The ongoing drama at Manchester traffic data specialist Wejo is about to enter its fourth week, since the company filed notice of intent to enter administration at the end of May.
Wejo last week entered a second notice of intent to enter administration at Manchester Courts, an act which many have theorised could suggest the company is buying time for a potential rescue deal.
Earlier this month, Prolific North revealed how the company’s drive to enter the autonomous vehicle market was a white elephant that may have hastened the company’s collapse.
Now new information has come to light which suggests all may not have been well on the data side of the business, either.
Wejo’s most valuable asset was perhaps its partnership with US auto giant GM, or specifically the access to data from millions of connected GM vehicles that came as part of the partnership after GM took a 35 per cent stake in Wejo in February 2019.
Over the last few days, more former Wejo staff have approached Prolific North, again speaking on condition of anonymity, and revealed that Wejo routinely sold this data at a loss.
“Before that breakthrough with GM, Wejo simply didn’t have a business model at all. The only thing we actually had with any usefulness was GM data,” one former Wejo employee told us. “We sold it at a loss.”
They added that the data model was even changed so that the company could at least cover costs: “They continued discounting to lose money on every deal,” we were told.
Prolific North was offered a very specific example of this discounting at work: “They tried to sell a year’s worth of US data to a company that had cancelled their real-time contract, so that company’s cancelled their contract, and 12 months later they’re trying to buy it cheaper,” our sources told us.
“They were trying to do a deal for a quarter of a million dollars – $240,000 I think it was – for data that would cost us $200,000 just to ship to them. So we’re basically selling a year’s worth of US data for $40,000 revenue. That’s revenue, not margin. $40,000 revenue we would have made out of that, net. That’s not including the operating costs. It was absolutely mental.”
Our sources pinpoint May 2022 as the point at which GM may have lost faith in Wejo. It was during this month that the automaker signed a direct partnership to develop data-led safety solutions with INRIX.
INRIX was a US-based mobility data and software provider to whom Wejo previously acted as a data supplier, although this was also a far from profitable arrangement according to our sources: “INRIX was the company we were selling US data to: Fully bespoke, three separate data streams, for $600K a year,” they explained. “That was costing us $400K a year to deliver, and we were sharing about 60 per cent of that revenue with GM. We were literally paying GM and AWS for INRIX to take the data.”
They added: “I can’t imagine how many companies thought we were doing some kind of magic to deliver that much data for that price, but no. We were just running at a loss. As a market-growth strategy, you can actually understand why they thought it would work, but it needed $10bn of investment, not $1bn.”
One former Wejo staffer offers a helpful layman’s version of the data business model for the less technically minded: “I can tell you the weather in real time for $5,000. Or I can send you all the data for the weather in real time so you can calculate it yourself for $50,000. Or I can save the weather data, and feed you all the historical data for $150,000. But since you don’t have the budget for any of that, how about I just sell you the historical data for $5,000 instead?”
In better news for Wejo’s former workforce, we have heard over the weekend that at least some staff have now received their May salaries, which were controversially recalled from several bank accounts following the administration notice last month, or in some cases didn’t arrive at all.
The payments do not, as far as we can ascertain at this stage, include unpaid employer pension contributions, which some former Wejo employees on social media reported have been unpaid since the beginning of 2023.
Wejo had been due to complete a second SPAC merger with TKB Business Combination by June 29, prior to its administration notice, although it admitted in its most recent SEC filing that “The company cannot predict whether and when [merger] conditions will be satisfied.”
Prolific North further understands from sources close to Wejo that at least one deal, worth in the region of $10-12m, could still remain on the table if Wejo can continue operating.
Prolific North has attempted to contact Wejo for comment.
