Manchester-headquartered, Nasdaq-listed vehicle data specialist Wejo has filed a notice of intention to enter administration with the US Securities and Exchange Commission.
The filing added that Wejo Ltd, a wholly owned subsidiary of Wejo Group, intends to appoint Andrew Poxon and Hilary Pascoe of Manchester’s Leonard Curtis Recovery as administrators.
Shares in Wejo dropped over 50 per cent, sliding from $0.22 to $0.10, on the announcement before slightly recovering to $0.12 at close of play Tuesday. The company added that it expects to receive a notice from Nasdaq that its common shares are “no longer suitable” to be listed, and that it would not appeal the decision, which it said would not affect its operations or business. The shares had previously hit a record high of $19.9 on November 18, 2021, although their highest valuation in 2023 was $0.71, achieved in late January.
Wejo successfully raised $15.9m private investment funding in July 2022, anchored by major commercial partner Sompo International Holdings as well as some of its own board of directors. The fundraise came as the company embarked on a bid to reduce cash burn of around $10m-a-month, including a hiring freeze and a focus on revenue generation.
In Q3 2022 the company reported new traffic intelligence contracts with the Departments of Transportation for the states of Texas, Georgia and Virginia and expanded its relationship with Ford to offer end-to-end insurance solutions in the United States. It also marked a 632 per cent year-on-year revenue growth from Q3 2021, although Q3 losses still totalled $31.5m.
Full-year 2022 results published on April 3 this year revealed increased revenue from $2.5m to $8.3m. Pre-tax losses went from $217.7m to $159.3m, and Adjusted EBITDA loss was $97.2 million “as a result of expansion into new markets, product development, and higher public company costs, partially offset by increased revenues.”
Chief financial officer John Maxwell said at the time: “We are making significant progress on our efforts to capitalize the business to reach our projected cash flow breakeven point. In addition to strong progress on our PIPE efforts with strategic investors, we are working to raise capital that will bridge us to these transactions.”
Maxwell further noted that Wejo had succesfully reduced monthly cash burn by 40 per cent from the start to the end of 2022, and planned a further 50 per cent reduction to get burn to under $3m by the end of 2023.
Wejo founder and CEO Richard Barlow added that the company expected revenues to continue growing in 2023 and that “with revenue projected to grow almost 200% at the mid-point of our guidance and additional cost reductions expected to improve our Adjusted EBITDA” the company would be able to “pull forward our cash-flow breakeven point to mid-2024.”
Wejo was founded in Manchester in 2014 and currently employs around 200 people from its ABC Building HQ. It is backed by US auto giant General Motors and floated on the Nasdaq in November 2021 following a reverse merger deal with Virtuoso Acquisition Corp which valued Wejo at $800m.
The company said that it is evaluating whether it will file ancillary insolvency proceedings for Wejo Group and its other subsidiaries in other jurisdictions, including in the United States, in due course.