Newcastle tech firm ZeroLight saw losses widen to £7.9m, new documents reveal, amid major disruption across the automotive market.
The Quayside based company allows people to customise cars through its cloud-based, 3D interactive technology, and the first year of lockdown saw it accelerate deals with a number of car manufacturers, keen to keep launches on track despite the pandemic. However, accounts for the firm - which works with the likes of MW, Audi, Lamborghini, Porsche, Volkswagen, Skoda and Nissan - show its revenue fell for the first time since its launched in 2014, dropping from £8.3m to £6.7m.
The firm, which was born out racing game developer Eutechnyx, said the sudden drop in activity by some brands had been offset by its work with emerging electric vehicle companies such as Lucid Motors which rely heavily on digital marketing. While operating losses in the year to the end of March 2022, grew from £4.5m to £7.9m, ZeroLight continued to invest in research and development activity - recording £5.2m spend during the period.
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The firm took on 20 new staff during the year, in a move that followed recruitment the year before, and took office numbers to 129.
Writing in the accounts document, ZeroLight founder and director Darren Jobling said the firm's future remained "highly positive". Following publication of the accounts, Mr Jobling told BusinessLive said: "ZeroLight continues to lead the world, from our base in the North East, defining the future of the car buying journey as we move from traditional retail to a direct to consumer online purchasing model.
"However, new car sales have been severely impacted by the Covid pandemic, chip shortages, and supply chain issues caused by the war in Ukraine. In the UK alone, SMMT figures show that new car production was down -29.3% in 2020, and 28.7% in 2021, compared to 2019.
"We’ve continued to work with our global customer base during this challenging period, but this has had an obvious knock-on effect on our own results, as ZeroLight’s performance is intrinsically linked to expenditure to support new car sales. The good news is that the deals we were forecasting to arrive in FY22 have only been delayed, and as production has started to recover these deals are arriving, leading to ZeroLight currently having five car manufacturers on global rollout.
"We are particularly active in the world of new electric vehicles, where the ZeroLight platform offers a ready-made go to market solution for these new electric vehicle players, allowing them to leapfrog the traditional manufacturers by offering consumers new innovative car buying experiences out of the box.
"With all the above in mind and seeing an obvious global recession in 2023 and beyond, we successfully raised an additional investment round in July 2022. This will help fuel our 3-year strategy, shared with all employees, where we will be transitioning away from the Services side of our business and concentrating on SaaS revenues generated from scaling adoption of the ZeroLight platform.
"Having run a business through two previous recessions, I would advise other CEOs, especially young entrepreneurs who have never experienced a financial downturn, to look critically now at their own cost base and areas of operation. As Rishi Sunak stated, we are all “facing a profound economic crisis” and personally I am not forecasting any signs of recovery until 2024 at the earliest.
"Having said that, crisis also brings with it massive opportunity, with some of the world’s biggest tech companies emerging through a period of financial chaos to help shape a new world. This is exactly what ZeroLight will be doing – giving consumers the revolutionary car buying experience they deserve.”
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