wefox, opted for a debt financing approach in this latest deal, structured as a convertible debt agreement. This implies that the debt will convert into equity during wefox’s next fundraising round, a strategy aimed at maintaining its current valuation of $4.5 billion.
The new capital marks a significant milestone for wefox, bringing its total funding for the year to an impressive $160 million. The funds are anticipated to play a crucial role in fueling Wefox’s global expansion initiatives and intensifying its focus on mergers and acquisitions, aligning with the company’s eight-year history.
Unlike some of its insurtech counterparts such as Lemonade and Getsafe, wefox stands out by collaborating with a network of brokers—both internal and external—involved in the distribution of its insurance products. Additionally, Wefox is exploring new avenues, venturing into the “affinity” distribution model, where it provides its insurance software to other businesses for a subscription fee.
The latest round of funding comes at a pivotal time for the insurtech industry, navigating a challenging macroeconomic landscape. The investment underscores a vote of confidence in wefox’s resilience and strategic vision.
wefox’s impressive roster of backers includes renowned venture capital firms such as Salesforce Ventures, Target Global, Seedcamp, Speedinvest, and Horizon Ventures. Notably, institutional giants like UBS, Goldman Sachs, Mubadala Capital Ventures, and Jupiter Asset Management also maintain a stake in the company.
Speaking about the fund raise, wefox CEO, Julian Teicke, said: “I’m delighted to share some exciting news: Deutsche Bank and UniCredit are now part of our journey. This is a significant affirmation from the industry and a clear nod to the path we’ve chosen toward profitable growth.
“Leading our company from a period of hypergrowth to one of profitable growth in a short span is a complex challenge. It compelled us to make hard choices and to step back from several innovative projects close to my heart. Despite these tough decisions, the dedication to adapt to the realities of the market was crucial.”
He added: “I want to express my heartfelt gratitude to every team member at wefox. Your shared vision and collective pull have been instrumental in this phase of our evolution. It is your effort and commitment that allow us to now look forward to a clear path toward profitability as a milestone to achieve our vision together.”
Author: Joanna England