Wejo to go public, deal values auto data startup at $800 mln (updated)
28/05/2021 21:45
(New throughout, adds confirmation, comments from companies
involved)
By Ben Klayman and Paul Lienert
DETROIT, May 28 (Reuters) - Auto data startup Wejo, backed
by General Motors Co GM.N , will 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, the companies said on Friday.
The deal will raise $330 million in proceeds for Wejo, the
companies 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).
Wejo Chief Executive and founder Richard Barlow said
institutional investors make up most of the PIPE, but declined
to identify the firms involved. An additional $25 million could
be raised within the next month as talks continue with other
potential investors, he said.
Investors in the PIPE include No. 1 U.S. automaker GM, which
previously invested in Wejo, as well as data management company
Palantir Technologies Inc PLTR.N , which billionaire Peter Thiel
co-founded, Wejo and Virtuoso said. The sizes of their
investments or stakes were not disclosed.
The $800 million enterprise value for Wejo implies an
estimated $1.1 billion pro forma equity value.
"The future is data and this is a company that's sitting
there right in the middle of this incredible wave of data that's
coming," Virtuoso CEO Jeffrey Warshaw said in an interview. "All
this opportunity to monetize it, it's almost limitless."
The merger with Virtuoso is expected to close in the second
half of the year, the companies said. The new company will trade
under the symbol "WEJO" but the stock exchange has not been
determined. 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.
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.
"Getting the data-software piece right is going to be
critical for making the next best product," Palantir global head
of business development Kevin Kawasaki said.
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))