- Pact with Dutch map company covers more than 300 cities
- TomTom set to benefit from Uber's growth, analyst says
TomTom NV closed at the highest level in more than six years after the Dutch maker of navigation software agreed to provide maps and traffic data to Uber Technologies Inc. drivers globally.
The two parties signed a multiyear agreement for the partnership, which covers more than 300 cities globally, Amsterdam-based TomTom said in a statement Thursday. TomTom data will be included in the mobile app used by Uber drivers. Financial details of the transaction weren’t disclosed.
The deal will boost TomTom’s licensing orders, and lead to significant revenue growth in the coming years, Harold Goddijn, chief executive officer of TomTom, said at a Morgan Stanley conference in Barcelona Thursday. The deal with Uber, the startup valued at more than $50 billion, also reveals one advantage TomTom has over rivals such as Google and HERE: its independence.
Customers “don’t have to share sensitive information with other companies,” Goddijn said. “Contrary to competitors we provide the technology, but also all the databases to run it.”
Shares of TomTom closed 8.2 percent higher at 11.14 euros in Amsterdam, bringing this year’s advance to 101 percent and valuing the company at 2.6 billion euros ($2.8 billion).
TomTom is one of a few global companies with digital-map assets, which are sought after by companies ranging from technology firms to social networks and e-commerce providers to car manufacturers. Nokia Oyj agreed to sell HERE to a group of German carmakers in August. Uber was among suitors for the business, people familiar with the matter said earlier this year.
Over time, HERE’s changing ownership may have a positive effect on the deals his company wins, Goddijn said.
“The Uber deal is a big plus for TomTom because of the brand itself, the high margin revenue that it can generate, but also because it provides optionality,” Martijn den Drijver, an analyst at SNS Securities in Amsterdam, said in a note. Should Uber expand to services beyond ride-hailing, where location-based data is also needed, “TomTom is in the pole position to profit from that additional growth.”