QR code from opencaching.com
If the folks at Garmin are smart they will buy munzee.com. Why would Garmin buy a smart phone game? To start with, the new generation of Garmin GPS receivers with built in cameras already support QR codes. Once it’s supported in hardware telling the device what to do when it scans the code is just a firmware upgrade away.
Last month I posted some stats indicating that munzee has crushed opencaching.com based on the number of placements in Waterloo. munzee has definitely seen aggressive growth world-wide in the last year and Opencaching has not. There is already a greater than 90% overlap between geocachers and munzers. If Garmin is going to continue to pump money in to Opencaching they are going to have to increase growth.
So what would it cost to buy munzee? Only the four founders at munzee can answer that one but I have some guesses. Aaron Benzick at munzee reported that they have 50,000 members world-wide. If we assume 20% of them are paying the premium membership fee of $30/year. That works out to about $360,000/year in revenue. Add in sales of supplies and average that out at $2/placement for a total of about $340,000 in the last year. In total that’s about $700,000 in revenue. I suspect that’s a bit high so let’s say it’s $500,000 with a profit margin of 30% or $150,000. These numbers are based on conjecture. Only the founders of munzee know for sure. With an annualized profit of $150,000 and a valuation of four times profit the value of munzee.com today might be something like $600,000. My guess is that this is less than what Garmin has spent developing opencaching.com.
For argument’s sake let’s assume the cost to acquire munzee is the $600k I’ve worked out above. I have to believe that if Garmin is truly serious about making a go of Opencaching.com then a price of $600,000 to acquire 50,000 members and 172k placements. Based on these numbers that’s a cost of acquisition of only $12/user. These numbers sound quite reasonable to me. The founders at munzee.com might have different ideas of valuation.
I asked Aaron Benzick to comment on this post. He neither confirmed nor disputed the assumptions I made. I take that to mean that at least some of those assumptions are on the high side. According to Benzick “Despite trying new ideas, Groundspeak hasn’t been able to latch on to ‘the next big thing’ and munzee has been able to create a whole platform that disrupts the adventure hunting scene with fresh ideas …” I take it from that comment that the folks at munzee see themselves as leaders in the space. Forward thinking leadership would be another reason for Garmin to acquire munzee.com.
A similar argument could be made for Geocaching.com to buy munzee.com. Both companies have smart phone applications. Most munzers are already geocachers. Could geocaching.com afford to buy munzee.com is the question? Garmin certainly has deeper pockets but having cash doesn’t inherently make you smart.
What do you think will happen?
teamvoyagr
I have been writing the cachemania blog since 2008. I'm interested in the development of geocaching and the many ways that people play the game.
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10 Comments until now
I have to say, I’m not keen on the idea of Groundspeak’s management style being applied to Munzee.com ….
I can see initiatives going on near permanent hiatus in that situation.
I agree that it would be smart for a corporation such as Garmin or Groundspeak to acquire Munzee, especially now while they’re still ramping up.
However, I think that such an acquisition would be a disaster for players. The founders are full of fresh new ideas and keep on improving the game. This is their baby and they’re keen. While there are still improvements to be made, the owners are listening and responding to their customers relatively quickly.
I would bet that stagnation would rapidly set in with Garmin or Groundspeak at the helm. Can you imagine Groundspeak implementing a review process for munzee? Yikes!
As for Garmin, they try to streamline processes so that different GPS receivers use similar software, often with less than great results. I can imagine them trying to combine Munzee with Opencaching, which would ruin Munzee.
I hope that the founders of Munzee carry on with what they’ve been doing on their own, and keep bringing us innovative additions to the game…so far, so good!
Given that Munzee is heavily a Smartphone game (you capture the Munzee with the smartphone camera and data connection) what is the attraction for Garmin, who would mostly want to focus on selling their GPS receivers? Even with those receivers that take pictures, it seems it would be extremely clunky to use it for capturing a Munzee.
more likely that groundspeak will – Garmin would need to integrate data-plans and cellular transmitters into their hardware before a GPS receiver would be able to do something like that. Groundspeak is a better candidate, but I don’t think they will do it.
I would be very surprised if Munzee has anywhere near 20% premium members. Most of their 50k members are people who tried the game once or twice and moved on (like me).
So, this is nothing but wild speculation on the authors behalf???
The title of this article is 100% misleading bordering on a total untruth. Has Munzee or Garmin even hinted at this happening????
I don’t think there’s any benefit for erither Garmin or Groundspeak to aquire them, nor do I think they will. There are no synergies that would benefit either company.
You are correct that this post is speculation another word for it is a prediction. I think the post lays out a couple of synergies between the organizations. Not everyone would be happy if munzee.com was purchased by either of those companies but it is a possibility.
Interesting thoughts but not likely I think. Id probably place Munzee PM-ship at <5% of total users firstly. Secondly I dont think either GS or Garmin would be interested in a purchase as Munzee is not direct competition for GS (with most Munzers being GC.com cachers already) and while perhaps more attractive to Garmin the whole hardware point above covers that. Also, I doubt the Munzee boys would sell. I hope by now they are making a profit for themselves and their hard work but I think their baby would be worth more to them than either company would be willing to pay.
What if Garmin just bought them and kept their current employees and ideas part of Munzee and not Garmin? They could keep the owners employed with big guaranteed salaries for the next 10 years? Maybe someday Garmin GPSr’s will have some sort of NFC (Near Field communication) that can read cheap tags like RFID’s. The you could have a wherigo type game played with munzee’s. That would bring the adventure back into the sport.
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