Wejo to go public; deal values auto data startup at $800 mln -sources
28/05/2021 20:48
By Ben Klayman and Paul Lienert
DETROIT, May 28 (Reuters) - Auto data startup Wejo on Friday
will announce plans to go public through a reverse merger with
blank-check company Virtuoso Acquisition Corp VOSO.O in a deal
that values the British company at $800 million including debt,
people familiar with the plans said.
The deal, to be announced after the stock market closes,
will raise $330 million in proceeds for Wejo, said the sources,
who asked not to be identified. They said that includes $230
million from Special-Purpose Acquisition Company (SPAC) Virtuoso
and another $100 million referred to as Private Investment in
Public Equity (PIPE).
An additional $25 million could be raised within the next
month as talks continue with other potential investors, the
sources said.
Investors in the PIPE include No. 1 U.S. automaker General
Motors Co GM.N , which previously invested in Wejo, as well as
data management company Palantir Technologies Inc PLTR.N , which
billionaire Peter Thiel co-founded, the sources said.
The $800 million enterprise value for Wejo implies an
estimated $1.1 billion pro forma equity value, the sources said.
Wejo and Virtuoso declined to comment.
The merger with Virtuoso is expected to close in the second
half of the year, the sources said. The new company will trade
under the symbol "WEJO" but the stock exchange has not been
determined, the sources said. Reuters had previously said Wejo
and Virtuoso were in talks. urn:newsml:reuters.com:*:nL2N2N825Q
SPACs are shell companies that raise funds to acquire a
private company with the purpose of taking it public, allowing
such targets to sidestep a traditional initial public offering
(IPO) to enter public markets.
Wejo is led by Chief Executive and founder Richard Barlow
and Chairman Tim Lee, a former GM executive. Virtuoso's CEO is
Jeffrey Warshaw.
The valuation is down from the more than $2 billion that
sources told Reuters in March Wejo had hoped to achieve.
urn:newsml:reuters.com:*:nL1N2KO2F0
The SPAC market has cooled off recently amid fears of frothy
valuations and last month the SEC suggested warrants issued by
SPACs should be accounted for as liabilities instead of equity
instruments. urn:newsml:reuters.com:*:nL4N2M6021
Manchester-based Wejo organizes data from almost 11 million
vehicles connected to the Internet through embedded modems for
such clients as GM, Hyundai Motor Co 005380.KS and
Daimler DAIGn.DE .
Automakers can use the data generated from that connection
to develop apps and services for fleets, smart cities and
individual consumers, including advertising, fleet management,
insurance, remote diagnostics, roadside assistance, parking
availability and traffic information.
Founded in 2014, Wejo, which stands for "we journey," has
raised almost $200 million according to PitchBook from such
investors as GM, which acquired a significant stake in 2019,
German auto supplier Hella HLE.DE , DIP Capital and the British
government.
Wejo estimates that by 2030, the connected vehicle data
market will be worth $500 billion, creating an opportunity for
revenue streams and more services for automakers and their
customers, as well as greater efficiency for companies in
product development. Wejo's technology platform, ADEPT, allows
automakers to organize the data collected in those vehicles.
On Feb. 1, Wejo's Israeli rival Otonomo said it would go
public in a SPAC merger with Software Acquisition Group Inc II.
SAII.O urn:newsml:reuters.com:*:nL4N2K73AI
(Reporting by Ben Klayman and Paul Lienert in Detroit; Editing
by David Gregorio)
((benjamin.klayman@thomsonreuters.com; 313-600-2277; Reuters
Messaging: benjamin.klayman.thomsonreuters.com@reuters.net))