Insurer Sompo International Holdings has anchored Wejo’s self-arranged $15.9m private investment in public equity (PIPE) investment in the latter, according to an announcement.
According to Richard Barlow, founder and CEO of Wejo – a British connected vehicle data start-up -, Sompo’s new investment will help the company continue to advance its 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 realise cost synergies and additional revenue opportunities”, said Barlow.
Under the PIPE, Wejo has agreed to issue and sell in a private placement an aggregate of approximately 11.3 million of the company’s units, each consisting of one of the company’s common shares and one third of one warrant per unit purchased.
The additional liquidity raised through this initiative, combined with Wejo’s expense reduction initiatives, and with further draw downs on the company’s existing debt and equity facilities, is intended to extend Wejo’s capital runway through late 2023 under current capital market conditions.
Wejo implemented its cost saving initiatives in 2022, according to the company, they reduce cash burn from $10m per month at the start of 2022 to a projected $5-6m per month by the fourth quarter of 2022.
According to the announcement, as a result of these reduced expenses, Wejo is updating its 2022 financial outlook with respect to Adjusted EBITDA, which is now expected to be in the range of $85m to $95m for 2022.
Japanese insurer Sompo is one of Wejo’s major commercial partners, and was joined in this recent investment by current Wejo investors and certain members of the companies Board of Directors.
John Maxwell, Chief Financial Officer, said:commented“To work through these challenging times in the capital markets, we have taken measurable actions to accelerate our path to profitability, prioritising 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 prioritised 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.”
