Mappo

The Need

Automobile manufacturers worldwide are in the midst of searching for new revenue streams. The decline in profits from electric vehicle sales and increased competition from Chinese and Korean manufacturers are putting significant pressure on automakers. This has led them to identify in-car software as a key future revenue source. Most manufacturers are investing hundreds of millions of dollars in developing solutions aimed at generating income from activities within the vehicle. For example, STELLANTIS (Peugeot, Fiat, Lancia, Citroën, etc.) has set a goal for 2030 in which 30% of its revenue will come from in-car services.

Another issue that needs addressing is the driving experience itself. Sabrina Yuan, Chief Strategy Officer of the Volkswagen Group, summarized the shared position of herself, the Chief Research Officer of Mercedes, and a senior executive at STELLANTIS in late June 2024: "Gaming and entertainment will play a central role in the driving experience of the future. We must offer a variety of applications to provide continuous value to our customers."

A further challenge arising from the statements and investments of automakers is how to utilize the free time of users in autonomous vehicles. Autonomous driving frees up significant attention and time that would otherwise be spent on driving, and the rapid technological advancements in this area create a new need: providing value to users' free time. Over the past three years, MAPPO has identified a growing demand from all automakers, without exception, to incorporate entertainment content into vehicle services. Automakers have signed agreements to integrate leading brands such as YouTube, TikTok, Disney, Facebook, Spotify, Amazon, and Booking, among others, to offer a rich and diverse entertainment experience for vehicle users.

The Solution

Over the past few years, MAPPO has been refining and perfecting its solutions to address the following key challenges:

1. Creating New Revenue Streams
2. Enhancing the Travel Experience
3. Maximizing Free Time in Vehicles

How does MAPPO effectively tackle these three challenges?

1. Creating New Revenue Streams: Automakers can monetize various software applications, primarily focused on entertainment, through diverse business models. MAPPO is a key player in this space, contributing to increased revenue for both automakers and software providers. All business models are built on revenue-sharing agreements.
2. Enhancing the Travel Experience: MAPPO enriches the travel experience by offering podcasts relevant to the journey, songs tied to specific locations, historical insights, information on sports or culinary traditions in the areas being traveled, as well as quizzes and trivia related to the precise locations the vehicle is passing through.
3. Maximizing Free Time in Vehicles: MAPPO’s content was rigorously tested by Volkswagen (VW) in user trials, where it received impressive ratings, with an overall satisfaction score of 6.6 out of 7. Additionally, MAPPO plans to extend its offerings with a mobile app, enabling users to continue accessing content outside of the vehicle. This ensures that the experience can continue both before entering the vehicle and after leaving it, as requested by most automakers.

The Technology

The company has developed the STORY CREATION MACHINE, a powerful AI engine capable of automatically generating content at a world-class level. The company believes there is no need to create new content but rather to leverage the wealth of material that has already been written, composed, and created throughout human history. Over three years, the company refined and tailored the engine to meet user needs. Today, the STORY CREATION MACHINE can generate content for a large city within a few hours. To date, the company has created 250,000 stories across 60,000 locations (POIs) in the U.S., Korea, Israel, and Europe. A POI is a specific location, such as a street, site, or address, and the stories include the history of the location, video clips, excerpts from books, trivia games, puzzles, interesting facts, information on cuisine, sports, and music.

The advanced capabilities of the engine and the speed of content generation enrich the travel experience, providing users with a wide range of content and adding relevant context to their journey. All content is delivered to users in audio format.

The company is currently developing several new features, such as real-time content creation, personalized content delivery based on user preferences, geographical location, news events, weather, and more. The concept of location-based content creation is not new, but all previous attempts relied on manual work that was costly and limited in scope. MAPPO has cracked this challenge with the help of a top-tier software team.

The search for Points of Interest (POI) is a key step in the content creation process of the SCM (Story Creation Machine). This process is the first stage in the production chain and is carried out before any additional content creation tasks. The search for POIs is conducted in the following steps:

1. Link Analysis: The SCM begins by analyzing all the links found on the Wikipedia page of the desired location. Each link is considered a potential POI candidate, which will be evaluated in the subsequent stages of the process.
2. Candidate Evaluation: To determine whether a candidate is indeed a POI relevant to the desired location, the SCM uses an algorithm that relies on various data sources, such as coordinates, WikiData, and OpenStreetMap. This process helps filter out irrelevant candidates and ensures that only genuine monuments/POIs are included in the final content.

