Manchester-headquartered connected vehicle data company Wejo, which is listed on the US Nasdaq, has filed a notice of intention to enter administration.
Wejo Ltd, an indirect, wholly-owned subsidiary of Wejo Group, is preparing to appoint Andrew Poxon and Hilary Pascoe of Leonard Curtis Recovery as administrators.
In a statement, the company added 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.
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The group added that it expects to receive a notice from the Nasdaq that its common shares are "no longer suitable" to be listed.
Wejo said it would not appeal that decision and expects its shares to be delisted. The group said the move would not affect its operations or business.
Ahead of it filing the notice of intent shares in Wejo had been trading at $0.22 but they have since been slashed to $0.10.
They had been trading as high as $0.71 on January 27 and had been at an all-time high of $19.9 on November 18, 2021.
In November 2021 Wejo, which is backed by US giant General Motors, floated on the Nasdaq after completing a reverse merger.
The deal with Virtuoso Acquisition Corp was first announced at the start of June 2021 and valued the business at $800m. As a result of the move, Wejo received about $225.7m.
Wejo was founded in 2014 and at the time employed more than 250 people.
Its largest shareholder is General Motors Ventures while founder and chief executive Richard Barlow also holds a significant stake.
Other shareholders include Sompo Holdings, chairman Tim Lee and Apollo Capital Management.
In July 2022, BusinessLive reported the group had secured a boost worth almost $16m. It was backed by Sompo International Holdings, one of its major commercial partners, as well as current investors and certain members of Wejo’s board.
At the time it also revealed that its cost reduction efforts included implementing a hiring freeze, eliminating non-revenue projects and prioritising workflows on revenue generation.
For 2022, its full-year revenue increased from $2.5m to $8.3m while its pre-tax losses went from $217.7m to $159.2m.
In a statement published in April this year alongside the full-year accounts, chief financial officer John Maxwell said: "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.
"We reduced our monthly cash burn by 40% from the start to the end of 2022, and we are targeting another 50% reduction in our cash burn to get to under $3m by the end of 2023.
"Our focus on reduced cash burn, the deployment of our long-term capital strategy and continued strong revenue performance are key steps to fully funding Wejo to cash flow breakeven in mid-2024."
At the time, Wejo said it expected its revenue to be between $20m and £30m for 2023 and make an adjusted EBITDA loss of between $45m and $55m.
The group said its losses were as a result of expansion into new markets, product development and higher public company costs, which were partially offset by increased revenues.
Also speaking in April, founder and chief executive Richard Barlow said: "Wejo delivered an outstanding year operationally, accomplishing the objectives we set out in 2022, including growth in key KPIs, expansion into new products and services and continued strong revenue growth, despite significant cost reductions.
"We expect these trends to continue into 2023 with revenue projected to grow almost 200% at the mid-point of our guidance and additional cost reductions expected to improve our adjusted EBITDA, which we believe will allow us to pull forward our cash-flow breakeven point to mid-2024."
In the three months to the end of March 31, 2023, Wejo's revenue increased to $3.8m compared to the $568,000 it reported in the same period in 2022. Its pre-tax losses were also cut from $40.3m to $30.9m.
On March 22 this year, Wejo's board approved a plan to reduce its workforce by about 40 employees, 16% of its total workforce.
The group said the decision was based on "cost reduction initiatives intended to reduce operating expenses, focus on revenue growth opportunities, and target cash flow positive operations prior to the end of the first half of 2024".
In its first quarter results, Wejo said: "We have incurred significant operating losses since our formation, and consequently, we will need significant additional capital to fund our operations for the next 12 months, which we may obtain through the sale of equity, debt financings, or other capital sources."
It added: "We have spent significant effort in 2022 and the first quarter of 2023 identifying and optimising alternative capital pathways to fund operations for the long-term, culminating with the raising over $38m of bridge capital over that period."
As of March 31, 2023, Wejo had cash of $800,000 and said it did not "have the capital we need to fully fund our operations in the short-term and need to raise capital in the next few days to avoid a default on our loan facilities".
It added: "Nevertheless, revenue is continuing to grow, and we have taken measurable actions to significantly reduce expenses against the 2023 operating plan, prioritizing growth in the traffic, insurance and audience measurement marketplaces, and delivering SaaS solutions for the automotive industry because of their near-term revenue opportunity.
"We are continuing to look at further measures to reduce cash burn from expenses, while continuing to grow revenue at rates in the range of 200% to 300% per year.
"Management believes that a combination of strong and disciplined expense management, rapid revenue growth and outside capital are necessary steps in the long-term capital strategy of Wejo."
Since January 2023, Wejo has been working on several deals which would see it raise in the region of $100m.
Wejo is headquartered in the ABC Building in Quay Street, Manchester.
Wejo has been contacted for comment by BusinessLive.
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