Otonomo, mobility data business valued at $1.4 billion in SPAC’s 2021 IPO, acquired by Urgent.ly as market cap drops to $70 million • TechCrunch
Otonomo, a connected car company that has seen its stock price plummet since its IPO in 2021, has announced that it is joining forces with Urgent.ly, a provider of roadside assistance technology, in a merger reversed. The two combine in an all-stock deal that will see Urgently shareholders take 67% of the company and Otonomo shareholders take 33%. The stock, which had traded under OTMO on the Nasdaq, will now trade under the symbol ULY.
Otonomo went public in 2021 on Nasdaq in a SPAC deal that valued the company at $1.4 billion in its early days. But the writing for it (and indeed SPACs) may have been on the wall, however: by the end of the first day of trading, its market capitalization had fallen to $1.1 billion, and that’s not certainly wasn’t the bottom: currently the enterprise market cap is just over $70 million.
The deal is expected to close in the third quarter of 2023, the companies said.
It’s been a bumpy road for smart mobility technology – with macro-economic pressures, the slower development and deployment of next-generation technologies like autonomous systems, and the market for investment in cooling technology making it more difficult for young companies to maintain and develop their activities. Otonomo may be the latest victim of this pile-up, but it may not be the last.
We’re asking how many people from Otonomo are joining the deal and will update this story with that detail when and if we get it. The companies note that the acquisition will result in “significant” “cost savings”, so there will be cuts to the process regardless.
The companies plan to merge their technologies and work on what they call “cross-selling”. Urgent.ly investors include BMW, Jaguar Land Rover and Porsche, and Otonomo investors in the past have included Avis, Alliance Holdings. SK Holdings and Bessemer. Otonomo today provides services such as fleet management, data that feeds diagnostics, mapping, traffic and safety management services, etc. The hardware vendor does not create the data, but provides a platform that can leverage and organize the data produced by the vehicles. As we wrote earlier, once the data is securely collected, the platform modifies it so companies can use it to develop apps and services for fleets, smart cities, and individual customers. The platform also enables solutions to be implemented that comply with GDPR, CCPA and other privacy regulations using both personal and aggregated data.
Urgently, meanwhile, has a narrower but more focused reach: it provides technology to help car owners connect to roadside assistance services.
One of these companies is currently much larger than the other. Urgent estimate that 2022 revenue was over $185 million, up 25% from 2021. Otonomo is expected to report fourth-quarter and full-year results on Feb. 15, but last quarter the company recorded just $2 million in revenue and noted that the ARR for that quarter was $6.7 million. This speaks to the struggles it has had in the market to fulfill the potential it promised to provide.
The company, when merged, will have operations in 26 countries and will have around 100 partnership agreements with the OEM, transportation and mapping, insurance, fleet and rental industries, a- he declared. In total, this will cover 70 million vehicles and over 80,000 estimated connected assistance service professionals. It will also have 36 patents filed and pending.
But notwithstanding the fact that this coverage does not translate directly into monetizable services, it is also quite small. The companies say the total addressable market today for connected vehicle technology is 1.7 billion connected vehicles over the next decade, a $100 billion market.
The idea is that the joining of forces creates a more attractive and broader offer in the market and more avenues to attract business within it.
“This transaction enables us to transform the current responsive road experience and deliver on the promise of connected mobility,” Urgently CEO Matt Booth said in a statement. “The addition of Otonomo’s mobility data uniquely positions Urgently to capitalize on the connections between vehicle data and the fleet, insurance and roadside assistance industries to deliver real-world services that improve customer experience and security.”
“The merger of Otonomo and Urgently is an exciting step for Otonomo that advances our vision to empower the future of mobility and connected services,” added Ben Volkow, CEO and Co-Founder of Otonomo. “Mobility Assistance is a real-world application for connected vehicle data, and by combining technologies from both companies, we will deliver new solutions to improve customer safety, security and accessibility.”
Post-deal, Matt Booth will continue as CEO and Tim Huffmyer will serve as CFO of the combined company. Ben Volkow will join the board and serve as an advisor.
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