Content Creation

The content creation process within MAPPO's SCM system leverages advanced language models (LLMs), such as GPT-4, to generate precise and high-quality content for users. The development team has invested significant efforts in ensuring the content's quality and accuracy, making sure it is not only engaging but also reliable and precise.

To achieve this, the company employs several strategies:

1. Guideline Management: The team meticulously maintains a library of guidelines used to generate content from the large language models. These guidelines are carefully managed and regularly updated to ensure they produce high-quality, relevant, and consistent responses from the language models.
2. ELO Rating System: To evaluate and enhance the content creation process, the company uses an ELO rating system combined with human feedback. This system helps identify areas for improvement and ensures that only the most successful methods are used for content generation.
3. Reducing Hallucinations: One of the challenges with large language models is their tendency to generate content that may be inaccurate or irrelevant. To address this issue, MAPPO implements a combination of general rules, post-generation processing techniques, and manual review processes to filter out potentially incorrect information and ensure high content validity.

By utilizing advanced language models like GPT-4 and applying stringent quality control measures, MAPPO's SCM system is capable of producing informative, engaging, and reliable content for users worldwide.

Mappo for Automotive

Mappo’s solution for the automotive industry provides engaging and popular cultural content for drivers and passengers, based on geographic location and personal preferences learned from previously displayed and selected content.

Key Product Components:

1. Mappo App for Android Automotive: This app maps the route and uses voice and audio to deliver content tailored to the user’s future location.
2. Advanced Content Selection Algorithm: This algorithm selects the most suitable content for drivers and passengers from thousands of options, considering personal preferences.
3. AWS OpenSearch: This platform enables rapid access to location-based content, ensuring a seamless and personalized user experience.
4. Content Management System (CMS): A web-based application designed for creating and editing content, allowing users to enrich their travel experience with high-quality and interesting material.
5. Story Creation Module (SCM): A central engine based on AI algorithms that automatically generates location-based cultural content, providing users with unique cultural experiences tailored to their location.

Automotive Product

Mappo’s flagship product for the automotive industry is an application for Google’s dedicated in-car operating system, Android Automotive. It uses an algorithm to select engaging audio content in real-time based on location, preferences, and user history. Integration with AWS OpenSearch allows quick access to location-based content.

The Market

The relevant markets for the company are the automotive market, the tourism market, and the location-based entertainment market. The size of these markets is clearly illustrated in the table below. According to this data, the relevant market share for MAPPO is estimated at $1.4 billion. This market size is derived from an analysis using the TAM, SAM, SOM methodology.

The rapid growth of the new infotainment market in recent years has been nothing short of extraordinary. This trend reflects a broader shift from focusing on hardware to prioritizing software as a key revenue stream. This evolution extends beyond infotainment to encompass navigation, driver assistance systems, telematics, and driving software.

- HARMAN, with whom MAPPO has a distribution agreement, reported over $8 billion in revenue in 2022, with the majority generated from in-vehicle services and software, including infotainment solutions.

- CONTINENTAL, with whom MAPPO has a Statement of Work (SOW), recorded $31 billion in revenue in 2021, with a significant portion derived from in-vehicle software sales.

Global In-Vehicle Infotainment market

• According to GlobalData the broad in-vehicle Infotainment market (HW|SW systems)   valued ~$35.4 billion in 2023 and expected to grow at a CAGR of 7.74% between 2021-2025 and further at a CAGR of 4.39% from 2025-2030, achieving market value of ~$49.6 billion in 2030.

• Overall global software automotive market size is expected to reach ~$84 billion by 2030 and therefore more than double over the ten-year period from 2020 when the market size is estimated at ~USD 34 billion.
• Infotainment, connectivity, security, and connected services will grow at pace with the overall software market, becoming the second-largest software market by 2030.
  • Reaching $14 billion in 2025 and $18 billion in 2030, representing 9% CAGR between 2020-2030, according to McKinsey.

Competition

Based on feedback from all the automotive manufacturers we’ve engaged with, they are not aware of any product similar to MAPPO. The key factors that convinced these manufacturers to collaborate with MAPPO include:

1. Originality: An intriguing product that tells the story of the journey to passengers in an engaging way, offering a wide variety of content types, including music, text, sports, history, trivia, and family games.
2. Automation: The ability to automatically generate content enables the company to deliver vast volumes of material.
3. Global Reach: The capability to produce content anywhere in the world, in any language.
4. Speed: The ability to provide content for large territories (cities, countries, regions) within just a few days.

