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Chairman's Network Lunch 12 February 09 - Event Review

Date: Thursday 12 February 2009

Time: 12.00 - 15.00 pm

Venue: St. James & Kensington Rooms, 6th Floor, Claridge's, London

Speaker: Sean Phelan, Founder of Multimap

Sean's speech was entitled 'An Entrepreneur's Map':

Sean Phelan started his working life as a ‘techie’, gained an MBA and then got into consulting before he started up Multimap.

What led Sean to Multimap?
Sean had a keen interest in sailing, particularly yachts and in the early to mid 90’s became interested in GSM. In 1995 Netscape went public and this marked the beginning of the dotcom bubble. The name of the company came from ‘multimedia mapping’. At the time maps were available on a Nokia handset (used by estate agents, for advertising etc.) but the technology was very clunky.

It was very difficult to raise money in the late 90’s but he managed to raise £1.85 million from Flextech TV, an interactive TV content company. Multimap grew rapidly through the year 2000, before the dotcom slump came along. In 2001 the company was running out of money, they made cutbacks in hiring etc, and sold their way through it. At the time nothing with a .com was being taken seriously.

2004 signalled the move from PDA to Tomtom but Multimap were hesitating as they weren’t sure whether the slump was over. In 2005 Google launched draggable maps. API was offered for free (build your map into your own site) and there was no advertising.  As a result, Multimap began losing a lot of customers to Google. They were also paying Ordnance Survey costs. Microsoft and Google then began investing a lot of money into the technology.

Flextech merged with Telewest and Telewest subsequently merged with NTL who merged with Virgin Media. The options for Multimap at the time were:
• Buy out Flextech (but they didn’t have 3 million) which would have made Sean a 75% shareholder
• A possible AIM listing
• Appoint corporate advisors and go for a trade sale
However, the website looked very outdated – who would be interested in buying?

They decided to sell 40% of the company and buy Flextech and went out to the VCs for private equity. Tomtom made an offer to TeleAtlas which sent panic through the industry. Multimap was open to bids for 40% and also for 100%.

On the 18th of October 07 best and final offers were invited and the company was heading for an exit. A higher taper relief was on offer if they exited by the end of April 08 which helped with the decision making process. Microsoft and two other parties made offers and on 12 December 07 an announcement was made re Microsoft.

Sean wrapped up by discussing the obvious comparisons between the current credit crunch and the dotcom slump but felt that the credit crunch was different. He talked about his role within Multimap and the job satisfaction that he enjoyed. He spoke fondly about his time at Multimap and advocated the use of open plan offices to encourage socialisation and the employment of a culture where people feel part of the company and have a sense of ownership.
 

This review has not yet been approved by Sean Phelan

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