic engineering degree to launch his own venture.

“You see a lot of that in Silicon Valley, people dropping off school to start a business. There, this is considered real entrepreneurship, whereas in Brazil some people appreciate that and others not so much,” he told IT Decisions.

“I was ready to try an internship at a company like Volkswagen in the field of mechatronic engineering or become an entrepreneur.  Then an investor asked me whether I wanted to do the same thing I did for AOL, but have some equity – that was the opportunity to do my own thing,” he said.

Siqueira recalls that when Apontador and a handful of other dotcoms launched in the early noughties – notably price comparison website Buscapé, co-founded by Rodrigo Borges, one of Siqueira’s school friends – Brazilian Internet was “nothing”, the market was dominated by big players and the new web business scene was “very poor”.

As in most successful web businesses, the operating conditions at the start were not great either – the initial team was crammed into a sweltering little office and living space in Jabaquara, south of São Paulo – but that did not discourage Siqueira, then in his early twenties.

“I was young back then and I am not sure if I would do it all over again, but at that moment there was a good opportunity and I had been thinking of developing something on the web around location since 1998,” he said.

Fast-forward a few more years and the firm is getting plenty of attention in Silicon Valley. Apontador was the only South American firm that made it to the yearly list of the 250 most promising companies in the world compiled by US brand networking firm AlwaysOn in 2010, alongside others such as Facebook, LinkedIn and Netvibes.

The company managed to break-even in 2004 and has raised $3.6m in funding since its inception. Today, Siqueira owns a stake of less than 10% in the firm, but feels that his foreseeable future is “very much at Apontador.”

Products for users and businesses

In 2001, Apontador launched as the first Brazilian website offering maps and routes over the web in a period of just two months. According to Siqueira, the company’s idea was to be something along the lines of Yahoo – the biggest search engine at the time  – for local search.

The company approached mobile carriers at the time in an attempt to do business around location-based tools and hit a brick wall. It then decided to license its geospatial technology to other companies.

That same year the company got its first client, classified guide Guia Mais, for which it developed routes and local search on a monthly fee basis. After that, AOL came on board and according to Apontador’s founder, the routes and maps functionality was the third most accessed function on the website at one point (AOL ceased its Brazil operation in 2006).

The development of a product for vehicle tracking specialist Sascar in 2003 was another milestone and around 80 companies in the Brazilian market now use the location-based technology. Other big deals followed for the provision of services to companies including Telstra in Australia and Orange and Vodafone in Europe.

From a user perspective, the company has several services that leverage on location-aware devices such as cell phones with built-in GPS receivers and personal navigation devices. Today, Apontador has a user base of 12 million unique users a month, which use the firm’s offering that includes content search for anything ranging from gas prices to hotels, restaurants and local bargains, as well as map and route services in partnership with MapLink.

Brazil vs US

According to Siqueira, Brazil’s level of maturity when it comes to location-based services is improving fast, despite some perceptions that the country is lagging two years behind the US in terms of the development curve.

“That impression could be due to the fact that until recently, Brazil had one of the most expensive data plans in the world, so adoption wasn’t as strong. But the market is changing very fast: broadband uptake and use of smartphones is up in Brazil, so we will soon achieve parity with the US,” said Siqueira.

Examples used by the Apontador chief to illustrate that the US web companies are not necessarily the first to come up with ideas include a comparison with Foursquare, the location-based social networking website which launched in March 2009.

Siqueira pointed out that in June 2008, Apontador had launched a very similar service to Foursquare, dubbed “Onde Estou”, or “Where I Am”. Another episode was around Picspot, Apontador’s photo sharing product launched just three months before its much more popular equivalent, Instagram.

“What is the difference between us and them? They were in the right place and had a lot of exposure in the mobile space in the US, so people started to talk about them first and use applications that often came after ours,” said Siqueira.

Apontador has just hired its first marketing director, so there is a movement in the company towards improving the promotion of its products. But is the fact that US companies managed to reach much more exposure with similar products a little frustrating?

“I don’t think so. I believe that we are moving in the right direction and the market in Brazil and Latin America is huge,” said Siqueira.

Siqueira added that, as well as several awards and presence in rankings such as the AlwaysOn list, international companies are discovering Apontador’s capabilities: for example, the firm was chosen last year by Twitter as a content provider in Brazil for Twitter Places. Apontador has a partnership deal for provision of geospatial data with Nokia for OviMaps and Google also licenses its maps and traffic information in Brazil.

“When you talk about geolocation in Brazil and some other South American countries, we are the big player. Companies abroad have started to hear about us,” he added.

Building user engagement

Siqueira’s main objective is to remain relevant for its users and corporate clients and be always one step ahead on trends that may influence the direction of location-based services usage.

The company works with key partners for provision of geospatial data such as TeleAtlas and DeCarta. However, all web and mobile development – Apontador’s offering covers the entire spectrum of mobile platforms – is done in-house, mainly in Java and PHP, as well as other mobile-specific tools. Some 130 people work in IT, which is almost the entirety of the firm’s overall workforce.

In the next 12 months, the company’ will be boosting the levels of user engagement inside Apontador and across other social networks by introducing game mechanics capabilities to its product offering, as well as more mobile resources.

Apontador is also working closely to websites such as Groupon and Siqueira believes that group buying is an area of strategic growth. That highlights the importance of partnerships with such companies, which are focusing on the online-to-offline (O2O) business.

“Bringing the online services to the offline world is a key area of growth. You heard a lot about B2B and B2C in the past, but now it is all about O2O, so we are very close to group buying companies,” he said.

Just as companies such as Yelp in the US and Qype in Europe have done, Apontador is enhancing its advertising capabilities in the small and medium business market. Another project in that space and geared at monetizing traffic is around the offering of coupons by the advertiser base to customers.

The small and medium enterprises represent a key market to Apontador: according to Siqueira, the SME market will represent about 50% of the company’s business in four years’ time.

Apontador’s overall strategy is to become one of the 15 biggest Internet players in Brazil – the company is already in the top 20 space. Financially speaking, the intention is to reach a twofold revenue increase within the next year and a tenfold boost in four years’ time.

The company is becoming an increasingly attractive target for trade buyers looking to build a foothold in the South American location-based market. Siqueira mentioned that there have been some approaches and a sale could be still on the cards.

“A possible sale would depend on the offer, but at the moment Brazil is in a good moment and our main goal is to grow – and grow fast,” he said.

Image by ieshraq licensed under Creative Commons.