Wejo Group Limited (NASDAQ:WEJO) completes a $15.9 million PIPE investment.
What Happened? Wejo, a leader in Smart Mobility cloud and software solutions for connected, electric, and autonomous vehicle data, completed a self-arranged $15.9 million private investment in public equity (PIPE) investment in Wejo, anchored by Sompo International Holdings Ltd.
Sompo is one of its major commercial partners, current investors, and certain members of Wejo’s Board.
Under the PIPE, Wejo agreed to issue and sell in a private placement worth 11.3 million of its units, each consisting of one share and one-third of one warrant per unit purchased.
Why Does It Matter? The additional liquidity raised through this initiative and Wejo’s significant expense reduction initiatives and further drawdowns on its existing debt and equity facilities will extend Wejo’s capital runway through late 2023 under current capital market conditions.
Wejo’s cost-saving initiatives implemented in 2022 reduce its cash burn from $10 million per month at the start of 2022 to a projected $5-6 million per month by the fourth quarter of 2022.
Now Wejo expects its 2022 Adjusted EBITDA loss to be in the range of $85 million - $95 million for 2022, a significant improvement versus previous expectations in the range of $110 million - $120 million.
Wejo remains committed to achieving its revenue and vehicles on platform objectives for 2022.
Founder and CEO Richard Barlow said, “Sompo recognizes 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.”
CFO John Maxwell said: “ 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.”
Price Action: WEJO shares closed higher by 4.96% at $1.27 on Wednesday.