Otonomo to acquire The Floow
Otonomo, “the mobility intelligence company,” has entered into a definitive agreement to acquire UK-based The Floow in a cash and stock deal valued at approximately $69 million, including a performance based earnout of up to $37.5 million. Under the agreement, the aggregate cash and stock consideration to be paid and issued upon closing is valued at $31.5 million based on a share price of $2.75. Otonomo may issue additional cash and stock of up to $37.5 million dependent upon achievement of certain business performance objectives. The acquisition is subject to approval by U.K. regulators and is expected to close within the second quarter of 2022. The Floow’s preliminary and unaudited revenue was between $6.5 million and $7 million for 2021.
Founded in 2012, The Floow is a telematics provider and according to the company it serves clients such as Munich Re and its subsidiary ERGO, Direct Line, Plymouth Rock, and AAA. The company publicly disclosed around $16 million in funding and one investor is Direct Line Group.
The combination of the two companies is expected to integrate The Floow’s vehicle insurance tools with Otonomo’s mobility intelligence platform built on OEM vehicle data. Together, Otonomo and The Floow will offer connected insurance solutions powered by the full spectrum of data sources (OEM, mobile and aftermarket devices), generating insurance-grade scores and user analytics regardless of data origin.
Last year, Otonomo merged with special purpose acquisition company Software Acquisition Group Inc. II with a valuation of $1.4 billion. The company is now trading at $1.41 per share, down from $11.60 per share on February 19, 2021, and has a market cap of ~$188 million. In 2021, Otonomo generated $1.7 million in revenue and in Q4 it reported an operating loss of $16.2 million.
“Together, we believe Otonomo and The Floow will create the opportunity for both OEMs and insurance companies to accelerate the utilization of their data, create new products, improve customer experiences and accelerate business transformation. We are pleased to be joining forces with The Floow’s CEO Aldo Monteforte, a visionary in his field, and the entire team.” – Ben Volkow, CEO of Otonomo.
“I could not be prouder to announce we are joining the Otonomo team. This is a big, bold step that brings us closer to our vision of safer and smarter mobility for all. Our clients and partners, some of the leading insurers of the world, will have access to a significant and unique set of data products, tools and resources to help them compete and thrive in a connected new world ahead.” – The Floow’s CEO Aldo Monteforte.
“The Floow provides us with the technical underpinnings necessary to create superior, data-driven products. Otonomo adds considerable data science heft to the Floow’s robust insurtech telematics technology. Their combined offering will strengthen our position for the tidal wave of innovation coming in the auto insurance space.” – Joachim Mathe, head of global consulting at Munich Re.
Bottom Line: A futuristic company acquiring a company with a product that is challenged by new developments in the connected car space.
