Auto data startup Wejo in talks with Virtuoso on SPAC merger -sources
21/05/2021 20:44
By Ben Klayman and Anirban Sen
May 21 (Reuters) - Wejo is in talks to go public through a
reverse merger with blank-check company Virtuoso Acquisition
Corp VOSO.O in a deal that would value the British connected
car data start-up at more than $1 billion, two people familiar
with the matter said.
The deal has not closed and terms could still change,
according to the sources, who asked not to be identified.
The sides also have not closed a deal to raise funding from
investors to support the deal, the sources said. This type of
funding, which is referred to as Private Investment in Public
Equity (PIPE), is typically crucial to complete an acquisition
by a special-purpose acquisition company, or SPAC.
Officials with Virtuoso and Wejo, which is backed by General
Motors Co GM.N , could not immediately be reached to comment.
Bloomberg earlier reported Virtuoso's involvement.
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 IPO to enter public
markets.
The valuation would be a step down from the more than $2
billion that sources told Reuters in March the company 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.
Wejo organizes data from about 15 million connected vehicles
for such clients as GM, Hyundai Motor Co 005380.KS and Daimler
DAIGn.DE , and companies can use the data to develop apps and
services for fleets, smart cities and individual consumers.
Wejo is being advised by Citigroup and is led by Chief
Executive and founder Richard Barlow.
Founded in 2014, Wejo has raised $157 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.
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 in Detroit and Anirban Sen in
Bengaluru)
((benjamin.klayman@thomsonreuters.com; 313-600-2277; Reuters
Messaging: benjamin.klayman.thomsonreuters.com@reuters.net))