Articles From: Heptagon Capital
Website: Heptagon Capital


Equity Fund Manager

Heptagon Capital

Imagine standing in the Pinkawillinie Conservation Park in South Australia – sadly not the location from where this Blog is being written – and you wanted to inform someone of your exact location. How would you do it? Maps are often imperfect, GPS coordinates too cumbersome. However, the genius of what3words lies in its simplicity, as well as its accuracy. Just three words (exciting.times.ahead, in the case of being in Pinkawillinie) provide anyone anywhere with exact coordinates. The business has divided the world into three-by-three metre squares, each with its unique combination of three words.

We first profiled the business in December 2022, but caught up with senior management last week for a progress update. Use cases for the what3words proposition should be evident. One study has shown that using what3words addresses, as opposed to more conventional directions, allows for 42% faster delivery times for couriers. No surprise then that delivery businesses such as DHL, EVRi, DPD and Yodel all deploy the service in the UK.

The what3words proposition naturally has implications for future trends such as e-commerce and logistics, both of which we see growing in prominence in the increasingly online economy. Saving lives more swiftly in emergencies is clearly beneficial too. what3words sees its technology as “single source”, hard to replicate given that the business has been building its proprietary word lists for over a decade. AI is a game-changer for many industries, but it currently struggles to exercise the judgement of a human when considering words that are homophones (sounding the same but spelt differently) as well as those that might be considered offensive. Accuracy matters. what3words is available not only in English, but 60 other languages. 

The biggest challenge for what3words is how to gain sufficient scale and acceptance, both on the part of consumers and businesses. We were told that with each new marque client signed up (such as delivery services, or notably, the emergency services in the UK), the process apparently becomes easier. Based on conversations with a number of potential businesses still to be converted, management is of the view “people have come to expect it [the presence of a what3words address].” Further adoption, therefore, is – in three words – “when, not if.”

Originally Posted January 30, 2024 – exciting.times.ahead

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. The author of this piece has a personal direct investment in what3words. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.

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The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document.

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