Waze: Product Evolution and Fundraising

By Jonathan Levav, Jason Luther
2014 | Case No. E500
Waze successfully developed a free smartphone mapping application that gave consumers turn-by-turn directions and real-time traffic data. This digital map compiled driver-generated data from Waze’s community of users to relay constantly updated information on conditions such as traffic accidents, speeding-camera locations, and construction zones. By October 2012, Waze had captured 10 percent of the U.S. iOS mapping market and had grown to serve over 28 million users, with an expectation of reaching 100 million “Wazers” by 2015. Noam Bardin, Waze’s CEO, recognized the company’s emergence as a leader in its space and understood that a fresh capital injection would be needed to lead it through the next stage of development. Waze’s previous fundraising attempts had been fraught with challenges. In October 2009, just one day before Bardin anticipated accepting a Series B term sheet, Google released Google Maps Navigation. Investors felt Waze would eventually be pushed out of the market by what would now be considered the industry’s 800-pound gorilla and rescinded their offers for funding. But now, in 2012, Waze’s strong market position enabled Bardin to negotiate with potential investors from a position of strength. In December 2012, Bardin secured a $100 million Series D round of financing at a $700 million pre-money valuation. Prior to finalizing the terms of the agreement, however, the CEO hesitated. With the draft term sheet before him, Bardin thought, “Have I exhaustively evaluated all of the changes that might ensue by taking this money?”
This material is available for download by current Stanford GSB students, faculty, and staff only. For inquires, contact the Case Writing Office. Download