Indoor Positioning Systems, a Fluxus Ventures Review

The use of GPS and GPS-based applications is widespread, and the lack of such a service indoors can be an annoyance. The concept and supporting technology of indoor positioning is gaining recognition as GPS-based outdoor positioning applications become increasingly widespread in everyday life. One could say that people began thinking about indoor positioning immediately after seeing the value of outdoor positioning applications.

Fluxus Ventures has been tracking the progress of indoor positioning systems (IPS) for some time as part of its focus on data analytics and sensor networks. We define IPS as a way to navigate, locate, and track objects indoors and classify IPS into two broad categories based on activity.

It is important to note that the technologies listed above are the most commonly used IPS technologies today. There are other known technologies that can be used to establish an indoor positioning system, such as: infrared, laser, ultra-wideband, sound, etc. However, their use is not as widespread due to cost and complexity.

Accuracy and scalability varies between technologies. Accuracy is mostly a function of the technology used, infrastructure, and, in some cases, the quality of components in a user device. Sub-metre accuracy is achievable at a significant cost, but the typical accuracy of widespread systems is between 1-10 metres. Scalability is determined by the technology used and accuracy needed. Different technologies have different infrastructure requirements (number of sensors, amount of cabling) and procedures to achieve a certain degree of accuracy. Some technologies use fingerprinting (recording of signals at various locations in a space) at initial deployment, and a smaller subset require periodic fingerprinting to achieve the desired accuracy. These represent the complexity of deployment, and affect scalability.

At Fluxus Ventures, we are excited by technology not only for the technology itself but primarily for its application and what it enables. The specific application of an IPS determines which technology should be used and what accuracy is needed. These are determinants of scalability and cost. The application also drives the value of the system (technology and infrastructure) not only from what it enables users to do but, in certain applications, from the benefit users can reap from other users (network effect).

That said, there are a number of popular IPS applications. The list of applications includes:

  • Navigation: providing users with the capability to locate and orient their positions indoors and to set a course to reach a certain area.
  • Location-based advertisement: pushing specific advertisement to users based on their current location.
  • Location-based services: providing users with information or services associated with a certain location (i.e. pushing information on an exhibit in museums or art galleries).
  • Analytics: analysing location and movement data for actionable insights.
  • Workforce management: tracking staff to increase efficiency or effectiveness of business processes.
  • Security management: tracking people and/or objects to detect unauthorised access.

We have not seen any IPS-based companies dominating these billion dollars’ worth areas of applications. We blame this lack of success on the non-existence of a holy-grail technology with a high degree of flexibility, scalability and accuracy at a relatively low-cost. Furthermore, a lack of focus on a specific application and slow market adoption have also contributed to the absence of domination. We look to RetailNext as an example of a promising company using IPS for retail analytics. Although still fighting market inertia, RetailNext has shown enough value to close a USD 125 million Series E round in 2015 (Chapman, 2015). It has managed to find and focus on a specific and highly valued IPS application for retail analytics.

Fluxus aims to fight market inertia alongside RetailNext and other IPS-based companies. We have invested in Locarise, an IPS-based analytics company that enables shopping centres and retailers to make data driven decisions. We are working closely with Locarise, providing board-level mentorship and contributing our real estate expertise to accelerate its growth. We do this because we believe that IPS applications can address challenges in real estate and urban infrastructure.

 

References

(2015). Retrieved from Locarise Corporate Web site: http://www.locarise.com/

(2016). Retrieved from RetailNext Corporate Web site: http://retailnext.net/

Chapman, L. (2015, April 15). RetailNext Bags $125 Million for International Expansion, Acquisitions. Retrieved from The Wall Street Journal: http://blogs.wsj.com/venturecapital/2015/04/15/retailnext-bags-125-million-for-international-expansion-acquisitions/

Dahlgren, E., & Mahmood, H. (2014, June). Evaluation of indoor positioning based on Bluetooth Smart technology. Göteborg, Sweden: Chalmers University of Technology.

Levine, B. (1025, April 15). RetailNext scores a whopping $125M to turn stores into data systems. Retrieved from VentureBeat: http://venturebeat.com/2015/04/15/retailnext-scores-a-whopping-125m-to-turn-stores-into-data-systems/

Mautz, R. (2012, February). Indoor Positioning Technologies. Zürich, Switzerland: ETH Zurich.