qr code from opencaching.com

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?




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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