It’s important to note that even in the absence of direct competitors, MAPPO operates in a content-rich environment with various forms of media. Our competition in the car is for the user’s attention: we’re all familiar with using the radio, Spotify, phone calls, and listening to emails during drives. This creates a competitive landscape where we need to present an attractive product, tailored specifically to the driving experience, to capture a share of the user’s time.

The company has successfully developed high capabilities in producing diverse content and tailoring it to different audiences: content for children and adults, music lovers or trivia and history enthusiasts, solo drivers or family trips. MAPPO offers a personalized product in contrast to the generic content typically available in cars. Our content evolves as the journey progresses, effectively alleviating boredom and keeping users engaged.

Competitors - Financials

The direct competitors have not published financial data; however, attached are indicators that provide insights into the category:

Business Model

As previously explained, automotive companies are undergoing a significant shift in their revenue sources. It is evident that the focus has moved toward software development as a primary income stream, supported by substantial investments from the industry.

Automotive manufacturers are transitioning to a subscription-based model and other methods for generating consistent revenue streams from cloud services, selling connectivity based on bandwidth, and providing driver information. These companies are investing substantial amounts in research and development to leverage AI technologies and machine learning. Notable companies in this field include HARMAN and CONTINENTAL (both of which have agreements with MAPPO), as well as BOSCH and PANASONIC.

Revenue Projection

The projected revenue stream is based on calculations that consider several variables:

1. The automotive companies with which the company will collaborate.
2. The number of vehicles equipped with MAPPO's software.
3. The revenue per vehicle in a subscription and revenue-sharing model with the automaker, ranging from $0.5 to $1.0 per month.
4. Income from licensing content to the automaker.

Timeline

These projections are based on several proven facts:

• Development of the company's unique technology.
• Expansion and enhancement of the quality and quantity of content that the company is capable of producing, made possible by advancements in technological development.
• Business development, as evidenced by collaboration with some of the world's leading automotive manufacturers, as shown in the table below.

The following table outlines the business development plan for the coming years, focusing on expanding market penetration in the automotive sector and entering new markets such as airlines, tourism, and smart cities.

Go-To-Market Strategy

In 2024 and 2025, the company will continue to focus on the automotive market, with plans to expand into new industries starting in 2026.

• Hyundai: Beginning in July 2024, Mappo will enter the operational phase with a clear work plan provided by the South Korean automaker. Hyundai plans to launch an in-car app store in March 2025, by which time Mappo will have completed the necessary technological work. The product will then enter the commercial phase, with further upgrades planned for Hyundai vehicles by September 2025.
• CONTINENTAL: The world's second-largest Tier 1 automotive supplier has already provided Mappo with its work plan for the coming year. By the end of 2024, Mappo's technology will be integrated into CONTINENTAL's platform, allowing the company to offer Mappo's solution to automakers worldwide. This commercial phase will begin in early 2025.
• Volkswagen Group: Comprising 13 automotive brands, Volkswagen has completed its technical and content evaluations with Mappo. Volkswagen, through its software company CARIAD, is currently in discussions with its group brands to select those that will collaborate with Mappo. Work with the chosen manufacturers is set to begin in Q4 of this year and conclude by Q1 2025.
• Renault: In October 2024, a Renault test vehicle in Paris will feature a range of startups aimed at dramatically enhancing the in-car experience, with Mappo as a key component. Following this trial, Mappo will begin working with Renault to integrate its solution into the infotainment systems of Renault vehicles, with this phase expected to conclude by March 2025

Ongoing Development: It's important to note that development work with all automakers continues even after the initial installation in vehicles. The go-to-market process is long, as automakers release new models requiring technological adaptation and further business development.

Expanding Client Portfolio: Throughout 2024, Mappo is actively working to expand its automotive client portfolio. The company has already initiated discussions with General Motors, Stellantis Group (Peugeot, Fiat, Alfa Romeo, etc.), and the Geely/Volvo Group in Stockholm.

Maps: Mappo sees mapping companies as a strategic platform for its continued growth. Maps serve a wide range of social and business needs, opening up long-term global opportunities for Mappo. The company is prioritizing collaboration with TomTom, a Dutch manufacturer specializing in GPS systems, due to the strategic importance of this field for Mappo. Development activities are expected to begin by the end of 2024.

