What3words, a tech company backed by ITV, Mercedes-Benz and former F1 champion Nico Rosberg, has slashed its loss almost in half thanks to a slowdown in acquisitions among its customers.
The company, which divides the world into three-by-three metre squares and assigns a unique three-word labels to each, made a pre-tax loss of £17.5m in 2023 – an improvement of 44 per cent on its loss of £31.5m in the year before.
What3words said this improved performance was “driven primarily by the reduction in consumer acquisition activities”.
The company’s turnover increased to just over £1m during the year, up slightly from its 2022 turnover of £838,000, with bosses blaming stagnant production levels within the automotive sector – one of its key client bases – for the slow growth.
In a statement filed to Companies House, What3words said: “As is the case for many businesses, the cost of living crisis and ongoing slow global growth represents a degree of revenue risk to the group.
“A reduction to production volumes in the automotive sector, resulting from decreased consumer demand in a challenging economy, coupled with generally lower investment levels across all sectors in the current economic environment, may reduce opportunities for the group in the short-medium term.
“During the year, What3words continued to recognise revenue from the sale of its core product, an enterprise storage system for the bi-directional conversion of GPS co-ordinates to three-word addresses.
“The group also continued to target specific local markets around the world to drive consumer awareness and usage of the product on a free-to-use basis principally through its app and webmap site, as well as working with businesses across a range of industries to generate commercial returns.
“The group also has an API, enabling partners to integrate what3words into their own systems via a self-service web-based platform.
“The shortage of semiconductors which impacted production volumes across a range of manufacturing industries, including automotive, over recent year continued to ease during 2023.
“As a result, and in conjunction with the continued growth in volume of customers, revenue increased 28 per cent compared to the prior year.
“The group remained focused on deploying resources in key market where ongoing consumer testing demonstrated high returns.”