Wejo raises $16m amid cost saving measures
Wejo Group, the Manchester-based connected vehicle data company, has raised nearly $16m to reduce ‘cash burn.’
The tech firm, which is backed by General Motors and listed on the Nasdaq last year, said it has also implemented a hiring freeze and eliminated non-revenue projects as part of cost-saving measures.
The self-arranged private investment in public equity, or PIPE, was anchored by one of its major commercial partners, Sompo International Holdings, as well as some of its own board of directors.
Under the terms of the PIPE, Wejo has agreed to issue and sell in a private placement approximately 11.3m shares.
Wejo’s cost saving initiatives implemented in 2022 to reduce its ‘cash burn’ from $10m per month at the start of the year to a projected $5-6m per month by Q4 2022.
As a result of these reduced expenses, Wejo is updating its 2022 financial outlook and now expects its 2022 Adjusted EBITDA loss to be in the range of $85m to $95m for 2022, compared to previous expectations in the range of $110m to $120m.
Richard Barlow, Wejo Founder and CEO, said: “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.
“Sompo recognises 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.”
John Maxwell, Chief Financial Officer, added: “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 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.
“We will continue to pursue additional cost reduction initiatives, which will help us get to profitability sooner.”
