Baidu said to invest in indoor-maps startup to vie with Alibaba2 min read . Updated: 02 Sep 2014, 07:06 PM IST
The investment by China's largest Web-search service values IndoorAtlas at about $40 million to $50 million people familiar with the matter said
Beijing: Baidu Inc is investing about $10 million in IndoorAtlas Ltd. to expand mapping services inside buildings and shopping centers as it steps up competition to e- commerce giant Alibaba Group Holding Ltd, a person familiar with the matter said.
The investment by China’s largest Web-search service values IndoorAtlas at about $40 million to $50 million, said the person, who asked not to be identified because the investment isn’t public yet.
Billionaire founder Robin Li’s investment decision comes days after his company joined hands with Dalian Wanda Group and Tencent Holdings Ltd. to form an online shopping venture. Li is integrating functions such as search and maps to win more advertising sales by connecting mobile users with locations off line, from coffee shops to movie theaters.
Baidu shares rose 0.3% to $214.52 in New York on Monday. The stock has climbed 21% this year.
IndoorAtlas is the world’s first to use magnetic anomalies inside buildings to pinpoint indoor locations, with results that are accurate to less than three meters, or about 10 feet, according to its website.
Founded in 2012 as a spinoff from the University of Oulu, Finland, IndoorAtlas was incorporated in the US with an office in Mountain View, California, last year. It also has research and development centers in Oulu and Oxford, England.
Baidu is investing in mobile applications to capture rising Web traffic on smartphones and tablet computers. The venture with Wanda plans to target that online-to-offline segment of directing mobile Web users to nearby shops and restaurants, Wanda chairman Wang Jianlin said last month.
That’s also an area where Alibaba, China’s biggest e- commerce operator, is seeking to expand its presence. In March, Alibaba agreed to buy a stake in Intime Retail Group Co., owner of department stores and supermarkets, as the company integrates online and offline shopping.
Alibaba in July acquired AutoNavi Holdings Ltd. in a deal that valued the company at $1.5 billion to bolster its Internet mapping tools ahead of an initial public offering.
While Baidu already offers navigation software, it’s of little use inside buildings or shopping centers to locate a specific store or restaurant that users may have found in an online advertisement on their smartphone.
IndoorAtlas raised $4.5 million in a round of funding led by Mobility Ventures and the Finnish seed fund KoppiCatch, the Wall Street Journal reported in June. The valuation for IndoorAtlas wasn’t disclosed at that time, according to the report. BLOOMBERG