european insurtech startup wefox grabs $650 million at $3 billion valuation
Wefox Secures $650 Million in Series C Funding
The German insurtech company, Wefox, has successfully completed a $650 million Series C funding round, spearheaded by Target Global. This investment has propelled the company’s post-money valuation to $3 billion.
Focus on Personal Insurance
Wefox operates as a digital insurer, concentrating on a range of personal insurance solutions. These include coverage for homes, vehicles, and personal liability.
Rapid Funding and Investor Demand
According to co-founder and CEO Julian Teicke, the funding process was remarkably swift. “The round was significantly oversubscribed, by approximately a factor of four,” he stated.
Valuation Growth and Industry Significance
The company previously reported a valuation of $1.65 billion in December 2019. Wefox asserts that this latest funding represents one of the largest Series C rounds recorded, and potentially the most substantial for an insurtech firm.
Broad Investor Participation
A significant number of existing investors participated in this funding round. These include OMERS Ventures, G Squared, Mountain Partners, Merian, Horizons Ventures, Eurazeo, Mubadala Capital, Salesforce Ventures, Speedinvest, CE Innovation Capital, GR Capital and Seedcamp.
New Investors Join the Round
Alongside returning investors, Wefox welcomed new participants such as FinTLV, Ace & Co, LGT and Lightrock, Partners Group, EDBI, Jupiter and Decisive Capital Management SA.
Speed of Commitment
Co-founder and CFO Fabian Wesemann highlighted the efficiency of the process. “Securing all commitments took just four weeks,” he explained.
Scaling for Revenue Generation
Wefox intends to leverage the capital to accelerate growth and increase revenue. The company aims to disrupt the $5.2 trillion insurance industry, which it believes remains largely unchanged by the internet.
A Different Approach to Insurance
Wefox distinguishes itself from traditional insurers by not focusing solely on direct-to-consumer sales. The company recognizes the continued importance of insurance agents.
Leveraging Agent Networks
Wefox currently works with 700 agents who exclusively sell its products. Additionally, it collaborates with approximately 5,000 associate brokers who distribute Wefox offerings.
The Value of Human Agents
“We believe human agents are becoming increasingly vital, contrary to industry trends suggesting their decline,” Teicke commented.
Financial Performance and Profitability
In 2020, Wefox generated $140 million in revenue. Its insurance carrier, Wefox Insurance, reported a profit for the same year. The group anticipates achieving overall profitability by 2023.
European Expansion
As a fully licensed insurance company in Liechtenstein, Wefox can extend its license to other European countries. The company currently operates in five markets and is preparing to launch in Italy.
Product Diversification
Wefox plans to expand its product portfolio to include property and casualty, pet, health, and life insurance. The company is actively developing around 20 new insurance products this year.
Centralized Product Management
While distribution is handled locally through agents, product management remains centralized. Wefox prioritizes products based on their revenue potential.
Automation and Cost Reduction
Wefox is investing heavily in automation to streamline processes and reduce administrative costs. Currently, 80% of its processes are automated, with ongoing efforts to improve efficiency.
Focus on Prevention
The company is also developing preventative measures, with an AI team based in Paris working to mitigate risks before they occur. Optimizing the customer journey is a key priority.