Airlines: The idea of providing airlines with content for in-flight screens was first discussed with El Al in May 2024. The goal is to offer two types of content: pre-landing information about the travel destination and content about countries over which the plane is flying. Another potential avenue is integrating Mappo's service into airline apps, allowing users to access Mappo content via the app. The development path involves working with a U.S. company that has developed in-flight broadcasting technology for half of the global market. This connection was established through El Al, which has shown clear interest in the product. The timeline for this project is uncertain, as Mappo has no prior experience in this type of work.

Travel Industry: The travel industry is vast, so Mappo has chosen to enter through a specific vertical that is accessible and has a clear business model: major tourist cities. Mappo has a clear advantage in this market: its content is not limited to famous tourist sites. Many of the stories generated by Mappo focus on fascinating, lesser-known locations, offering unique narratives through music, quizzes, trivia, sports, history, and local cuisine stories.

Mappo is beginning its business development efforts in several major tourist cities: Jerusalem, Berlin, Vienna, Salzburg, Barcelona, and Madrid. This is the company's second attempt to enter this market. The first attempt was made in the company's early days and was unsuccessful due to the lack of technology capable of generating massive amounts of content in any language, as well as the variety of content types that Mappo can now produce. The approach to these cities is being made through the Israel Export Institute and local economic attachés (Spain and Berlin) or through Mappo's representative in Europe for Vienna and Salzburg.

Exit Strategy

Our exit strategy is long-term and will always be a function of the specific stage the company is in at any given moment, including the extent of business development, signed agreements, product-market fit, and the growth of the infotainment market among automakers, as well as the business models driving the company.

Given the current status of the company, acquisition by a strategic partner in the automotive or mapping industry seems most likely. The significant growth of the infotainment market, and MAPPO's strong position within it, suggests that a key player in the automotive sector—whether a car manufacturer or a Tier 1 supplier—would be the most probable acquirer of MAPPO.

• Potential Automotive Acquirer: This could be an automaker that has gained experience working with MAPPO and is familiar with the company's capabilities, workforce, and business potential. We have already brought this possibility to the attention of two such entities—a group of automakers and a global Tier 1 company. The likelihood of this direction is based on aligned interests regarding the product and its fit with the needs of the automotive company or Tier 1 supplier. This process could lead to either a merger with the global company or the acquisition of MAPPO, with the company being managed according to the acquirer's strategy.
• Potential Tech Acquirer - Google: Google's interest in the automotive industry is enormous (surpassing that of Apple), and it invests hundreds of millions of euros annually in developing the Android Automotive platform—vehicle management software. Additionally, MAPPO has already actively explored potential partnerships with Google Maps. The probability of this direction is based on the strategic contribution MAPPO can offer Google Maps by adding an entertainment and cultural content layer to their mapping services. MAPPO's ability to differentiate the maps with its unique and pioneering product stands out.
• Long-Term IPO: In the longer term, over several years, MAPPO could be ready for an IPO. Once the company demonstrates satisfactory levels of revenue and profit, it will aim for an IPO. The preferred markets for such an offering would be the London and Australian stock exchanges, both of which have shown a strong appetite and openness for young tech companies.

This funding round will strengthen MAPPO's efforts in two key areas:

1. Technological Development: The company aims to enhance its content offerings and add new entertainment and cultural features. The funds raised will be used to implement the following developments:
   • Music Playlists: Integration with Spotify to create personalized music playlists. The specification phase is complete.
   • Real-Time Local News (On the Fly): Providing up-to-date local news based on the user’s location. The specification phase is complete.
   • Personalization: Developing essential features to tailor content to the user's preferences and habits.
   • Updated Android and iPhone Apps: Enhancing the mobile applications for improved user experience.
   • MAPPO Global: A web infrastructure that allows any user, anywhere in the world, to access MAPPO’s content for business, entertainment, and personal use.
   • Continuous Information: Providing users with up-to-date information on entertainment and leisure options in their current location and surrounding areas.
2. Marketing and Sales Efforts: The company needs to increase its visibility among key players in the automotive, mapping, travel, tourism, and smart city industries. MAPPO plans to open offices in Europe and hire marketing professionals to advance its Go-to-Market strategy as detailed above. The company's strategy in this area will focus more on B2B efforts, including conferences, exhibitions, and public relations, than was financially possible before.

If the company does not have access to all the necessary resources to fully implement this plan, it will prioritize the technological developments listed above in order of importance.