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Wausau start up secures $560K for GPS maps

Wausau, Wis. - U.S. Trailmaps, Inc., a software developer for off-road mapping applications, closed its second round of equity financing this week in a deal with Kegonsa Capital Partners that values the start-up company at $1 million.

Trailmaps will receive $560,000 in funds that will enable it to furhter develop its menu of interactive recreational trail maps for snowmobiles and all-terrain vehicles - maps that are designed to interface with global positioning devices and personal computers.

The company offers digital maps of Wisconsin and Michigan's Upper Peninsula and will roll out applications covering the New England, Mid-Atlantic, and Midwest regions later this month. The downloadable maps detail over 100,000 miles of trails and nearly 250,000 parking areas, restaurants, gas stations, and other businesses along the trails.

Financing GPS maps

In the deal, which investor Ken Johnson called "very reasonable," Kegonsa Capital Partners acquired 40 percent of the company for $400,000. Trailmaps will use those funds to cover marketing, salaries, license fees, and other expenses.
The contract marks the first venture funding Trailmaps has won since closing a $160,000 angel financing round in July with the Central Wisconsin Business Angels, an investor-member of the Wisconsin Angel Network.

Johnson, general partner at Kegonsa, said he was eager to barter the agreement because Trailmaps is already generating revenue, possesses promising intellectual property, and boasts strong start-up management experience.

Trailmaps also is pursuing a $600 million recreational vehicle market with potential for entry into hiking, camping, hunting, fishing, and other evolving markets, including mobile telephony.

"We believe that in the next few years, the differentiating characteristics among cellular telephones will not be the accessories they offer, but the content they provide," Johnson explained. "All cellular phones will have cameras, the ability to connect to the Internet, color screens, and GPS, so the buyer will buy the product based on the content it offers them.

"Our expectation is that cellular telephone companies will buy their trail mapping content from U.S. Trailmaps," he said.

Merging technology and wilderness

Trailmaps partner Eric Antonson, a truck mechanic by trade, owned a truck dealership in Wausau when he met his future business partner and current Trailmaps president, entrepreneurial software engineer Dean Forss. After moving into the neighborhood, Forss developed a fast friendship with Antonson around off-road sports like snowmobiling, hunting, and fishing.

Together they noticed that upon leaving paved roadways, their GPS units encountered a dearth of geographical information - no reference points, no trails, no data.

"Being a technology guy, Dean would always ask the question, `Why does nobody offer this?' The technology has been there for years," Antonson said.

As the questions gave way to ideas and culminated in a serious business plan, Antonson and Forss began looking to fill their knowledge gap. That's when Mark Voss, then an office engineering equipment salesman who knew Forss from church, stepped in.

Voss caught wind of the plan, agreed to contribute his extensive sales and marketing background, and in January 2005 the team launched Trailmaps.

Cheryl Gain, a technology development specialist with the Bureau of Entrepreneurship at the Wisconsin Department of Commerce, pointed out avenues for securing start-up investments, and Dr. Keith Rice, professor of geography and geology at the University of Wisconsin-Stevens Point, contributed additional logistical support.

Today, Antonson, Forss, and Voss employ a geography manager, one full-time geographer, a part-time geographer who is also a full-time student at UW-Stevens Point, and three interns, also from UW-Stevens Point.

Moving forward

"The main goal right now is to generate sales over the next 18 months on our software platform and promote it around the country," Antonson said.

Trailmaps is being constructed as a data provider and licensing operation, leaving commercial products to the companies that are better equipped to market them, Antonson said.

The primary method for generating proprietary digital maps has been by gathering map information from state and county agencies and clubs, scanning and extracting the data, geo-referencing the flat maps to fit the contours of the earth, entering that information into a database, and attaching dozens of attributes to each trail system.

"Updating the information seamlessly was about 90 percent of the work," Antonson said.

Making trails has already opened the door to other GPS mapping opportunities. Antonson and company are strategizing on a data sales arrangement with Steve and Darin Novak, founders of the Web-based lake mapping company, Lake-Link, to provide downloadable maps of lake contours and other features.

"Basically it looks like we have good relationship going with them," Antonson said.

Trailmaps is also mapping parks. By offering a mapping service that is 25 to 30 percent less expensive than services offered by other cartography firms or engineering firms, Trailmaps can capture hiking and biking trail data for use in its own applications.

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