UK-based connected car data pioneer Wejo announced on Thursday that it has secured an additional $15.9M (approximately €15.5M) in Private Investment in Public Equity (PIPE).
Sompo Light Vortex, one of Wejo’s commercial partners, current investors, and members of Wejo’s Board of Directors participated in the round.
The announcement comes just three months after securing €88M in committed equity financing. Wejo went public in May last year through a reverse merger with black-check company Virtuoso Acquisition Corp. The deal valued the startup at around $800M.
The deal saw Wejo raise $330M, including $230M from SPAC Virtuoso, and another $100M referred to as Private Investment in Public Equity (PIPE).
“Under the PIPE, the company has agreed to issue and sell in a private placement an aggregate of approximately 11.3M of its units, each consisting of one of the company’s common shares and one-third of one warrant per unit purchased,” says the company.
With this move, Wejo intends to extend its capital runway through late 2023 under current capital market conditions.
Wejo implemented a cost-saving initiative this year to reduce cash burn from $10M per month to a projected $5-6M per month by Q4, 2022.
As a result of these reduced expenses, Wejo is updating its 2022 financial outlook with respect to Adjusted EBITDA. The company expects its 2022 Adjusted EBITDA loss to be in the range of $85M to $95M for 2022, which is a significant improvement compared to previous expectations of $110M to $120M.
John Maxwell, Chief Financial Officer of Wejo, says, “To work through these challenging times in the capital markets, we have taken measurable actions to accelerate our path to profitability, prioritizing growth in the marketplaces and SaaS offerings with the highest near-term revenue opportunities. Our long-term plans have not changed other than the timing of when other marketplaces will be launched. In addition to successfully raising additional capital through the PIPE offering, we have implemented a hiring freeze, eliminated non-revenue projects, and prioritized workflows to more squarely focus on revenue generation in the current year and into 2023. In addition, we will continue pursuing additional cost reduction initiatives, which will help us achieve profitability sooner.”
Wejo: What you need to know
Founded in 2014, Wejo is an auto startup that organizes data from almost 19M vehicles connected to the Internet using embedded modems. It works with automakers such as GM, Hyundai Motor Co, and Daimler, and they can use the data generated and organized by Wejo to develop apps and services for fleets.
The data can also be used to build apps and services for smart cities and individual consumers. The UK company also offers its services to companies in advertising, fleet management, insurance, remote diagnostics, roadside assistance, parking availability, and traffic information.
With the autonomous future on the horizon, the company sees an opportunity to turn connected vehicle data into revenue streams and offer more services to automakers and their customers.
“Executing a successful capital raise in this economic environment is a major achievement for Wejo and reflects our investors’, partners’, and directors’ confidence in the Company’s ability to improve business fundamentals as we focus our portfolio of solutions around the traffic and insurance product lines,” says Richard Barlow, Founder and CEO of Wejo.
He adds, “Sompo recognizes Wejo’s significant value proposition, and its new investment will help us continue to advance our Smart Mobility platform. Additionally, our continued commercial partnership will allow the Company to accelerate its entry into the Japanese market. Our proprietary platform and products aim to transform the end-to-end insurance market and help Sompo realize cost synergies and additional revenue opportunities.”
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