Not many of us want everybody to know our destinations, but Life360 has been in the business of selling precise user location data. The company is now doing an about-turn and will desist from the practice, although not completely.
Life360 is a service that helps its users track their family and friends that also use the app. While there are practical benefits to this kind of solution, there is much room for abuse as location data can be sensitive info but is a much sought-after commodity.
While Life360 provided helpful service, a report identified it as a source of location data to intermediaries that resell them. In fact, the report nailed Life360 as one of the largest sources of personal location data.
Meanwhile, the CEO of Life360, Chris Hulls, did not deny selling data but claimed their operation was minuscule given the scale of their platform. Life360 has about 30 million users. However, he admitted that his company earned about $16 million from the sale of data in 2020. The company also earned $6 million from its collaboration with Allstate Arity.
Life360 has not reported sales figures for 2021 but has claimed its revenue grew by 42 percent year-on-year.
Life360 has decided to scale back its user data business by selling to only two brokers. This naturally includes Allstate Arity, which likely accounted for the most significant single share of its sales, and Placer.ai. Previously, Life360 was busy selling to more than a dozen clients.
However, Life360 has claimed the move is part of a larger plan to exit the traditional data broker business and focus now on aggregated analytics that will provide retailers better understanding of their customer behavior.
Here is an excerpt from its latest quarterly report:
“With this agreement, Placer.ai will provide critical data insights and analytics services to Life360, which will enhance the product experience for our users. As part of this partnership, Placer will have the right to commercialise solely aggregated data related to places visits during the term of the agreement. We have begun terminating our relationships with all other location data partners with the exception of Allstate/Arity, which will continue.
Life360 recognizes that aggregated data analytics (for example, 150 people drove by the supermarket) is the wave of the future and that businesses will increasingly place a premium on data insights that do not rely on device-level or other individual user-level identifiers. As a result, we believe this partnership will enable us to spend less time navigating the rapidly evolving regulatory and platform environment, while simultaneously reducing business risk.
This agreement includes a minimum revenue guarantee based on the size of Life360’s active user base, which we expect will preserve revenue in line with CY21 results for the duration of the three-year agreement. Life360 will also be receiving a 10 year warrant exercisable to purchase up to US$25m in Placer.ai, which recently completed a US$100m capital raise. The agreement also expressly excludes
Tile and Jiobit device data to underscore our clear message that data from Tile and Jiobit devices is not, and will never be, sold or monetized.”
Meanwhile, Life360 is aware that brokers that it will no longer do business with can sell to the government, but Hulls says a written contract prevents such resale.