In 2013, a small Indian company named Genesys decided to beat Google at one of the things that Google has been an undisputed champion at - maps. While Google Maps had long existed in India, Genesys wanted to leave Google behind on Street View - the 360 degree view that lets you navigate through a map on your phone, while giving you feels of cruising down the street.
Google had already launched Street View in several cities across the world, but India was far too complex and getting government clearances was a daunting task. In the meanwhile, Genesys had mapped out 1.5 lakh kilometres for its own version of Street View - WoNoBo. However, for reasons unknown, WoNoBo never took off, and instead ended up being bought by Olx to offer 360 degree views of homes and localities for Olx Homes.
Cut to 2022, Google announced that it’s launching Street View in India, by partnering with two local firms - Tech Mahindra, and, wait for it, Genesys. It is expected to be launched across 10 cities first, and then be extended to feature more than 50 cities, covering more than 7 lakh kilometres, over the next couple of years.
Interestingly, ten years into the game, while Genesys didn’t gain anything by trying to beat Google, will it at least gain by helping Google take on the Indian market?
Street View - What’s the deal?
Other than just the cool idea of being able to walk down any street by using your phone, Street View has held much more potential through:
Offering APIs to local developers to help them deliver better services (like Olx offering a walk down the neighbourhood for a place that you may want to rent out)
Enhancing the classifieds experience by offering virtual views of local establishments (like being able to check a restaurant out from the street to all the way in)
But whether Street View makes money or not, or is successful or not is immaterial - Genesys will anyway make money by mapping the entire country out for Google.
But why does Google need Genesys?
The Indian government released a geospatial policy, which allows only local entities to acquire, collect, store and own imagery data. This makes it necessary for Google to license the data out from a local company instead of doing it themselves
You may not have heard of Genesys, but it is a company that has been in existence for more than 20 years, building its expertise in geospatial mapping
Genesys knows its way around since it has already done this exercise back in 2013, and has enough experience in finding its way around permissions and complexities
This deal made for a strong win for Genesys, which can now take on its dream of mapping India, and leaving the worry of monetising the product to the mapping behemoth themselves.
Maps - They’re more than an atlas
Getting on to the street with fancy equipment hoisted on vehicles and mapping entire cities out isn’t the only thing Genesys is good at. Mapping has several layers,
Geospatial mapping - Maps have moved from 2D to 3D, and now provide virtual environments for urban planning, archaeological research, security and surveillance, tourism and transport management, etc.
LiDAR engineering - High definition scanning systems that provide high accuracy data to develop topographical maps and 3D models
These solutions (and a combination of them) are used for various industries, and Genesys has carved out solutions for several of them:
Network planning for the telecom industry
Rollout solutions for gas distribution companies
Infrastructure planning for building roads, railways and metros
Solutions for urban planning, traffic management and city planning
Genesys’ expertise lies in combining several technologies, and building solutions that are perfectly built to solve problems across industries.
The potential of mapping has also attracted the Indian government into releasing something called the National Geospatial Policy in 2022, where again, Genesys has immense potential to benefit from.
Digital Twins - What’s the fuss about?
Amongst many goals, The National Geospatial Policy also aims to promote the use of National Digital Twins - where Genesys can have a significant play.
Digital Twin Cities are much like a real-life SimCity, where data and technology converge to create a virtual replica of a city. These Digital Twin Cities don’t just create a 3D map of the city, but also continually collect data from sensors, real-time insights into the city's functioning.
They then use all of this data for various activities including - urban planning, disaster management, traffic management, infrastructure planning, energy management, water management, waste management, and much much more.
Genesys has already tied up with a company called Esri India to make Digital Twins of the whole of urban India. The programme will gather 3D data on the top 100 cities of the country. While Genesys’ expertise lies in mapping, Esri delivers technology solutions for 3D modelling, data analysis and solution development - together building out practical offerings.
India’s ambitious goals in the geospatial industry to be achieved by 2035 are expected to give the entire sector a big boost. Genesys is likely to be a key beneficiary given:
Its 20 plus years of expertise in the geospatial mapping space
Changes in the industry in favour of local players
The government’s thrust on Digital Twins, and Genesys’ early strides in it
Past work demonstrated by Genesys, from disaster management in Kochi to revenue management in Kanpur and identifying ecological sensitive zones in Mahabaleshwar
Genesys - What’s in store?
After its failed attempt at displacing Google, and because of an in-general lack of lustre in the sector, Genesys has faced stagnancy over the last decade. However, 2021 marked a massive change in the fate of Genesys, thanks to its strategic alliance with Google Maps, and the potential in Digital Twin Cities.
Since the commencement of these two triggers, Genesys has already seen its stock price go up by 10x in just 2 years. It has exhibited strong financial performance over the last two years with:
Revenue growth of 50% in each of the last two years
Profitability turning around from an EBITDA loss of Rs. 3 crore (-4% EBITDA margin) in FY21 to Rs. 58 crore in EBITDA (32% EBITDA margin) in FY23
Additionally, it also raised Rs. 250 crore from marquee investors, with the round being led by Malabar India, to make the most of the pivotal step by the government in the geospatial industry.
Both the opportunities- Google and Digital Twins, lay out a road for Genesys, which makes a case for the accelerated growth to continue over the next 5-10 years:
While the first phase of Google Street View only covers 1.5 lakh kilometres, the goal of 7 lakh kilometres implies that much more work still needs to be done
While the government has released the geospatial policy, it is yet to kickstart meaningfully if it has to achieve its 2035 goals, which will mean a large opportunity unfolding over the next 10 years
Despite the meteoric rise in stock prices, the stock still trades at a 12x one-year forward EV/EBITDA, which is much lower than the average of 26x EV/EBITDA it has historically traded at.
The relative undervaluation at current levels, especially given the near-term growth upgrade, and an orbital shift in the long-term trajectory of the company, makes Genesys worth keeping close on the watchlist.
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