Andrei's Blog

With over $15MM in annual revenue, it is safe to say that 2GIS (Double GIS) is well on their to figuring out Russia’s local market. Chances are, you’ve never heard of them (nor did I until few months ago) since the company operates exclusively in Russia and Ukraine, but in those markets 2GIS puts up a fierce competition to Yandex and Google. To put things into perspective, Google’s revenue in Russia for 2009 was about $34MM whereas 2GIS brought $16MM in the same period.

Since company’s inception back in 1999, the business model evolved from a traditional GIS and mapping company into a full-fledged local business directory. Today the company maintains business directories for 57 cities and employs a staff of nearly a thousand people. In addition to business listings, transit routes and schedules and a ton of other locally-relevant info, 2GIS captures and maintains the map of every city it works in. As it turns out, aside from the large cities, Russia is poorly mapped. Since 2GIS can’t rely on Navteq or TeleAtlas to provide the data, they have to capture the whole thing themselves and they are good at it. For comparison, here is what the city of Tomsk looks like in Google, Yandex and 2GIS.

Even though 2GIS has one of the best map stacks around (for Russia), they don’t monetize it directly (licensing etc) and derive almost 100% of the revenue through advertisement. The local directories the company produces are completely free and can be installed locally or accessed online or by mobile. Advertisers, on the other hand, pay to make their business listings more prominent. There are about 10,000 of them paying an average $200 on a monthly basis.

Both Yandex and Google are very aggressive in the space and make significant investment in acquiring map data through local partners and crowd-sourcing. It will be interesting to see what 2GIS does to scale across hundreds of cities and step up the competition with the big guys. In the meantime, they are adding ten more cities this year and making the platform available on Android, IPhone and Symbian OSs. I am sure that we’ll be hearing a lot more about 2GIS in the future.

BTW, the company is still private and has grown the entire time.

This entry was posted on Thursday, June 3rd, 2010 at 10:17 pm and is filed under Geo, Local, Maps, Russia. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.