Otonomo, a connected automotive company that went public in 2021 and has seen a sharp decline in the value of its stock, recently announced a reverse merger with roadside assistance tech company Urgent.ly. In an all-share merger, Urgently shareholders will receive 67% of the combined company, and Otonomo shareholders will receive 33%. The stock, which formerly traded on Nasdaq under the ticker OTMO, will now do so under the ticker ULY.
In a SPAC deal that valued Otonomo at $1.4 billion at IPO, the company went public on Nasdaq in 2021. The company’s market cap had fallen to $1.1 billion by the end of the first trading day, but that was clearly not the bottom; right now, it is just over $70 million. This may have been the beginning of the end for it (and SPACs, for that matter).
According to the companies, the deal is anticipated to close in Q3 2023.
Macroeconomic pressures, the slower development and rollout of next-generation technology like autonomous systems, and the cooling tech investing market have all made it more difficult for younger businesses to maintain and grow their businesses. It’s been a rough road for smart mobility technology. Otonomo is possibly the most recent victim of that collision, but it might not be the last.
When we learn the number of Otonomo residents who will be participating in the deal, we will update this article. Despite this, the companies note that the acquisition will lead to “meaningful” “cost savings,” so some slashing will still occur.
The businesses intend to combine their technologies and focus on “cross-selling.” BMW, Jaguar Land Rover, and Porsche are investors in Urgent.ly, and Alliance Holdings and Avis have previously invested in Otonomo. Bessemer and SK Holdings. Today, Otonomo offers a variety of services, including fleet management, data for diagnostics, mapping, traffic and safety management, and more. The hardware supplier only provides a platform that can collect and organize the data generated by vehicles; it does not actually create the data. As previously mentioned, the platform modifies the data after it has been safely collected so that businesses can use it to create apps and services for fleets, smart cities, and individual customers. Using both individual and aggregate data, the platform also enables GDPR, CCPA, and other privacy regulation-compliant solutions.
Meanwhile, Urgently has a more constrained but focused area of operation: it offers technology to connect car owners with roadside assistance services.
Currently, one of these companies is significantly larger than the other. estimates that revenue in 2022 exceeded $185 million, an increase of 25% from 2021. On February 15, Otonomo is expected to release its Q4 and full-year financial results. However, during the previous quarter, the company only reported $2 million in revenue and $6.7 million in ARR. That illustrates the difficulties it has faced in the market in delivering the potential it has promised.
According to the company, after the merger, it will operate in 26 countries and have about 100 partnerships with OEMs, the fleet and rental industries, insurance, transportation and mapping, and other businesses. A total of 70 million vehicles will be covered, along with an estimated 80,000 roadside assistance workers. 36 registered and pending patents will also be included.
Nevertheless, this coverage is quite small despite the fact that it does not directly translate to monetizable services. According to the companies, there will be 1.7 billion connected vehicles worldwide within the next ten years, representing a $100 billion market for connected vehicle technology.
Combining efforts is supposed to result in a more attractive, substantial offering to the market and more opportunities to win business there.
According to Matt Booth, CEO of Urgently, “This transaction enables us to transform the current reactive roadside experience and deliver on the promise of connected mobility.” The inclusion of Otonomo’s mobility data places Urgently in a special position to take advantage of the connections between vehicle data and the fleet, insurance, and roadside assistance sectors to offer practical services that will enhance customer experiences and safety.
Ben Volkow, CEO and co-founder of Otonomo, continued, “Merging Otonomo and Urgently is an exciting step for Otonomo that advances our vision of empowering the future of mobility and connected services.” Mobility assistance is a practical use for connected vehicle data, and by combining the technologies of the two companies, we will offer fresh answers for enhancing customer safety, security, and accessibility.
Following the transaction, Matt Booth will remain the combined company’s CEO, and Tim Huffmyer will serve as CFO. Ben Volkow will serve as a member and advisor of the board.