Networks in Motion Inc.
Where: Aliso Viejo
12-month sales: $62 million
Two-year growth: 717%
OC workers: 154
Business: software for wireless phones, mobile devices
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Aliso Viejo’s Networks in Motion Inc. owes its growth to a customer lineup that’s a who’s who among wireless service providers.
“We’re busy as heck, but that’s good these days,” Chief Executive Doug Antone said.
Networks in Motion ranked No. 5 on the Business Journal’s 2009 list of fast-growing private companies with sales growth of 717% for the two years through June 30.
For the 12 months through June, the company saw sales of $62 million, up from $7.6 million for the same period in 2007.
The company’s software provides what industry insiders call “location-based services” for wireless phones and other handheld devices.
The software looks up maps, offers driving directions and searches for local businesses.
Newer versions touch on social networking with “friend finders” and “child trackers” that allow parents to keep tabs on their kids’ whereabouts via their phones.
Other features veer into entertainment, including searches for movies, reviews and local events.
Customers include Verizon Wireless, part of New York-based Verizon Communications Inc., and other big wireless service providers.
Sales are growing on contracts with Verizon, Alltel Wireless, Sprint Nextel Corp., AT&T Inc., United States Cellular Corp. and Sony Ericsson Mobile Communications AB, among others.
The company’s software also powers AAA Mobile, a navigation and trip-planning program used by the American Automobile Association.
And it runs YellowPages.com Mobile, a local business search program used on AT&T’s phones.
The biggest driver of growth, according to Antone, is “awareness” of what phones can do.
“More people are starting to understand the power that’s in their mobile devices,” he said. “People now know that you can get more than just a map on your phone. That overall awareness is creating a lot of new customers for us.”
Another big push for Networks in Motion is that smartphones are taking up a bigger chunk of cell phone sales these days.
Sales of smartphones—loosely defined as cell phones that run an operating system like that of a computer—are expected to grow about 30% next year and 40% in 2011, according to data from El Segundo-based market tracker iSuppli Corp.
“That creates a bigger market footprint,” Antone said. “More memory on these devices allows people to put data applications onto them.”
The company has made a handful of acquisitions in the past two years that have beefed up its technology for getting real-time data on phones.
It March, the company picked up some assets from TrafficGauge Inc., a Seattle-based maker of software for real-time traffic.
“The biggest single one was real time traffic capability,” Antone said. “That’s created a new set of customers for us.”
The company has spent the past year or so finishing its own brand of software, dubbed Gokivo Navigator.
It’s a bit of a departure for Net-works in Motion, which typically sells generic versions of its software directly to wireless service providers and de-vice makers.
Gokivo is available for purchase at Research in Motion Ltd.’s BlackBerry App World and Apple Inc.’s App Store for the iPhone and iPod Touch for around $10.
“We had to come up with our own brand name,” An-tone said. “In this open environment, you will start seeing more navigation brands available so it’s an im-portant part of the strategy.”
So far, Gokivo is “a small part of revenue,” he said.
Networks in Motion is eyeing service providers abroad. It now has software in 10 languages and 38 countries.
A year ago, Networks in Motion doubled its space in a move from Irvine to Aliso Viejo. It has some 150 local workers and offices in Sweden and Spain.
Antone estimates that Networks in Motion has roughly half the market for mobile navigation software.
More than 3 million people have subscribed to Networks in Motion’s software via their wireless service providers, according to the company.
The company takes a cut of the monthly or daily fee customers pay for the service—an average of $10 a month. It doesn’t disclose how big of a cut it gets from the monthly fee.
The startup was founded in 2000 by husband and wife team Michael and Angie Sheha.
Both electrical engineers, they met at California Institute of Technology’s Jet Propulsion Laboratory.
The company had an angel round of funding from Stephen Petilli, cofounder of Pasadena-based Pivotal Technologies Inc., in 2000.
Irvine’s Broadcom Corp. bought Pivotal for about $243 million in 2000.
Petilli also knows the Shehas from the Jet Propulsion Lab.
After weathering the technology downturn in 2001, Networks in Motion got off the ground with a break in 2004.
It beat out 60 other companies in a contest run by Chicago-based online map kingpin NavTeq Corp.
The win got Networks in Motion additional startup money as well as free use of NavTeq’s map data for a time.
The win also helped the company land a major deal with Verizon in 2005. Deals with other service providers followed.
Networks in Motion raised a $6.5 million round of venture funding in late 2004 and a second $10 million round in 2006.
Antone was brought in by San Diego’s Mission Ventures, which led the second round.
The company turned a profit in early 2008.
“We are very profitable now,” Antone said. “The market has continued to hold for us and we are really fortunate.”
The company is set to continue to make acquisitions.
“We are out looking at companies to buy,” Antone said.
