Reuters, DETROIT General Motors Co. (GM.N)-backed auto data startup Wejo will reverse combine with blank-check provider Virtuoso Acquisition Corp. (VOSO.O) and go public, the companies announced on Friday. The transaction values the British company at $800 million, including debt.
According to the firms, Wejo would receive $330 million in revenues from the purchase. Included in that are $230 million from Virtuoso, a SPAC, and an additional $100 million known as private investment in public equity.
Richard Barlow, the creator and chief executive of Wejo, stated that institutional investors made up the majority of PIPE but refrained from naming the companies involved. As long as negotiations with further potential investors go well, he suggested, an extra $25 million might be raised within the next month.
The top U.S. manufacturer GM, which had previously invested in Wejo, and data management firm Palantir Technologies Inc.(PLTR.N), which billionaire Peter Thiel co-founded, are among the investors in the PIPE, according to Wejo and Virtuoso. Their holdings or investment amounts were not made public.
Wejo has an implied pro forma equity value of $1.1 billion based on its $800 million enterprise value.
According to Virtuoso CEO Jeffrey Warshaw, “the future is data, and this is a firm that’s sitting there right in the heart of this great flood of data that’s coming.” “There is virtually unlimited possibilities to commercialize it.”
According to the companies, the Virtuoso merger is anticipated to be completed in the second half of the year. The stock market has not yet been chosen, but the new business will trade under the ticker “WEJO.” Wejo and Virtuoso were reportedly in discussions, according to Reuters. View More
SPACs are front companies that raise money to buy private businesses with the intention of bringing them public, allowing their targets to bypass the usual initial public offering (IPO) process and instead access the public markets directly.
The valuation is lower than the more than $2 billion that Wejo had planned to acquire, sources told Reuters in March.
The SEC indicated last month that warrants issued by SPACs should be accounted for as liabilities rather than equity instruments, which has caused the SPAC market to chill recently amid concerns about inflated valuations. View More
For customers including General Motors, Hyundai Motor Co (005380.KS), and Daimler, Manchester-based Wejo manages data from over 11 million vehicles connected to the Internet through embedded modems.
To create apps and services for fleets, smart cities, and individual consumers, including advertising, fleet management, insurance, remote diagnostics, roadside assistance, parking availability, and traffic information, automakers can leverage the data created by that connection.
The next-best solution will depend on getting the data-software component right, according to Kevin Kawasaki, global head of business development at Palantir.
Wejo, which translates for “we travel,” was founded in 2014. According to PitchBook, Wejo has garnered approximately $200 million from investors including GM, who acquired a large share in the company in 2019.
According to Wejos, the connected car data industry will be worth $500 billion by 2030, opening up new revenue streams, expanded customer services, and improved product development efficiency for automakers and their clients. Automakers can arrange the data gathered in those vehicles using Wejo’s technological platform, ADEPT.
Wejo’s Israeli competitor Otonomo announced on February 1 that it would go public through a SPAC merger with Software Acquisition Group Inc II. Read on for more.