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This week Australia-based Appen announced a disappointing quarter, as many of its customers grapple with global privacy changes, causing a redirection of spend away from advertising to projects that include geolocation information.
In an effort to shift the business toward these new areas of spend on its earnings call, Appen announced it had signed a definitive agreement to purchase Singapore-based, mobile location provider Quadrant for an immediate cash payment of $25M, followed up $20M in Appen stock, based on future revenue targets.
The deal is all about the value of data and artificial intelligence.
Financials overshadow Quadrant’s potential
Much of the media focused on the financials, given that the revenue slide and drop in profits overshadowed an interesting acquisition with the potential to transform Appen and its customers businesses.
Appen collects, curates and clean data sets to businesses, primarily in the tech industry, that want to implement artificial intelligence and machine learning-based projects. The company focuses on images, text, speech, audio and video data.
It’s important to understand Appen’s differentiator. There are lots of sources of data, but Appen goes through the hard work of annotating, labelling, and cleaning the data by leveraging a crowd of over one million contributors. This ensures the data is of the highest quality, which is important with AI/ML.
There’s an axiom in data sciences that states good data leads to good insights but bad data leads to bad insights – so the clean data set ensures Appen customers can have confidence in their AI/ML projects.
Quadrant expands Appen’s addressable market as it brings mobile location and point of interest (POI) data into its portfolio. Quadrant’s approach to data is similar to Appen as its Geolancer methodology is based on manual verification. The company’s Geolancers are equipped with a smartphone running its proprietary app, which enables them to manually verify and add data points, such as stores, restaurants, and others, ensuring accuracy.
The combination of Geolancer and Appen’s current massive data sets creates some interesting scenarios as Appen customers can bring in the element of location to its customers AI/ML projects.
Mobile is the next big frontier in AI / ML
To understand the market potential, let’s look at an example. Say a retailer that owns several brands could push a mobile coupon to a customer on one side of a mall and another on the other side, as it will know the exact location of the person and that points of interest are around. Or, a city could send safety messages to citizens based on their location warning them of potential hazards.
The world is changing faster than ever, and businesses need the location data to understand what those changes are, and mobile data is a big part of that. Extending the axiom mentioned previously, partial data leads to partial insights. The inclusion of Quadrant’s mobile information will enable Appen customers to discover different information and act on it based on location.
It used to be said that every company needs to be a technology company, and that is now a given. Today, every business needs to be an AI / ML company, but that required more than hardened algorithms and data scientists. Success with AI / ML requires a broad set of high quality data, and the combination of Appen and Quadrant enables organizations to bring in highly lucrative mobile data.