August 8, 2022

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Wejo, which collects and analyzes real-time vehicle data, is going public via a SPAC merger to raise $330M, which will value Wejo at $800M including debt (Wejo Spac 330m Wejo)

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Wejo Spac 330m Wejo: Here’s the way these things usually work: you try a new app, it gives you 10 million users but ultimately fails because it’s not good enough. So then, someone figures out what went wrong, and they make a better app with smarter algorithms before they file for bankruptcy and start all over again. That’s how it goes.

Well, Wejo didn’t make the app. Wejo made the algorithms behind the app. This is the kind of company that you don’t get to see very often. It is a software-engineering group that has created an algorithm that is licensed out to automotive companies, who then use it to fuse with their own OEM data and sell it back to other companies and advertisers.

Wejo is combining forces with “SPAC,” a digital-investment firm that has made it a point of investing in companies that are using technology to protect data. On Wednesday, they announced they will merge Wejo and SPAC to create a new company called “Spac Wejo” that will raise $330 million in an IPO.

That’s right, the IPO price is set at $7 per share. But since SPAC loses its investment more than half of the time, it will still be valued at a hefty $800 million dollars. That’s actually higher than Wejo was valued at when it was independent.

But you still have to remember that Wejo is, in fact, having to raise money from a public company. It has raised $259 million since May 2011, but it’s still sitting on a pile of debt, which says something about their business model. This is their first attempt at going public through the SPAC merger and raising significant capital.

The money will help Wejo expand its algorithms and reach more OEMs. Some of the money will also be used to pay back the $30 million in debt that still sits on the company. That’s probably a smart move, considering it only has $1 million in cash.

Wejo is a great example of how much value is created from an algorithm. As more data becomes available and as algorithms become smarter and respond to consumer demands, that value will keep rising.