Otonomo in talks to merge with UK auto-tech rival Wejo

Exclusive: Two auto-tech companies, which began publicly trading after SPAC mergers last year, and have since lost most of their value, could be set for a merger. Israeli auto-tech company Otonomo Technologies (Nasdaq: OTOM) is in talks with its UK rival Wejo Group (Nasdaq: Wejo) about a possible merger, according to market sources.

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No comment on the matter has been received from Otonomo.

If such a merger were to be completed, Otonomo would be valued at $150 million, significantly higher than its current market cap of just $52 million but 96% lower than its valuation of $1.26 billion, when its SPAC merger was completed in the summer of 2021.

Otonomo, founded by CEO Ben Volkow, has developed a platform and commercial arena for data collected from connected cars. Wejo is engaged in the same field and completed its SPAC merger at a company valuation of $800 million and currently has a market cap of $92.5 million. General Motors invested in Wejo before it went public and the company also collaborates with other companies including Microsoft, Palantir and Renault.

Operating in a market worth $61 billion

Market sources believe that a merger between Otonomo and Wejo would create a company with a stronger balance sheet and more extensive market and together they would address a market that is expected to be worth $61 billion in 2030. Both companies have complementary customer bases, and the merger would help reduce costs.

Both companies are still only setting out in their operations. Wejo has postponed publication of its third quarter results and Otonomo this week reported revenue of $2 million in the third quarter, compared with $161,000 in the corresponding quarter of 2021. Since the start of 2022, Otonomo’s revenue has totaled $4.9 million compared with $657,000 in the corresponding period of 2021.

But while Otonomo’s revenue has risen, its loss has widened to $37 million in the third quarter of 2022 and $116 million in the first nine months of the year. On a non-GAAP basis, the company’s operation loss was $13.4 million in the third quarter of 2022 and $41.6 million in the first nine months of the year – both bigger losses than in 2021.

Wejo reported revenue of $2.1 million in the first half of 2022 and a loss of $95.7 million.

Published by Globes, Israel business news – en.globes.co.il – on November 16, 2022.

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