© Reuters. FILE PHOTO: Rush hour traffic moves north and south on Interstate 5 near Encinitas, California, the United States on October 24, 2018. REUTERS / Mike Blake
By Ben Klayman and Paul Lienert
DETROIT (Reuters) – Auto data startup Wejo will announce plans to go public on Friday through a reverse merger with blank check firm Virtuoso Acquisition Corp, which the British company estimates at $ 800 million including debt, said the plans familiar people.
The deal, due to be announced after the market closes, will bring Wejo $ 330 million in revenue, said sources, who refused to be named, said the sources. They said it includes $ 230 million from Virtuoso, a special-purpose acquisition company (SPAC), and another $ 100 million called private investment in public equity (PIPE).
Another $ 25 million could be raised within the next month as talks continue with other potential investors, the sources said.
Investors in PIPE include US automaker General Motors Co (NYSE 🙂 No. 1, which previously invested in Wejo, and data management company Palantir Technologies Inc, which billionaire Peter Thiel co-founded.
Wejo’s $ 800 million enterprise value implies an estimated pro forma equity value of $ 1.1 billion.
Wejo and Virtuoso declined to comment.
The merger with Virtuoso is expected to be completed in the second half of the year. The new company will trade under the symbol “WEJO”, but the stock exchange has not yet been determined, the sources said. Reuters had previously said that Wejo and Virtuoso were in talks.
SPACs are shell companies that raise funds to acquire a private company in order to go public so that such targets can bypass a traditional initial public offering (IPO) to enter public markets.
Wejo is led by Chief Executive and Founder Richard Barlow and Chairman Tim Lee, a former GM executive. The CEO of Virtuoso is Jeffrey Warshaw.
The valuation is below the more than $ 2 billion Reuters was hoping for from Wejo in March.
The SPAC market has cooled recently over fears of frothy valuations, and last month the SEC proposed accounting for warrants issued by SPACs as liabilities instead of equity instruments.
Manchester-based Wejo organizes data from nearly 11 million vehicles connected to the Internet via embedded modems for clients such as GM, Hyundai Motor Co and Daimler (OTC :).
Automakers can use the data generated from this 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.
Founded in 2014, Wejo, which stands for “We Journey,” has raised nearly $ 200 million from investors such as GM, which acquired a significant stake in 2019, German auto supplier Hella, DIP Capital and the UK government, according to PitchBook.
Wejo estimates that the connected vehicle data market will be valued at $ 500 billion by 2030, 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, enables automakers to organize the data collected in these vehicles.
On February 1, Wejo’s Israeli rival Otonomo announced that it would go public as part of a SPAC merger with Software Acquisition Group Inc II.