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Startups

SoftBank-backed Mapbox finds its way into Japanese smart industry

US-based mapping near-unicorn sees new opportunities in aiding automation

For Komatsu, Mapbox has been providing a mapping service that allows engineers to monitor construction sites and arrange workloads in real-time. (Source photos from Reuters/Getty Images)

PALO ALTO, U.S. -- U.S.-based mapping startup Mapbox is taking a different direction in Japan. 

The company, which provides digital map services to the likes of Foursquare and Lonely Planet in its home market, now counts one of Japan's biggest construction conglomerates as a customer. The shift is part of Mapbox's bet on automation and smart industry as future opportunities for growth.

Mapbox was founded in Washington, D.C., in 2011 and set up its first office in Japan this July. A $164 million funding round led SoftBank Group's Vision Fund in late 2017 to value the company at close to $1 billion -- nearly unicorn status. They declined to disclose the exact valuation. 

Its focus is not on making maps itself, but rather on packaging its collected mapping data into customized map applications for clients. Traditionally these were companies with consumer-facing products like weather sites and dating apps, but in the future -- the company hopes -- this will include industrial applications as well.

Mapbox sees opportunities in Japan's aging society and chronic labor shortage. "We want to be part of Japan's industry automation," said Dave Cole, vice president of business operations and strategy at Mapbox.

Cole said both private companies and the government are keen to use automation and cutting-edge tech like machine learning to boost productivity, and there is room for effective mapping tools in that equation.

SoftBank's backing has brought Mapbox more than just capital. Within a year of its debut at SoftBank World, an annual event hosted by founder and Chairman Masayoshi Son, Mapbox scored two big-name customers -- Yahoo Japan, the country's top internet platform, and Komatsu, the leading construction equipment maker.

For Komatsu, Mapbox has been providing a mapping service that allows engineers to monitor construction sites and arrange workloads in real time. For example, they can keep tabs on autonomous diggers and bulldozers via drones flying over the sites. The Mapbox maps can also help dump trucks queue up at the right spots when needed.

"Komatsu is transforming the way cities and infrastructures are built and how automation works. And now, they're using Mapbox to help their site management in real time, and instruct autonomous machinery on where to work, and more," Mapbox founder and CEO Eric Gundersen said in a blog post. "This is a platform that is going to be used globally, not just in Japan," he added.

Gundersen told the Nikkei Asian Review at the most recent SoftBank World in July that the next sector in Japan that Mapbox will move into is automotive, as the country is "such a critical global player in the space." The company is in talks with drone companies, agriculture firms and fitness apps as well, Gundersen added.

Mapbox opened its first office in Japan in July shortly after partnering with the country's biggest map data provider, Zenrin.

Founded in 1948, Zenrin has over 70 years of experience mapping Japan, with data covering nearly 100% of the country's roads and neighborhoods. By integrating Zenrin data into Mapbox's platform, the company can provide detailed road conditions in even smaller towns and alleys, and the mapping service will be provided in both English and Japanese.

"We are going to be the number one mapping provider in all of Japan and we'll be able to do this because we have the best data in all of Japan through our partnership with Zenrin," Gundersen said.

This partnership is crucial, because unlike Google Maps, Mapbox does not collect its own mapping data through, for example, proprietary satellites. All of the map data Mapbox uses comes from partners like Zenrin, open government data sources or commercial databases.

"With open-platform roots, Mapbox became the preferred mapping partner for companies like IBM and Foursquare long before Google Maps announced its API pricing change in mid-2018 and fueled a mass exodus of small and mid-level developers from the latter's platform," Ishveena Singh, geospatial technology analyst at Geoawesomeness.

Google Maps announced a price hike in August 2018. Mapbox plans to follow suit and raise prices in November, but Singh said its pricing will remain competitive even after the hike. "They have increased the free tier for almost every product and have a transparent pay-as-you-go policy for heavy users," she said.

Mapbox does not see itself as a direct competitor to Google Maps since it does not have its own consumer-facing app. "It's certainly possible that Google can use our API's as well in Japan if they're interested," Gundersen said. 

After collecting the map data, Mapbox provides customized maps used by third-party apps such as Foursquare, the Weather Channel, Lonely Planet and many more. Developers of these apps pay Mapbox based on usage. Meanwhile, Mapbox's mapping technology collects anonymous user data from these third-party apps to improve its own data set.

"The more people who use the map, the better the map gets," Cole said.

That is one reason Mapbox chose Yahoo Japan as its first consumer-faced app customer in the country. Yahoo Japan's massive user base will provide a sizable volume of user behavior data that Mapbox needs in order to better adapt to the local market.

Yahoo Japan will launch its next generation of maps powered by Mapbox this fall, Mapbox said.

"As the most visited destination in Japan, we need to provide the best, most performant map to our users. Integrating with live location platform Mapbox will help us deliver new and customized features for our user base," said Keita Hakoda, manager of Yahoo Japan's local services, in a press release. 

Mapbox is not able to take this approach everywhere, however.

"In China, all the data that we would collect is stored through our local partners. And that's part of the agreement due to Chinese internet regulation," Cole said.

Mapbox launched in China three years ago, becoming Mapbox's first foothold in Asia. It now has offices in Shanghai, Beijing and Hong Kong, and its customers include Alibaba Group Holding's travel app Fliggy and fitness app KEEP.

"In China, we get all of the data through local data partners that are licensed by the Chinese government. We at Mapbox really focus on providing technology support services through those partnerships, and so local customers can access to the same kinds of developer experience we offer everywhere," Cole added.

As for future plans in Asia, Cole said the company will keep looking for opportunities but "for now, [it is] going to stay pretty focused on building out the new operations in Japan and expanding our operations in China."

Nikkei staff writer Wataru Suzuki contributed to this article.

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