The $4.5 billion insurtech leader, announced Wednesday that it has raised $110 million from investors. The latest round was led by JP Morgan and Barclays, who invested $55 million, which came in the form of a revolving credit facility.
According to reports, the remaining $55 million was an equity investment led by investment management firm Squarepoint Capital.
Some news outlets said the move, “marks a vote of confidence for the insurance technology space at a time when it faces tough macroeconomic headwinds.”
The funding will be used to bolster Wefox’s affinity programme and technology platform, according to company statements. Additionally, Wefox has made significant investments in artificial intelligence (AI), an emerging area in the tech industry.
Wefox garners support from the investment banking space
During an interview with CNBC, Julian Teicke, wefox’s CEO and co-founder, told them: “It’s a new type of financing for a growth company. Risk investors, equity investors, they understand, they want to take risk.”
The dynamic CEO also described wefox as “crisis-resistant”. He said that unlike many companies in the space, wefox had not experienced staff lay off pressures, but had changed its strategy by “doubling down on things that work and stopping things that don’t make sense.”
Teicke cited that in the first quarter of 2023, the insurtech saw its revenues almost double year-over-year. Teicke also anticipates wefox will reach profitability by the end of 2022.
He added: “Banks typically don’t, so for them it was really important to understand our path towards profitability and the maturity of our business.”
Wefox has experienced unprecedented success and growth
Wefox is already Europe’s largest and fastest-growing insurtech and has a somewhat hip and trendy reputation, which appeals greatly to its growing customer base of enthusiastic millennials.
The company is the insurer sponsor of choice for AC Milan FC, and when wefox raised an insurtech world record $650 million funding round in 2021, it filed its IPO and then made every employee a shareholder to the tune of $6,000 dollars per staff member.
Wefox’s market position places it alongside GetSafe and Lemonade
Launched in 2015, wefox is focused on personal insurance products, such as home insurance, motor insurance and personal liability insurance. Rather than underwriting claims itself, the company connects its users with brokers and partner insurance firms through an online platform.
Due to its robust reputation the insurtech’s $4.5 billion valuation from its previous round of funding, has been maintained. While many insurtechs and fintechs experienced massive valuation slumps in 2022, wefox is not among them.
One explanation for the company’s continued success, is its strategic approach to navigating the turbulent landscape. Wefox focuses on its successful broker partnership model and the “affinity” method of distribution. The latter involves selling its insurance software to other businesses for a subscription fee, such as integrating car insurance into online car sales.
The company also uses AI, primarily to automate policy applications and enhance customer service. With dedicated tech hubs in Paris, Barcelona, and Milan, wefox has stated that it is fully committed to harnessing the potential of AI.
