UK-based retail technology firm What3Words has drastically cut losses year-on-year to £17.5 million pre-tax.

What3words has divided the world into a grid of three-metre squares and given each square a unique combination of three words, with around 57 trillion squares in total.

The group also sells an API that allows partners to integrate what3words into their systems via a web-based platform.

The firm’s backers include ITV, IKEA, Mercedes-Benz and former F1 champion Nico Rosberg. Ikea poured £12 million into the firm in 2021.

The latest set of results represents a 48 per cent year-on-year fall in losses and represents a reduction of 60 per cent compared to the 2021 financial year.

Revenues at What3Words also grew from £838,000 to just above £1m

The firm, founded in 2013, has yet to turn a profit for any calendar year. However, it has signed partnerships with many of the world's largest logistics firms DHL, Yodel and DPD.

What3words attributed the improvements in its financial situation to an easing of the semiconductor shortage, where pandemic-related restrictions caused a supply change crisis in the industry.

The firm also put down the improved performance to “the reduction in consumer acquisition activities”.

The company said in a statement: “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.

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