The CEO of collapsed Manchester vehicle data firm Wejo sought to attract a last ditch $7m in new investment from shareholders, in order to release a similar sum and potentially more from tech giant Google, in the final days before the company announced its intention to enter administration last year.
An email sent to shareholders by Wejo founder and CEO Richard Barlow, dated late May and seen by Prolific North, stated:
“We’ll be releasing our 10Q shortly: Guidance of $20m to $30m will be maintained; and 50% growth between Q1/22 and Q1/23 while reducing costs by 65%
We now have an offer of a $100m senior secured IP loan facility (DD completed). The IP valuation supports the LTV and expect to complete in 4 weeks (see attached)
Meanwhile in terms of equity we have agreements in escrow with Google for $20m. The first $7m is available for immediate drawdown immediately IF I secure $7M from elsewhere – I’m still looking for parties who will join Google.”
Wejo’s full-year 2022 results, published on April 3, had already showed revenue increased YoY from $2.5m to $8.3m as well as some success at reducing costs, with cash burn reduced by around 40% to $6m a month.
By the time it filed its Q1 2023 10Q with the US SEC on May 22, however, its monthly cash burn had returned to around the $10m mark. Wejo Limited made its first notice of intention to appoint administrators eight days later on May 30 and ultimately entered administration in early July, having filed a further two notices while company bosses sought new investment or a rescue package. September’s administrator’s report revealed debts of almost $105m at the company.
The email added that the proposed Google deal could release up $30m in total financing, at an interest rate of 10% PA, due to mature on December 31, 2023. It would also include a mandatory PIPE conversion at whichever rate was the lesser of Nasdaq minimum price (at closing) plus 12.5 cents per warrant, or 80% of the price agreed in the PIPE.
One Wejo shareholder who received the email, and who spoke to Prolific North on condition of anonymity, said he was informed that Wejo’s CEO and other directors had already personally written seven-figure cheques to facilitate the deal, with further investment from other parties still required to make the required figure, but that Google ultimately walked away as the tech giant felt it would be “inappropriate” to be writing cheques at a time when it was making significant layoffs globally.
Prolific North has attempted to contact Richard Barlow for comment, however his previously registered mobile appears to have been disconnected.
